Watchmaker Movado Group Inc. posted a 21 percent jump in third-quarter earnings, aided by growth in its international business and strength in gross margins.
And despite a cloudy economic outlook, the company raised its earnings guidance.
For the three months ended Oct. 31, net income rose to $26.5 million, or 97 cents a diluted share, from $21.9 million, or 82 cents, in the year-ago period as sales grew 8.3 percent to $180.2 million from $166.3 million. Total same-store sales at Movado boutiques gained 8.8 percent.
For the nine-month period, earnings increased 14 percent to $41.2 million, or $1.51 a diluted share, from $36.1 million, or $1.36, in last year's period on sales that grew 7.5 percent to $421 million from $390.6 million.
Movado's international business increased 33 percent from last year and represented more than 40 percent of wholesale revenue in the third quarter. These results reflect the growing prominence of Ebel and the global expansion of licensed brand business.
"While China is still a small market for Movado, we continue to make progress as sell-through grows and we look forward to introducing new products specifically tailored to the Chinese consumer beginning next year," said Efraim Grinberg, president and chief executive officer, on a conference call with analysts.
"Third-quarter results were strong as we positioned each of our brands in the marketplace with bold new products, aspirational advertising campaigns, including Movado's milestone celebration of 60 years of modern design, and fully integrated marketing programs," Grinberg said in a statement.
The primary driver of top-line growth this year will come from new brands Hugo Boss, Juicy Couture and Lacoste, which are still in their infancy, said Richard J. Cote, executive vice president and chief operating officer, on the conference call.
The company said there's a growing sense of uncertainty surrounding the outlook of the economy and full-year results will depend on the strength of the holiday season and retailer replenishment in January.
Movado raised full-year guidance to the range of $1.74 to $1.78 a diluted share, from a previous outlook of $1.72 a share.
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