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.
This story first appeared in the December 9, 2002 issue of WWD. Subscribe Today.
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.