UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported)       June 9, 2009

 

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 

(17 CFR 240.14d-2(b))

 

(17 CFR 240.13e-4(c))

 

 

 

On June 9, 2009, Movado Group, Inc. issued a press release announcing its results for the first quarter ended April 30, 2009.  The press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this item.

 

 

 

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized.

Dated: June 9, 2009

 

 

 

EXHIBIT 99.1

 

 

 

201-267-8000

 

Leigh Parrish/Stephanie Rich

212-850-5600

 

FOR IMMEDIATE RELEASE

 

MOVADO GROUP, INC. ANNOUNCES FIRST QUARTER RESULTS

 

Paramus, NJ – June 9, 2009 – Movado Group, Inc. (NYSE: MOV), today announced first quarter results for the period ended April 30, 2009.

First Quarter Fiscal 2010

 

Efraim Grinberg, President and Chief Executive Officer, stated, “Considering the ongoing difficult economic environment, we are pleased with our first quarter performance. In our seasonally smallest quarter, we experienced a sales decline but maintained a solid gross margin. We also took advantage of opportunities to convert excess discontinued product into cash. This coupled with cost reduction initiatives and stringent expense management led to better than expected results for the quarter. While we continue to be challenged by our retail customers’ relentless focus on lowering their inventory, we expect to see an improvement in these trends beginning in the second half of this year as our customers start to replenish inventory ahead of the holiday season. We remain confident that our strong portfolio of brands provides a compelling value proposition to our consumer base at all levels, from the high end of the luxury watch market to the more affordable fashion watch category. The strength of our brands, along with a well-diversified global business, strongly positions Movado Group to gain market share and to benefit from improvements in the marketplace.”

 

 

Rick Coté, Executive Vice President and Chief Operating Officer, stated, “The decisive cost savings initiatives we embarked upon last year are clearly materializing in our results, as first quarter operating expenses declined 24% from the year-ago period. We continue to execute these programs, which are expected to generate annualized cost savings of between $50 million and $60 million, most of which we expect to realize this year. Additionally, as expected, we have secured a new $50 million asset-based loan agreement with Bank of America. This three year facility replaces our current domestic debt outstanding and we expect that, together with cash from operations, it will be sufficient to finance our business on an ongoing basis. At the same time, we remain focused on cash flow management and are taking significant actions to lower our inventory, the benefits of which we believe we will begin to see during the second half of the year. Importantly, we expect to return to being free cash flow positive this year. ”

 

Fiscal 2010 Guidance

While the economic environment remains uncertain, Movado Group now estimates fiscal 2010 fully diluted earnings per share to be approximately $0.50 compared to fully diluted earnings per share of $0.09 recorded in fiscal 2009. This guidance is predicated on an improvement in sales trends during the second half of fiscal 2010, as retailers purchase inventory in preparation for the holiday season, resulting in an expected high single-digit sales decline for the full year.

 

The Company’s management will host a conference call today, June 9^th at 10:00 a.m. Eastern Time. A live broadcast of the call will be available on the Company’s website: www.movadogroup.com. This call will be archived online within one hour of the completion of the conference call.

 

Movado Group, Inc. designs, sources, and distributes Movado, Ebel, Concord, ESQ, Coach, Tommy Hilfiger, HUGO BOSS, Juicy Couture and Lacoste watches worldwide, and operates Movado boutiques and company stores in the United States.

 

In this release, the Company presents certain adjusted financial measures that are not calculated according to generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures are designed to complement the GAAP financial information presented in this release and management believes they present information regarding the Company that is useful to investors. The non-GAAP financial measures presented should not be considered in isolation from or as a substitute for the comparable GAAP financial measure.

 

The Company is presenting net sales and gross margin excluding sales of excess discontinued product because the Company believes that it is useful to investors to eliminate the effect of these unusual items in order to improve the comparability of the Company’s results for the periods presented.

 

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, whenever possible, to identify these forward-looking statements using words such as “expects,” “anticipates,” “believes,” “targets,” “goals,” “projects,” “intends,” “plans,” “seeks,” “estimates,” “may,” “will,” “should” and similar expressions. Similarly, statements in this press release that describe the Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual results, performance or achievements and levels of future dividends to differ materially from those expressed in, or implied by, these statements. These risks and uncertainties may include, but are not limited to: actual or perceived weakness in the U.S. and global economy and fluctuations in consumer spending and disposable income, the Company’s ability to successfully implement the new Movado brand strategy, the ability of the new Movado brand strategy to improve the Company’s net sales, profitability and other results of operations, the Company’s ability to successfully introduce and sell new products, the Company's ability to successfully integrate the operations of newly acquired

 

and/or licensed brands without disruption to its other business activities, changes in consumer demand for the Company’s products, risks relating to the fashion and retail industry, import restrictions, competition, seasonality, commodity price and exchange rate fluctuations, changes in local or global economic conditions, and the other factors discussed in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time.

 

(Tables to follow)

 

 

MOVADO GROUP, INC.

Consolidated Statements of Income

(in thousands, except per share data)

(Unaudited)

 

 

 

 

MOVADO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

(Unaudited)