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

Jewelers of America advocacy trip DC 2024
Policies & IssuesJun 18, 2024
JA, Industry Leaders Take Russian Diamond Import Concerns to D.C.

The group met with lawmakers to raise awareness about the financial, operational, and supply chain harms posed by an EU proposal.

Louis Comfort Tiffany 1900 gold and opal necklace
Events & AwardsJun 18, 2024
Driehaus Museum Displaying Rare Jewels From Chicago Collections

The museum also will host jewelry heist-themed movie nights throughout the run of “Chicago Collects: Jewelry in Perspective.”

Models wearing Pomellato’s “The Dualism of Milan” collection
CollectionsJun 18, 2024
Pomellato’s New High Jewelry Collection Celebrates Milan

“The Dualism of Milan” collection features two chapters representing the monochromatic and colorful spirit of the city.

Untitled design.jpg
Brought to you by
The End of an Era? Lab-Grown Diamonds' Journey Towards Price Stability

As the demand for lab-grown diamond jewelry may still be increasing, the most notable change we are likely to see is price stabilization.

Dorian Webb, Kealeboga and Ursula Pule
CollectionsJun 18, 2024
Zales Adds Dorian Webb, Nungu Diamonds to Designer Edit

The Designer Edit, launched earlier this year, highlights up-and-coming jewelry designers.

Weekly QuizJun 13, 2024
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
National Association of Jewelry Appraisers Logo
Events & AwardsJun 18, 2024
NAJA Announces Its Mid-Year ‘Ace It’ Conference

The conference will focus on the “practical ‘how to’ of appraising gems and jewelry,” said NAJA Executive Director Gail Brett Levine.

De Beers CEO Al Cook
EditorsJun 17, 2024
Q&A: Al Cook on the Future of De Beers

The De Beers CEO discussed the Anglo American situation, natural diamond marketing, and why the future of lab-grown diamonds is technology.

1872 x 1052 Gemolite.jpg
Brought to you by
Meet Gemology’s Next Generation Microscope: GIA® Gemolite® NXT Professional Edition

GIA®’s most advanced microscope has new features to optimize greater precision and comfort.

Bernd Munsteiner
SourcingJun 17, 2024
Fantasy Cut Inventor Bernd Munsteiner Dies at 81

Known to many as the “Picasso of gems" who modernized the gem cutting field, he is remembered by his family as going through life with open eyes.

Thomas Markle Jewelers interior
IndependentsJun 17, 2024
Thomas Markle Jewelers to Relocate

The Houston-based family jeweler is relocating its flagship just across the street.

Instore and Chicago Responsible Jewelry Conference Logos
Events & AwardsJun 17, 2024
Instore Show, Chicago Responsible Jewelry Conference to Co-Locate

The partnership, now in its second year, allows CRJC attendees to register for a free Instore show badge.

Stock image of a gavel
CrimeJun 14, 2024
2 Men Sentenced to Life in 2022 Murder of Detroit-Area Jeweler

In court, Daniel Hutchinson’s loved ones remembered the jeweler as a giver, a role model, and a leader.

Billie Bangle
CollectionsJun 14, 2024
Piece of the Week: Jade Trau’s ‘Billie’ Bangle

Take a walk along this bangle’s diamond “cobblestone” made from round-, pear-, and marquise-cut diamonds.

Graphic with headshots for My Next Question 2024 Las Vegas webinar
Recorded WebinarsJun 14, 2024
Watch: What Happened in Vegas in 2024

The National Jeweler editors discuss the hot topics, best jewels, and current trends that stood out during Jewelry Market Week.

QVC HSN logo
MajorsJun 13, 2024
HSN, QVC Parent Company Faces Delisting

Qurate Retail is in the middle of a turnaround plan as it battles declining sales.

45.07-carat step cut fancy vivid yellow diamond
AuctionsJun 13, 2024
45-Carat Yellow Diamond Withdrawn from Phillips Auction

Signed jewels and period pieces stood out at the sale.

Marie Lichtenberg Scapular necklace
TrendsJun 13, 2024
Amanda’s Style File: For the Fathers

Showcase your dad’s personal style with a piece of fine jewelry for Father’s Day.

The Eden Rose Diamond
AuctionsJun 12, 2024
10-Carat Pink Diamond Sells for $13M at Christie’s

“The Eden Rose” is a fancy intense pink diamond that was appearing at auction for the first time.

Charles & Colvard moissanite ring
GradingJun 12, 2024
IGI to Grade Charles & Colvard Moissanite

The partnership follows the launch of the jewelry company’s B2B moissanite platform.

Bruce Cleaver
SourcingJun 12, 2024
Bruce Cleaver Is Gemfields’ New Chair

The former De Beers CEO will step into the role next month.

Rose cut arch cabochons Columbia Gem House
SourcingJun 12, 2024
State of Colored Stones: Why the Market Is More Colorful Than Ever

As prices of “The Big Three” skyrocket, supply dwindles, and focus on sustainability grows, an age of open-mindedness is dawning.

Edward Arthur Jewelers logo
IndependentsJun 11, 2024
Edward Arthur Jewelers to Close After 53 Years

Owner Randy Brooks, whose brother opened the Maryland jewelry store in 1971, is retiring.

Greenwich St jewelers pride raffle
IndependentsJun 11, 2024
Greenwich St. Jewelers Is Hosting a Pride Month Raffle

Tickets to win a ring are for sale until June 13, with proceeds going to a trans care nonprofit.

National Jeweler columnist Peter Smith
ColumnistsJun 11, 2024
Vegas Musings: Equal Parts Noise and Inspiration

Fresh off Jewelry Market Week 2024, Peter Smith separates the positive—retail and product innovation—from the positively annoying.

Katherine Jetter CASE Award winning ring
Events & AwardsJun 11, 2024
The 2024 CASE Awards Are Open for Entries

Submissions will be accepted now through July 17.

Swarovski New York City flagship
IndependentsJun 10, 2024
State of Retail: 4 Retail Design Trends for 2024

From lighter color palettes to the integration of AR, experts offer inspiration for jewelers in need of an aesthetic refresh.

Van Cleef & Arpels 1929 tie necklace
AuctionsJun 10, 2024
Van Cleef & Arpels Necklace From 1929 Sells for $3.6M at Auction

The rare piece went home with a Sotheby’s executive.

×

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