MOVADO LOSES $8.8M IN QUARTER
NEW YORK — Movado Group Inc. lost $8.8 million in the fourth quarter ended Jan. 31 after pretax charges of $8.3 million, primarily to write down inventory and higher closeout sales and operating expenses.
The losses were in the lower range of company forecasts. The watchmaker, based in Woodcliff Lake, N.J., had predicted on March 21 that it would lose between $8.7 million and $9.1 million, primarily due to write-downs to cover noncore component inventory, negative adjustments to the yearend inventory count and the relocation of its distribution center.
Excluding the charge, Movado lost $2.9 million against earnings of $5.4 million, or 41 cents a share, in the prior-year quarter. Sales increased 23.3 percent to $79.5 million.
“Each of our brands performed well during the year, particularly during the holiday season, and our brands are as strong as ever,” said Efraim Grinberg, president, in a statement. Brands include Movado, Concord, ESQ, and Coach. A Tommy Hilfiger watch collection will bow for spring 2001.
Grinberg said the firm was hurt by higher closeout sales, expenses and infrastructure investments. The company will concentrate this year on reducing its expense structure while supporting growth initiatives, including a rollout of retail boutiques. The firm operates five boutiques and 24 outlet stores. In the fourth quarter, same-store sales jumped 24 percent at the boutiques and 16.8 percent at the outlets.
In the year, profits slid 34.6 percent to $13.7 million, or $1.06 a share, from $21 million, or $1.58. Excluding the fourth-quarter charge and a net $3.7 million gain from the sale of the Piaget distribution business, earnings in the latest period were $15.9 million, or $1.24 a share. Sales gained 6.2 percent to $295.1 million. Excluding Piaget results, sales rose 13.4 percent to $295.8 million.