AS NET DROPS, MOVADO CUTS
Byline: Vicki M. Young
NEW YORK — Movado Group Inc. ended its third quarter in the black, but year-over-year profits dropped by 40 percent and the company is reducing its headcount by 11 percent.
For the three months ended Oct. 31, earnings were $7.5 million, or 63 cents a share, compared with $12.6 million, or $1.07, in the year-ago quarter. Results in the quarter included a one-time pretax charge of $2.7 million in connection with severance and early retirement expenses. Sales were down 15 percent, to $90.1 million from $105.1 million, but comparable-store sales rose 6.6 percent.
The company’s one-time charge affects its nonsales staff at Movado’s U.S. corporate and operations workforce. Offsetting the charge will be a reduction in tax rate resulting from a shift in the global sales mix.
Efraim Grinberg, president and chief executive officer, said that the company’s brands, particularly Movado, continue to record strong retail sell-throughs.
The firm also said it has opened a new store in Manhattan’s SoHo district.
For the nine months, income fell 30 percent, to $12.5 million, or $1.05 a share, from $17.1 million, or $1.44, a year ago. Sales slid 4 percent, to $225 million from $234.6 million, while comps gained 7.7 percent.