The Movado Group, headquartered in Paramus, N.J., on Sept. 8 announced strong half-year and second-quarter results. The results include the impact of the Ebel luxury watch business, acquired March 1, 2004.
In the first half, net sales rose 25.8% to $172 million, up from $136.7 million the prior year. Comparable store sales rose 18.4% at the company’s Movado boutiques.
Gross margin was 58.9%, compared with 61.2% the previous year. The addition of Ebel had a negative effect of about 0.8% on gross margins in fiscal 2005’s first half. Operating profit was $10.5 million vs. $10.8 million; The Ebel acquisition caused a $4.1 million decrease.
Net income was $7.8 million compared with $6.6 million the prior year. That includes the impact of Ebel, which was partially offset by $835,000 from a legal settlement the company reached with Swiss Army Brands.
The second quarter’s net sales rose 27.8% to $97.8 million, up from $76.5 million. Ebel accounted for net sales of $9.4 million. Comparable store sales went up 11.8% at Movado boutiques.
Gross margin was 59.3%, compared with 61.7% last year. Ebel’s acquisition had a negative effect of approximately 0.7%, said the report. Operating profit was $8.7 million, vs. $8.8 million. The Ebel addition resulted in a $1.7 million decrease in operating profit. Net income was $7.1 million, up from $5.8 million.
The Movado Group expects fiscal 2005’s full-year sales to be about $410 million—a gain of more than 20%—including Ebel sales, projected at between $40 million and $45 million.
The Group is planning a new global image-building campaign for Ebel featuring German supermodel Claudia Schiffer. That campaign, along with a new men’s campaign, will have “a prominent presence in the key fall fashion publications,” said Efraim Grinberg, Movado Group president and chief executive officer. He also said that new products and marketing programs are planned for Ebel in fiscal 2005’s second half. “They represent a return to the successful roots of the brand and truly convey [its] luxury image and rich heritage,” Grinberg added.
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.