Movado Group Inc. said fourth-quarter profits fell, but saw gains in sales for the period.
For the three months ended Jan. 31, net income fell 9.2 percent to $7.2 million, or 28 cents a diluted share, from $7.9 million, or 31 cents, a year ago. On an adjusted basis, excluding certain charges in the quarter including a reallocation strategy connected with ESQ Movado, net income was $12 million, or 46 cents a diluted share, versus $10.5 million, or 41 cents, last year. Net sales rose 7 percent to $132.3 million from $123.6 million. On an adjusted basis, excluding the $7.8 million charge for anticipated sales return related to the ESQ Movado reallocation strategy, net sales were up 9 percent to $140.1 million.
Efraim Grinberg, chairman and chief executive officer, said, “We achieved our 16th consecutive quarter of solid financial performance highlighted by strong sales growth and expansion in adjusted operating margin, which fueled a 43.5 percent increase in adjusted operating income as compared to the fourth quarter of fiscal 2013.”
He also noted that the company made the “decision to reduce the presence of ESQ Movado in certain retail doors so that the case space can be reallocated to our more productive Movado collections.”
For fiscal year 2015, the company said it expects net sales to increase 10.7 percent to $640 million, and net income to rise to $63.5 million, or $2.44 a diluted share.