Paramus, NJ—As demand increased for its watch brands, Movado Group Inc. swung to a bigger-than-expected second quarter profit.
For the quarter ended July 31, Movado reported Thursday a profit of $4.41 million, or 18 cents a share, compared with a loss of $20.9 million, or 84 cents, a year earlier. Last year’s loss from continuing operations was 13 cents a share.
Pursuing ‘Global Recognition’
Sales jumped 33% to $113.2 million in the second quarter from $85.4 million a year ago. Gross margin rose to 53.8% from 52%.
The results far out performed analysts’ average estimate that expected only earnings of 6 cents on revenue of $97 million.
“Our strategic initiatives coupled with solid execution have continued to benefit our results as we recorded another period of double-digit sales growth while also increasing our profitability,” said Efraim Grinberg, chairman/ceo. “While we experienced broad-based sales growth across all of our brand categories, our results continue to be driven by particularly strong performances in Movado and licensed brands both domestically and internationally. We believe that the global recognition and acceptance of our brands further validates that we have the right strategy, products and team in place.”
Movado, whose watch brands include Movado, Concord, Tommy Hilfiger, Juicy Couture and Coach, is amid a multiyear plan to improve profitability by growing its Movado and licensed brands, expanding product lines and expanding in to China. As part of that plan, the company closed its Movado boutiques last year expect for one located in Rockefeller Center.
Similarly to last week’s positive report from Tiffany & Co., Movado’s sales have increased from a rebound in discretionary spending by more affluent consumers.