FinancialsAug 16, 2023
Pandora’s US Sales Improve in Q2 FinancialsAug 25, 2023
Movado Lowers Guidance Amid Q2 Sales Struggles
The company noted a “challenging environment for consumer discretionary products.”
These 36 mm square-dial watches are part of a Movado capsule collection in collaboration with the late artist Carmen Herrera. The company reported declining sales in its recent second quarter results.
Paramus, N.J.—Movado Group had a rocky second quarter, with sales falling double digits in the quarter and in the first half of its fiscal year.
The New Jersey-based company said it faced a “challenging environment for consumer discretionary products,” which it expects to continue, leading the company to significantly lower its full-year guidance.
“We managed our business well, delivering second quarter net sales and earnings within our range of expectations despite operating in a challenging retail environment for our category, particularly in the United States and Europe, our largest markets,” said CEO Efraim Grinberg in a statement.
Here are five takeaways from Movado’s recent earnings report.
Second-quarter sales fell as consumer demand weakened.
In the second quarter ending July 31, net sales fell 12 percent year-over-year to $160.4 million.
For the first half of the year, sales were down 12 percent to $305.3 million.
The first-half sales came at the high-end of Movado’s prior guidance of a 9 to 12 percent sales decline.
The company attributed the drop in sales to a decline in both its wholesale and retail businesses amid “a challenging environment for consumer discretionary products.”
“While economic numbers have remained stable, discretionary purchases have been challenged by inflation and a greater allocation of consumers’ resources to travel and dining,” said Grinberg during an earnings call Thursday morning.
Gross profit in the second quarter was $89.3 million, or 56 percent of net sales, compared with $106.9 million, or 59 percent of net sales in the previous second quarter.
For the first half of the year, gross profit was $171.3 million, or 56 percent of net sales, compared with $203.6 million, or 59 percent of net sales in the previous second quarter.
The decline in gross margin was due to “decreased leverage of higher fixed costs on lower sales,” said Movado, as well as “unfavorable” changes in channel and product mix and the impact of foreign currency exchange rates, though it was partially offset by reduced shipping costs.
Grinberg highlighted the company’s nearly $219 million in cash with no debt, allowing for continued investment.
U.S. sales continued to struggle amid inflation woes.
In the U.S., Movado’s sales were down 12 percent year-over-year in the second quarter and fell 14 percent in the first half.
Grinberg noted a difficult retail environment in North America, with single digit declines in the quarter in its outlet stores.
“We have also intentionally slowed down the growth of our digital outlet channel, where we believe we were opening with products that were too sharply priced,” he said.
Internationally, net sales were down 12 percent in the second quarter and fell 10 percent in the first half.
Sales in Europe “remained challenging,” he said, though the company saw strong results in India and the Middle East, as well as “a return to growth” in China.
From Tommy Hilfiger to Calvin Klein, its brands will introduce newness this fall.
Movado’s brand portfolio includes its eponymous brand as well as in-house and licensed brands, like Coach and Tommy Hilfiger.
Tommy Hilfiger’s spring offerings performed well, particularly at the opening price points. For fall, the brand will introduce the “Clark” and “Lexi” models that will begin at $189.
For Hugo Boss, the “Troper” and “Gregor” lines are performing well. In the fall, the brand will introduce a new chronograph collection and the “Candor Automatic Sport Lux” collection opening under $400.
Ahead of the holiday season, Hugo Boss is partnering with new brand ambassador, Suki Waterhouse.
For Coach, the “Cadie” collection has seen success. The brand will introduce the “Elliot” collection this fall, which opens at $125.
Lacoste has been “performing very well at retail,” said Grinberg, noting strong sell-through of its third generation of the Lacoste “12.12” collection, inspired by the brand’s polos. It will introduce a 12.12 automatic collection, retailing at $255, this fall, and “Spin,” a new sporty diver collection.
The Calvin Klein brand, launched under Movado last year, has also been doing well.
Grinberg noted strong retail sales in the “Sensation” range, while the “Black” collection has been a top seller for men. The brand recently debuted its new fall campaign featuring model Lila Moss.
Olivia Burton is undergoing a brand refresh in the U.K. and the U.S. with new products, point of sale and packaging, and a marketing campaign.
Movado’s brand refresh is launching this fall.
Grinberg said Movado remained “excited” about its brand refresh launching this fall.
“We’re introducing a total brand update for the Movado brand, which includes new marketing initiatives that we’ll roll out over the next few quarters, beginning with the launch of our new brand-building campaign in September,” he said.
The Movado brand will soon debut the “most important” collection of new products in its “Bold” collection since its launch more than 10 years ago.
It will revamp its “Evolution” collection, introducing “Evolution 2.0,” with a higher starting price point of $595.
Its “Bold TR90” collections will also get a refresh, introducing new designs and colors.
Movado will add a new titanium diver timepiece to the Bold range, a higher-end model that will retail for $1,495.
Movado lowered its full-year guidance.
Movado revised its full-year outlook, lowering its guidance and taking a pessimistic view of the fiscal year ahead.
“We expect the difficult environment for consumer discretionary products to persist into the back half of the year, which is reflected in our updated outlook that incorporates lower shipments across our wholesale partners in North America and Europe,” said Grinberg.
Movado lowered its expectations for full-year net sales, forecasting them to be in the range of $690 million to $700 million, down from its prior guidance of $725 million to $750 million.
Gross profit is forecast to be 55 percent of net sales, down from 56 percent, while operating income may be in the range of $62.5 million to $65 million, down from 80 million to $85 million.
More on Financials
The Latest
MajorsDec 24, 2024
Nordstrom Family, Partner to Take Retailer Private in $6B DealMembers of the founding family have partnered with Mexican retail company El Puerto de Liverpool to acquire Nordstrom.
MajorsDec 24, 2024
Boucheron Bets on Las VegasThe brand has opened its second U.S. location in the Fontainebleau resort and casino.
EditorsDec 24, 2024
The Spectrum Jewels I Want to Find Under the Tree Associate Editor Lauren McLemore highlights pieces from the AGTA Spectrum & Cutting Edge Awards she’d be thrilled to unwrap on Christmas.
Brought to you by
A Diamond Is Forever Celebrates "Forever Present" Holiday CampaignA Diamond is Forever hosted a holiday celebration in honor of their new marketing campaign, ‘Forever Present.’
SourcingDec 24, 2024
Gemfields to Temporarily Suspend Emerald MiningThe move is one of several cost-cutting measures outlined by the company as it faces a weaker luxury market and other challenges.
Weekly QuizDec 19, 2024
This Week’s QuizTest your jewelry news knowledge by answering these questions.
IndependentsDec 23, 2024
Philadelphia 76ers’ Tyrese Maxey Stars in The 1916 Company’s New CampaignThe retailer’s “On the Clock” campaign celebrates how time, precision, and purpose come together.
EditorsDec 23, 2024
My Favorite Piece of the Week Jewels of 2024Associate Editor Natalie Francisco chose her 12 favorite Piece of the Week picks from the year gone by.
Brought to you by
De Beers Group Launches Holiday Campaign for Natural Diamonds‘Forever Present’ campaign revives the iconic A Diamond is Forever tagline and celebrates the diamond dream.
GradingDec 23, 2024
GIA Adds Filler Identification to Emerald ReportsLab clients have the option to request this addition on their emerald reports.
Events & AwardsDec 20, 2024
Two Participants Complete Inaugural Ella Klein InternshipJamie Dunton and Gabriella Botelho are the first graduates of the program, created by the WJA Foundation and Julius Klein Diamonds.
CollectionsDec 20, 2024
Piece of the Week: Retrouvaí’s Ring for CharityIn the spirit of giving, Retrouvaí will donate $4,000 from the sale of this ring to the Los Angeles Regional Food Bank.
IndependentsDec 19, 2024
Michigan’s DeVries Jewelers Unveils New Location in Time for the HolidaysCo-owner Dan DeVries shared what it’s like moving into a space triple the size of its old store and how it feels to be a “real jeweler” now.
CollectionsDec 19, 2024
State Property Transforms Spain’s Generalife Gardens into JewelryAlong with the latest “Gardens” collection, the brand has released limited-edition designs offering more indulgent pieces.
CrimeDec 19, 2024
Alleged Jewelry Thieves Attempt Rowboat EscapeThe man and woman are accused of stealing jewelry from a shipping container then trying to flee by paddling a small boat out into a bay.
SourcingDec 19, 2024
The Second-Largest Diamond Ever Found Now Has a Name The 2,488-carat diamond recovered from a mine in Botswana has been dubbed “Motswedi” while its 1,094-carat sibling is “Seriti.”
SourcingDec 19, 2024
Gemfields Reports Record Ruby Auction Results Despite Challenges at SourceThe average price per carat hit a record high for the miner, which said it remains unaffected by the conflict in Mozambique.
AuctionsDec 18, 2024
Alexandrite Ring Sells for Record-Setting $1.9M at Sotheby’sThe nearly 17-carat stone made history for the color-change gem that, according to the auction house, is experiencing a “notable surge” in the market.
WatchesDec 18, 2024
Historic Titanic Pocket Watch Winds Its Way Back to Tiffany & Co. More than a century after survivors gifted a Tiffany timepiece to the captain of the ship that rescued them, the jeweler has reclaimed it.
TechnologyDec 18, 2024
Picchiotti Utilizes AI in ‘Spotlight’ Video CampaignThe videos highlight how pieces from the “Xpandable” and “Reversible Xpandable” collections put the wearer in the spotlight.
IndependentsDec 18, 2024
Industry Veteran Steve Feldman Set to RetireFeldman reflected on 45 years in the jewelry industry and clarified that it’s not a total retirement.
Events & AwardsDec 17, 2024
Chanel to Receive Gem Award for High Jewelry ExcellenceThe luxury brand is being honored for excellence in high jewelry design in its “Haute Joaillerie Sport” collection.
SourcingDec 17, 2024
Frank Circelli, Founder of Gem Shopping Network, Dies at 75Circelli was a pioneer in the world of TV shopping who is remembered for his passion for gemstones and his big personality.
AuctionsDec 17, 2024
Blue Diamond Fetches $8.8M at Christie’sThe nearly 6-carat stone headlined the recent jewelry auction, which also featured Mica Ertegun’s jewelry.
CrimeDec 17, 2024
‘Black Bin Crew’ Robbers Get 14-16 Years in Prison The three men, who got their nickname because they’d toss the jewelry they stole into black plastic bins, were arrested back in August.
TrendsDec 16, 2024
Marion Fasel’s New Book Delves Into the History of Engagement Rings“The History of Diamond Engagement Rings: A True Romance” is a 128-page small-format book containing more than 165 images.
WatchesDec 16, 2024
Take a Look Inside the New Rolex Boutique on Rodeo DriveGearys opened a 6,200-square-foot Rolex store with a design that pays homage to the brand’s connection to the ocean.
GradingDec 16, 2024
GCAL By Sarine Expands 8X to 2 More Fancy Shapes The diamond cut grade is now available for marquise- and pear-shaped diamonds.
