Movado Group Inc. reported third-quarter results that matched greatly muted expectations and saw its shares gain back a fraction of what they had lost when they scaled back guidance 11 days ago.
The official results for the quarter ended Oct. 31 essentially matched the guidance provided earlier in the month. Net income dropped 3.5 percent to $22.2 million, or 87 cents a diluted share, from $23 million, or 89 cents, in the 2013 quarter. Net sales declined 0.6 percent, to $188.6 million from $189.7 million, because of “a decline in the luxury brand category and certain licensed brands.”
Gross margin receded to 53 percent of sales from 53.4 percent in the year-ago quarter, in part because of fluctuations in currency exchange rates.
“Our largest brand, Movado, continues to perform very well in the United States, and, although the brand had recent weaker-than-expected performance overseas, we believe it continues to have significant international growth opportunities in the future,” said Efraim Grinberg, chairman and chief executive officer. “On the licensed-brand front, our largest brands continue to experience growth.”
Rick Coté, vice chairman and chief operating officer, noted that Movado expects its brands “to continue to outperform the watch category at retail.”
The firm’s board approved an increase in its share buyback program to $100 million from the original $50 million. The new authorization expires on Jan. 31, 2016. Of the original $50 million, $23.6 million had been utilized as of Oct. 31.
In the nine months to date, net income fell 4.5 percent to $41.7 million, or $1.63, as revenues rose 3.4 percent to $453.1 million.