Sales for the Movado Group Inc., 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 10.0% to $330.2 million, and net income increased 13.9% to $22.9 million, the company announced March 12. Operating profit increased 9.5% to $34.8 million. Gross margin was 60.7% compared to 61.4%, primarily resulting from the impact of the weak U.S. dollar. For Movado boutiques, comparable store sales increased 20.1%.
For the fourth quarter, net sales were $92.7 million, a 16.6% increase. Net income grew 11.2% to $6.2 million compared. Operating profit increased 7.8% to $9.2 million. Comp store sales were up 15.1%.
Also, as announced March 1, the company early this year completed acquisition of the well-known Swiss luxury watch brand Ebel. The Movado Group plans to use Ebel to expand its presence in the luxury watch category and international markets.
In addition, for the second consecutive fiscal year, the company posted a record cash flow from operations, in excess of $50 million.
“Our excellent fourth-quarter performance capped a banner year for Movado Group,” said Efraim Grinberg, president and chief executive officer. “For both the quarter and the year, we delivered record sales, profits, and cash flow. During the fourth quarter, we experienced growth across all of our brands—Movado, Concord, Coach, ESQ, and Tommy Hilfiger—with sales gains domestically and internationally. Our boutique business continues to strengthen the luxury brand image of Movado, and we’re very excited about the acquisition of premier Swiss luxury watch brand Ebel and the future growth potential that lies ahead for our company.” As the Group enters fiscal year 2005, he said, “we’re well-positioned to capitalize on the positive trends we’re experiencing across all of 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. currently has about 8.8 million shares of common stock and 3.4 million shares of class A common stock outstanding, which would increase to an aggregate of about 24.4 million common shares following the split.
Citing recent results, including the record cash flow, Grinberg said the 33% increase in the quarterly dividend is “a great way for our shareholders to participate in the company’s achievements,” while the stock split will make its shares more accessible to investors and increase the firm’s market liquidity.
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.