NEW YORK — Cost cuts allowed Movado Group Inc. to post gains in second-quarter profits despite an appreciable sales decline.
For the three months ended July 31, the Paramus, N.J.-based watchmaker reported net income grew 4.8 percent to $5.4 million, or 44 cents a diluted share. That compares with net income of $5.1 million, or 42 cents, in the prior-year quarter. Earnings per share beat the Wall Street consensus estimate by a penny.
Net sales for the period fell 7.8 percent to $72.2 million from $78.4 percent last year, while same-store sales rose 1.5 percent at Movado’s retail boutiques.
"Our successful cost-savings initiatives and productivity improvements continue to drive strong results as we improved our operating profit margin and grew the bottom line during the quarter," said chief executive officer Efraim Grinberg in a statement. "The single-digit net sales decline compares to a record sales performance in the year-ago period and is primarily attributable to economic weakness overseas combined with U.S. retailers’ continued focus on inventory management."
Cost cuts accruing to the bottom line included an 8.2 percent decline in cost of sales to $27.9 million from $30.4 million last year, as well as an 8.6 percent drop in selling, general and administrative expenses to $35.8 million from $39.2 million a year ago. Those cuts helped gross margin remain at 61.4 percent.
Overall, for the first half of the fiscal year, Movado reported net earnings increased 14.1 percent to $5.7 million, or 47 cents a diluted share. That compares with last year’s profits of $5 million, or 41 cents. Movado said last year’s earnings have been adjusted downward $109,000, or 1 cent, to reflect the adoption of a new accounting standard regarding derivative instruments and hedging activities.
Sales for the first six months slipped 4 percent to $129.5 million from $134.9 million a year ago, while same-store sales in the company’s boutiques gained 4.8 percent.
In a separate development, the firm reported Wednesday it has signed two lease agreements for Movado boutiques to be located in the Dadeland Mall and the Aventura Mall, both located in Miami. The boutiques are expected to open in late 2002.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews