NEW YORK — Movado Group Inc. said on Wednesday that second-quarter profits jumped 22.7 percent on strong top-line gains.
For the three months ended July 31, the Paramus, N.J.-based luxury accessories manufacturer reported income of $7.1 million, or 28 cents a diluted share, which eclipsed Wall Street’s estimate by 8 cents. Excluding special items accruing to $500,000, or 2 cents, income would have been $7.6 million, or 30 cents. The special items include the impact of Ebel, acquired in March, which was partly offset by a gain associated with a legal settlement with Swiss Army Brands. Last year the company had profits of $5.8 million, or 23 cents.
Sales for the period advanced 27.8 percent to $97.8 million from $76.5 million a year ago, while same-store sales rose 11.8 percent at the firm’s Movado boutiques.
“Our Movado brand recorded low single-digit percentage growth, led by increases in both our domestic and international businesses,” chief executive officer Efraim Grinberg said on a conference call.
“Our Concord brand delivered strong results, with sales showing double-digit gains. ESQ continued to build momentum in North America with a strong double-digit sales increase. Coach delivered strong double-digit sales increases in both the second quarter and the first half, and Tommy Hilfiger posted impressive double-digit increases.”
Grinberg said the integration of Ebel has progressed according to plan and the business should begin making a positive impact in the second half of the year. For the second quarter, Ebel contributed $9.4 million in revenue, but caused gross margin to fall 240 basis points to 59.3 percent of sales and reduced Movado’s operating profit by $1.7 million, the company said in a statement.
For the first six months of the fiscal year, Movado recorded an 18 percent increase in income to $7.8 million, or 31 cents a diluted share, from $6.6 million, or 27 cents, a year ago. Sales for the half grew 25.8 percent to $172 million from $136.7 million last year.
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