Movado Sales Slip in Q1 Amid Inflation Woes, Tough Comps

FinancialsMay 26, 2023

Movado Sales Slip in Q1 Amid Inflation Woes, Tough Comps

The company has plans to revamp the Movado brand and offer less expensive watches this year.

Models wearing Calvin Klein watches and jewelry
A campaign image from last year’s spring/summer Calvin Klein watch and jewelry collection, a licensed brand in Movado’s portfolio. The company posted an 11 percent net sales decline year-over-year in the first quarter.
Paramus, N.J.—Movado Group had a rough start to its fiscal year 2024 with first-quarter sales down double digits.

The New Jersey-based company said it faced a “challenging macro environment” and tough comparables after a record first quarter last year.

“Despite this backdrop, our teams continued to execute against our strategic priorities to maximize the power of our brands with exceptional innovation,” said CEO Efraim Grinberg in a statement.

Here are five takeaways from Movado’s recent earnings report.

First-quarter sales were down but still better than expected.

In the first quarter ending April 30, net sales fell 11 percent year-over-year to $144.9 million, which the company attributed to declines in wholesale to its customers’ physical stores, online retail, and its own stores.

The sales came in just ahead of Movado’s prior guidance of a 12 to 15 percent sales decline.

Gross profit was $82 million, or 57 percent of net sales, compared with $96.7 million, or 59 percent of net sales in the previous first quarter.

The decline in gross margin was due to “unfavorable changes in channel and product mix” and the impact of foreign currency exchange rates, said Movado, which was partially offset by reduced shipping costs.

Grinberg noted its outlet business saw a 4 percent decline in Q1 amid a “highly promotional U.S. environment.”

Inflation and rising interest rates have impacted sales.

“As we had expected, the macroeconomic environment remained challenging during the beginning of the year with inflation and rising interest rates continuing to affect purchases made by consumers of discretionary products in our key markets, the U.S. and Europe,” Grinberg said on an earnings call Thursday.

In the U.S., Movado’s quarterly sales were down 16 percent year-over-year.

Internationally, net sales were down 8 percent in the first quarter.

The company noted strong growth in Brazil, the Middle East, and China, as well as in travel retail, which somewhat offset its decline in Europe.

“As retailers in key markets deal with slowing economic growth, they are very focused on making sure they control their inventories. From a brand perspective, we are laying the foundation for an improving second half,” said Grinberg.

Grinberg noted consumers have pulled back on discretionary purchases as the basics become more expensive.

 Related stories will be right here … 

The Movado brand is getting a refresh.

Movado will be revamping the image of its eponymous watch brand.

“Throughout the year, we will invest in refreshing the Movado brand image in a bolder and more impactful way and we are excited to make this investment behind our most important brand,” said Grinberg, adding it will begin in the second half of the fiscal year.

Its Mother’s Day marketing produced positive results, he said, particularly its TV ads. For Father’s Day, it has both TV and digital ads in the works.

Movado said its “Bold” collection is performing well, as is the newly added “Bold Horizon” watches, which Grinberg said are filling previously vacated price points.

It starts at $695 and has elicited a “good response” from consumers.

Its elevated and more expensive automatic models have also been doing well, especially through wholesale and on Movado’s website.

There’s newness for its licensed brands, including some less expensive watches.

Movado’s brand portfolio includes its eponymous brand as well as in-house and licensed brands, like Coach and Tommy Hilfiger.

“We’re reintroducing some opening price points, particularly in our licensed brand portfolio as consumers become stressed in other areas,” said Grinberg. “And we've seen some very good initial responses to some of the things that we've brought to the market quickly.”

Tommy Hilfiger is offering lower opening price points via its “Pippa” and “Norris” models.

Hugo Boss is following suit via the sporty “Trophy” collection and the “Gregor” collection, with both opening at $279.

The brand is partnering with English actress Suki Waterhouse in the fall for its jewelry and watch campaign.

For Coach, the “signature C” style watches are performing well, with Movado noting renewed demand for the brand in China amid the country’s reopening after COVID-19 restrictions.

Lacoste has a new interpretation of its “L.12.12” polo shirt as a watch, offering an aluminum version in new colors.

The brand will also introduce watches inspired by three Netflix series, “Stranger Things,” “Sex Education,” and “Lupin.”

The Calvin Klein brand, launched under Movado last year, also has been doing well, particularly the newly introduced “CK Sensation” watch and the all-black “Ambitious” watch.

Movado sees the “difficult consumer environment” continuing.

“As we look ahead, we continue to believe we will face a difficult consumer environment in the U.S. and Europe, our two largest regions,” said Grinberg.

“However, we believe we are well positioned to capture the opportunities in the marketplace and will continue to execute with discipline,” he said.

Grinberg highlighted his excitement about the company’s product innovation and “refreshed” marketing.

“We will do all this while controlling costs and leveraging the strength of our balance sheet with $198 million in cash and no debt as of quarter end.”

Movado maintained its prior guidance, expecting full-year net sales to be in the range of $725 million to $750 million.

Gross profit is forecast to be 56 percent of net sales while operating income may be in the range of $80 million to $85 million.

In the first half of the fiscal year, Movado expects sales to decline 9 to 12 percent year-over-year, noting its record first-half results in the previous year.

The Latest

De Beers Ryan Perry and David Prager
SourcingDec 04, 2023
David Prager To Leave De Beers in 2024

Ryan Perry, who has been with De Beers since 2002, also will be leaving the company next year.

Chrono24 ChronoPulse
WatchesDec 04, 2023
Chrono24 Debuts the ‘Dow Jones’ for Luxury Watches

The watch seller’s new index tracks sales data from 14 brands, including Rolex and Patek Philippe.

David Bouffard Signet Jewelers
MajorsDec 04, 2023
David Bouffard to Leave Signet, RJC

The industry veteran will step down from both roles in April 2024.

De Beers | Diamonds Falling
Brought to you by
The Most Important “C” in Diamonds: Confidence!

Without the ability to instill confidence within the industry and directly to the consumer, a diamond holds very little value.

David Webb turquoise and lapis ring
TrendsDec 04, 2023
Amanda’s Style File: Decadent December

Tanzanite, turquoise, and zircon are all options for December babies, who sometimes “get the birthday shaft,” Amanda Gizzi writes.

Weekly QuizNov 30, 2023
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Lightbox x Roséate Light Wand pendants
Lab-GrownDec 01, 2023
Lightbox Teams Up With Brand Founded by Former Tiffany Exec

The lab-grown diamond brand also collaborated with the website The Future Rocks on a collection launching today.

Muzo emerald and argyle pink diamond necklace
CollectionsDec 01, 2023
Piece of the Week: Muzo’s Emerald and Argyle Pink Diamond Necklace

It’s the hero piece of the newest "Green Jewel" collection, a collaborative offering from the two mines.

Platinum  Guild International Diamond Rings
Brought to you by
If It’s Custom, Make It Platinum

With holiday proposals right around the corner, encourage your customers to go for platinum when making the big purchase.

Pink Supreme Diamond
AuctionsNov 30, 2023
This Pink Diamond Reigned Supreme in Hong Kong

The 15.48-carat fancy intense “Pink Supreme” topped Christie’s fall jewelry auction in Asia, while a Patek Philippe led the watch sale.

Claire’s CFO COO Chris Cramer
MajorsNov 30, 2023
Claire’s Hires Former Bath & Body Works Exec as CFO, COO

Chris Cramer, who also spent time at Gen Z intimates brand Parade, will take on the dual role.

133 carat yellow diamond
AuctionsNov 30, 2023
Sotheby’s To Auction 133-Carat Yellow Diamond

The stone headlining the upcoming sale could fetch up to $5 million.

Kwiat diamonds
IndependentsNov 30, 2023
Frank Adams Rolls Out Kwiat’s ‘Mine to Shine’ Program

The retail offering lets customers track their diamond’s journey.

Diamond development hub in Angola
SourcingNov 29, 2023
Largest New Diamond Mine of the Decade Coming Online in Angola

The Luele mine is expected to eventually make the country the world’s third-largest diamond producer.

Holiday shoppers holding bags
SurveysNov 29, 2023
Holiday Shoppers Broke a Record This Weekend, Says NRF

From Thanksgiving through Cyber Monday, 200.4 million consumers shopped online and in stores.

Cast StyleBar Nordstrom
MajorsNov 29, 2023
Cast Debuts at Nordstrom, Closes on More VC Funding

The growing company also plans to open more of its own boutiques.

EditorsNov 29, 2023
Warren Buffett on Success, Mistakes and Betting on America

The best quotes from the Oracle of Omaha and his right-hand man Charlie Munger from the 2018 Berkshire Hathaway shareholders meeting.

J. Dostie Jewelers
IndependentsNov 28, 2023
Maine Jeweler to Relocate After 76 Years

J. Dostie Jewelers will move from Lewiston to Yarmouth this spring.

Finks Jewelers new store
IndependentsNov 28, 2023
Fink’s Jewelers Opens 10th Store

It’s the company’s second location in Tennessee.

Mary Tyler Moore and a pair of Elsa Peretti Bone Cuffs
AuctionsNov 28, 2023
Mary Tyler Moore’s Jewelry Is Up For Auction

You can have this jewelry, why don’t you take it?

Original Miami Beach Antique Show 2024
Events & AwardsNov 28, 2023
The Original Miami Beach Antique Show Is Celebrating 60 Years

Next year’s milestone show will be full of educational programming and collaborations.

De Beers Metamorphosis high jewelry earrings
EditorsNov 27, 2023
10 Tips for Selling Diamonds This Holiday Season

Sales experts and a diamantaire share their best advice on how to send customers home with diamond jewelry.

Platinum Born new collection
CollectionsNov 27, 2023
See the New ‘Platinum Born’ Jewelry

The brand has released five new collections.

Frank Adams Jewelers
IndependentsNov 27, 2023
Frank Adams Jewelers Named ‘Family Business of the Year’

The Albany Business Review recently honored the 100-year-old company.

GIA Dr. John W. Valley
GradingNov 27, 2023
Dr. John W. Valley Retires from GIA Board of Governors

To honor his legacy, GIA has set up a scholarship in his name.

Stock image of police car with its lights on
CrimeNov 22, 2023
JSA Warns of Surge in Attacks on Jewelers on the Road

There have been eight attacks in the last month, spanning from a jewelry store parking lot in Rhode Island to highways in California.

Buddha Mama citrine bangle
TrendsNov 22, 2023
Amanda’s Style File: November Glow

These 15 pieces of jewelry celebrate November babies and the hues of citrine and topaz that reflect the colors of the season.

Columbia Gem House fundraiser
SourcingNov 22, 2023
Columbia Gem House Raises $12K for Wildlife

The money will help a nonprofit rehabilitate sea turtles.


This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy