MOVADO NET SURGES 39.9% IN 2ND QUARTER
Byline: Catherine Curan
LYNDHURST, N.J. — Driven by increased domestic sales of its Movado and Concord brands, second-quarter profits of high-end watch maker Movado Group Inc. jumped 39.9 percent.
In the quarter ended July 31, Movado earned $2.4 million, or 30 cents a share, against $1.7 million, or 22 cents, a year ago. Per share amounts reflect a five-for-four stock split effective April 21.
Sales gained 12.3 percent to $57 million from $50.8 million.
Efraim Grinberg, president of Movado Group, said brisk international sales, including those in the Far East and Caribbean, also contributed to the strong second-quarter results. He added that continued positive performance by the company’s manufactured brands allowed for gross margin improvements.
In the quarter gross margin improved to 56.5 percent of sales from 54.4 percent. In a telephone interview, Michael Bush, chief operating officer, said sales were strong across Movado and Concord product lines, noting that core products sold well. More established styles such as the Museum watch as well as newer styles were hot. In addition, the Vizio watch collection launched in April 1996 was a solid performer through the first half and continues to gain recognition among consumers.
Looking ahead, Bush said Coach watches are on track to be in stores by April or May 1998. They will retail between $200 and $600. Distribution will include Coach stores and department stores that feature Coach products. International distribution will focus mainly on Japan.
Bush said the Movado store concept is also on track and will probably be launched around the same time as the Coach watches.
In the half, Movado’s earnings climbed 73.1 percent to $2.1 million, or 27 cents a share, from $1.2 million, or 16 cents, a year earlier. Sales rose 12.4 percent to $91.9 million from $81.8 million. Gross margin improved to 56.7 percent of sales from 55 percent.