Financials

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

Gina Drosos, Joan Hilson, and Jamie Singleton
EditorsMar 18, 2024
Q&A: Signet CEO Gina Drosos on Natural Diamonds

Drosos shared her top takeaways from a recent Botswana trip and her insights into the natural diamond market.

Claire’s storefront
MajorsMar 18, 2024
Claire’s to Launch in 4,400 Walgreens Stores

The retailer is expanding its footprint via retail partnerships, previously inking deals with Kohl’s and Macy’s.

Jewelers of America logo
MajorsMar 18, 2024
JA Partners with eBay on New Member Benefit

Members will now have access to “eBay Concierge,” a white-glove dedicated customer service team.

BTYB-HoBrothers-updated.png
Brought to you by
The Scalable, Professional, and Effortless Solution for High-Demand Custom Jewelry Retailers

Ho Brothers offers scalable solutions for the future of custom jewelry.

The Jewelry Symposium logo
Events & AwardsMar 18, 2024
The Jewelry Symposium Launches Inaugural Scholarship

The deadline to apply is March 29.

Weekly QuizMar 14, 2024
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Arkansas crater of diamonds eclipse tickets
SourcingMar 15, 2024
Crater of Diamonds State Park Selling Eclipse Tickets

Ticketholders can dig for diamonds in the Arkansas park ahead of the eclipse viewing event on April 8.

Lotus Tiara
CollectionsMar 15, 2024
Piece of the Week: The Lotus Tiara

The versatile jewel pairs ancient Egyptian inspiration with a modern design.

GIA id100
Brought to you by
Full Disclosure at Your Fingertips

Distinguishing natural diamonds from laboratory-grown stones – now more available than ever – has been difficult for jewelers. Until now.

Stock image of rough diamonds mined by De Beers
SourcingMar 14, 2024
De Beers Says Retailers Are ‘Restocking Conservatively’

The company’s rough sales improved for the third sales cycle in a row.

Gemological Institute of America logo
GradingMar 14, 2024
GIA Has a New Scholarship for High School Students in San Diego

The spring application window closes on March 31.

15.51-Carat Yellow Diamond
AuctionsMar 14, 2024
Phillips Hong Kong to Auction 15.51-Carat Yellow Diamond

It’s estimated to sell for up to $1.3 million at the upcoming sale on March 28.

Hedda Schupak
Events & AwardsMar 14, 2024
WJA Foundation Establishes Scholarship in Hedda Schupak’s Honor

It aims to support aspiring journalists, media professionals, content creators, and communicators.

Slick Rick
Events & AwardsMar 13, 2024
A Celebration of Hip-Hop Jewelry Is Coming to AMNH

“Ice Cold: An Exhibition of Hip-Hop Jewelry” will open at the New York City museum on May 9.

Dave Meleski
MajorsMar 13, 2024
Richline’s Dave Meleski Takes Over as RJC Chair

He succeeds David Bouffard, who is leaving Signet and the RJC next month.

Zachary’s Jewelers Mother’s Day kids jewelry contest
IndependentsMar 13, 2024
Zachary’s Jewelers Is Holding a Mother’s Day Jewelry Contest for Kids

Three winners will have their jewelry sketches turned into a real piece of jewelry in time for the holiday.

Boucheron Power of Couture
CollectionsMar 13, 2024
Boucheron’s New High Jewelry Collection Pays Homage to Ceremony, History

“Power of Couture” recalls Frédéric Boucheron’s love of fabric using diamonds and rock crystal.

Harry Winston diamond necklace
AuctionsMar 12, 2024
Top Lots Don’t Sell at Sotheby’s Signed Jewels Auction

A Harry Winston diamond necklace and other top lots failed to find buyers.

National Jeweler columnist Lilian Raji
ColumnistsMar 12, 2024
The PR Adviser: Closing Sales and Following Up

Lilian Raji offers advice to a business owner who is having trouble crossing the finish line with customers.

Steve Webb
MajorsMar 12, 2024
Steve Webb Named EVP of The Gordon Company

He brings 30 years of retail store management experience to the role.

Diamonds Do Good Awards logo
Events & AwardsMar 12, 2024
DDG to Honor 3 Industry Veterans in Vegas

At its annual gala, Diamonds Do Good will present awards to GIA, London Jewelers, and Lisa Bridge.

Cynthia Erivo
EditorsMar 11, 2024
This Year’s Oscars Jewelry Was the Definition of Glamour

Vibrant gemstones, layered diamond pieces and brooches with a story stole the show.

2024 Gem Awards audience
Events & AwardsMar 11, 2024
Gem Awards Highlight the Power of Retail, Community

The 2024 winners expressed gratitude to their teams, industry colleagues, and those who turn jewelry dreams into reality.

Jewelry from designers Jean Prounis, Marla Aaron, and Marie Lichtenberg
CollectionsMar 08, 2024
Pieces of the Week: Gem Award for Jewelry Design Nominees

They are Marla Aaron, Marie Lichtenberg, and Jean Prounis.

Peter Montalbano
Events & AwardsMar 08, 2024
Peter Montalbano to Receive JSA Industry Service Award

The Jewelers’ Security Alliance will honor the industry veteran at its upcoming annual luncheon.

Pomellato International Women’s Day video campaign
Policies & IssuesMar 08, 2024
Pomellato’s 2024 IWD Video Calls for an End to Violence Against Women

The annual video stars Pomellato CEO Sabina Belli alongside Jane Fonda and other celebrities and activists.

970x250.jpg
Supplier BulletinMar 07, 2024
Empower Your Team with IGI’s Comprehensive Educational Services

Sponsored by IGI

Eddie Grove
IndependentsMar 07, 2024
‘Old-School’ Jewelry Salesman Eddie Grove Dies at 81

The Pennsylvania native, who sold for Gumuchian and others, is remembered for being kind and outgoing.

×

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