Movado Group Inc. late Monday said weak sales and a series of special charges would push its fourth-quarter loss to between $23.6 million and $24.6 million.
Excluding one-time items, the Paramus, N.J.-based watch firm expects its adjusted loss to land between 28 cents and 32 cents a share, greater than the 25 cents expected by analysts polled by Yahoo Finance. It expects to release audited fourth-quarter results on April 1.
The company also promoted Rick Cote, chief operating officer, to the post of company president, a position that has been held by Efraim Grinberg, who continues as chairman and chief executive officer. Cote will assume day-to-day responsibility for Movado’s brands, including Ebel and ESQ by Movado, and other businesses.
Movado said it expects a GAAP loss of between 96 cents and $1 a diluted share, versus a net loss of $22.8 million, or 93 cents, in the year-ago quarter. Without one-time items, the loss in last year’s quarter was 57 cents a diluted share.
Items included in the most recent period include 28 cents for excess noncore component inventory and 29 cents to write down assets of its Movado boutique and trade show booths for the Baselworld fair. Another 13 cents is attributable to a 45 cent valuation allowance on deferred assets, offset by a 32 cent benefit from changes in the U.S. tax law that increase the net loss carryback period to five years.
Sales for the quarter ended Jan. 31 are expected to come in at about $92 million versus $94 million in the final quarter of 2009.
Grinberg noted the company had finished the fiscal year with $60 million in net cash, versus $22 million a year ago, and about $30 million in cash flow from operations.
“We anticipate the upcoming year will be one of increasing investment in our brands and we have renewed our focus on growth moving forward,” he said.
In preliminary guidance for the new year, Movado said the requirement that it record a tax valuation allowance will likely lead to a loss in the range of $5 million to $10 million, or 20 cents to 40 cents a share. Sales from ongoing operations, however, are expected to increase 10 to 15 percent.
Cote joined Movado in 2000 and became executive vice president and chief operating officer the following year.
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