Movado Group Inc. on Thursday posted strong increases in fourth-quarter and year-end earnings, boosted by a one-time $15 million tax benefit.
This story first appeared in the March 28, 2008 issue of WWD. Subscribe Today.
Earnings for the three months ended Jan. 31 grew 39.6 percent to $19.6 million, or 72 cents a diluted share, from $14 million, or 52 cents, in the same year-ago quarter. Sales declined 2.6 percent to $138.6 million from $142.3 million.
For the full year, Movado said income jumped 21.3 percent to $60.8 million, or $2.23 a diluted share, on a sales gain of 5 percent to $559.6 million.
During a call on Thursday, company executives said the fourth quarter was challenging because of economic woes in the United States.
According to the company, it received $20.8 million, or 76 cents a diluted share, from the settlement of an Internal Revenue Service tax examination. That resulted in the $15 million boost to fourth-quarter results.
The company attributed its positive results to a strategically diversified business model that expanded its geographic exposure and brand diversity.
Efraim Grinberg, chairman and chief executive officer of the company, said 50 percent of the company’s wholesale revenue and 40 percent of total revenue are generated internationally.
“Our international performance exceeded our expectations and offset weakness in the U.S. In fact, total international sales in fiscal 2008 increased a strong 29 percent over last year, excluding sales of excess discontinued product,” Grinberg said during a call Thursday.
Separately, Movado named Sallie DeMarsilis as chief financial officer and principal accounting officer. She succeeds Eugene Karpovich, who remains an officer of the company and a senior member of its management team.
Previously, DeMarsilis served as senior vice president of finance at Warnaco Group Inc.