Movado Group has 'Banner Year'
By William George Shuster, Senior Editor -- JCK-Jewelers Circular Keystone, 6/1/2004
Sales for the Movado Group, the U.S. watchmaker whose brands include Movado, Concord, and newly acquired Ebel, posted record results for the fiscal year ending Jan. 31, including a second consecutive year of record cash flow.
For fiscal 2004, net sales rose 10% to $330.2 million, and net income increased 13.9% to $22.9 million, the company announced in March. Operating profit increased 9.5% to $34.8 million. Gross margin was 60.7% compared with 61.4%, primarily because of the weak U.S. dollar. For Movado boutiques, comparable store sales increased 20.1%.
In the fourth quarter, net sales were $92.7 million, a 16.6% gain. Net income grew 11.2% to $6.2 million. Operating profit rose 7.8% to $9.2 million. Comparable store sales were up 15.1%.
In addition, for the second consecutive fiscal year, the company posted a record cash flow from operations, in excess of $50 million.
Also, the company early this year completed acquisition of Swiss luxury watch brand Ebel S.A. from LVMH, the French luxury goods group, and is now restructuring Ebel's watchmaking operations at La Chaux-de-Fonds, Switzerland. (Ebel does about $62.5 million in annual business, but lost $32 million in the past three years.) The 175-person workforce this year will be reduced by 59, a 34% cut, "to create a sustainable business structure" that ensures "profitability for the future," said a company statement. The Movado Group plans to use Ebel to expand its presence in the luxury watch category and international markets.
According to president and chief executive officer Efraim Grinberg, the Movado Group enters fiscal year 2005 "well-positioned to capitalize on the positive trends we're experiencing across all our brands."
The company's board of directors also announced a 2-for-1 stock split, subject to shareholder approval of an increase in the company's authorized shares, plus a quarterly dividend of $0.08 per share on a pre-split basis, a 33.3% increase. Movado Group Inc. in March had about 8.8 million shares of common stock and 3.4 million shares of class A common stock outstanding, which would increase to about 24.4 million shares following the split.
Movado Group Inc. designs, manufactures, and distributes Movado, Ebel, Concord, ESQ, Coach, and Tommy Hilfiger watches worldwide and operates Movado boutiques and company stores in the United States.
