MOVADO NET LEAPS 14.7% IN 3RD QUARTER
NEW YORK — Reflecting strong retail sell-throughs and better gross margins, Movado Group Inc. reported third-quarter earnings jumped 14.7 percent to $13.8 million, or $1.07 a share, from $12 million, or 91 cents, in the same period last year.
Sales in the quarter ended Oct. 31 rose 1.6 percent to $99 million from $97.5 million. Sales from ongoing operations were ahead 5.7 percent, excluding $3.9 million in year-ago sales from businesses that were disposed of, primarily Piaget. The Piaget business was sold to VLG North America, a subsidiary of the Vendome Luxury Group, for about $30 million in January.
Efraim Grinberg, president, told WWD that all Movado’s brands were performing well. Movado, based in Lyndhurst, N.J., makes and distributes Movado, Concord, ESQ and Coach, and also distributes Corum watches in the U.S., Canada and the Caribbean.
“Its been a healthy nine months for the company,” said Grinberg. “Each brand continues to perform well in its segment.”
Grinberg noted that gross margins advanced in the quarter to 62 percent of sales, reflecting supply chain improvements and the disposition of the Piaget business. Last year, margins were about 59 percent of sales.
“We are delighted by the response we have seen thus far to our new advertising program,” he added. “During the period, we successfully launched our new Concord advertising campaign, which was well-received by consumers. In addition, we recently introduced our new ESQ television commercial, which we believe will result in greater consumer awareness and demand.”
The company’s retail stores are “doing very nicely,” Grinberg said. Movado operates five retail units, including a store at the Venetian Resort Hotel and Casino complex in Las Vegas. In addition to timepieces, the stores carry jewelry, home decorative objects and personal and desk items.
Movado is also developing timepieces for Tommy Hilfiger under license. They are set to bow in spring 2001.
The firm also recently signed a deal with Lantis Eyewear for Lantis to design, distribute and market Movado brand eyewear. The the first collection is planned for retail next October.
In the nine months, earnings grew 44.8 percent to $22.5 million, or $1.73, from $15.5 million, or $1.17. Results were helped by a $3.7 million after-tax gain from the sale of Piaget.
Nine-month sales gained 3.9 percent to $216.2 million from $208 million.