NEW YORK — Strong retail operations and growth from its Tommy Hilfiger license allowed Movado Group Inc. to beat Wall Street estimates in the third quarter.
For the three months ended Oct. 31, the Paramus, N.J.-based watchmaker’s reported net income rose 17.1 percent to $8.8 million, or 73 cents a diluted share. That compares with last year’s quarter when the firm registered profits of $7.5 million, or 63 cents. Earnings per share outran analysts’ forecasts by 2 cents.
Excluding a charge taken last year related to severance and early retirement costs, as well as an income tax rate adjustment, net earnings grew a more modest 11.1 percent from $7.9 million, or 66 cents.
Sales for the period ticked up 1 percent to $91 million from $90.1 million a year ago, as comparable-store sales at the company’s boutiques grew 3 percent.
"Our success in driving productivity and reducing overhead has provided us with significant bottom-line improvement," said chief executive officer Efraim Ginsberg in a statement. "As expected, we experienced strong growth this quarter from our two newest concepts, the Movado boutiques and the Tommy Hilfiger brand, while softness in several of our international markets tempered top-line growth."
Gross margins declined 70 basis points to 61.3 percent of sales from 62 percent a year ago. Excluding the previously mentioned charges, operating margin rose 102 basis points to 14.6 percent of sales. Movado said the better margins were primarily due to productivity enhancements and cost controls.
Overall, for the first nine months of the year, the firm posted a net earnings gain of 15.9 percent to $14.5 million, or $1.19 a diluted share. That compares with a net income of $12.5 million, or $1.05, a year ago.
Sales fell 2 percent to $220.5 million, as same-store sales grew 4.2 percent at the Movado boutiques.
Breaking: @cushnieetochs’ co-founders @carlycushnie and @ochsmichelle are parting ways. After a 10-year run, Ochs is leaving the brand. Get the full story on WWD.com – link in bio. #wwdnews #wwdfashion
@maybelline’s Kanako Takase had snow bunnies in mind when creating the beauty look for @philipppleininternational. Playing off of the bedazzled snowboards in the collection, Takase mixed two highlighters together for a luminous sheen. #wwdbeauty #nyfw (📷: @jilliansollazzo)
“There’s a huge gap between the old way of doing things and today. It takes the youth to help evolve that. You have to count on the kids today to help lead you into the future. A lot of these retailers are stuck in the past. Communication is the biggest thing,” said @ronniefieg of @kith on the youth’s role in retail. On Monday night, Jeff Staple moderated a keynote session with Fieg and @syresmith at Assembly - a series of workshops, talks and keynotes addressing topics or issues in the apparel industry. Head to WWD.com to read more advice from Fieg and what Smith thinks of his dad @willsmith’s Instagram account and sustainability (📷: @weston.wells)
@joansmalls closed the @michaelkors fall 2018 show in black sequined pants and a varsity T printed with 19 on the front and 81 on the back. 1981 – the year Kors went into business. #wwdfashion #nfyw (📷: @giovanni_giannoni_photo)
“You think your life is going to be a certain way, and nothing you thought would happen ends up happening. Never in my wildest dreams did I think I’d be designing clothes and working with Mickey Drexler, and building something I’m deeply proud of,” said Jenna Lyons. Nine months after leaving @jcrew, Lyons is exploring the meaning of happiness. Read the interview, where Lyons talks about reinvention and more on WWD.com – link in bio. #wwdfashion (📷: Farrell) #jennalyons #jcrew