Financials

Movado Lowers Guidance as Q2 Sales Slip

FinancialsSep 06, 2024

Movado Lowers Guidance as Q2 Sales Slip

CEO Efraim Grinberg pointed to a challenging consumer spending environment, particularly in the watch category.

Movado Connect 2.0 watches
A set of Movado Connect 2.0 watches. The company reported declining sales in its recent second quarter results.
Paramus, N.J.—Movado Group posted declining sales in its second-quarter results, lowering its fiscal guidance for the year ahead as consumer spending on watches remains “difficult.”

“While increased marketing investment coupled with our initiatives to enhance retail performance drove improvement in our sales trend from the first quarter, second quarter sales and earnings were below our expectations due to the challenging consumer spending environment compounded by increased expenses to support future growth,” CEO Efraim Grinberg said.

The company previously announced its plan to increase marketing spend to $25 million, which ramped up in the second quarter.  

It recently launched a new Movado campaign called “When I Move You Move,” a nod to the lyrics in Ludacris’ song “Stand Up,” which is featured in the campaign. 

The retailer is hoping the new campaign, featuring famous faces like Ludacris, Julianne Moore, Jessica Alba, Tyrese Haliburton, and Christian McCaffrey, will bolster sales. 

In the second quarter ending July 31, net sales fell about 1 percent year-over-year (less than 1 percent on a constant dollar basis) to $159.3 million. 

Net sales for the first half were down 3 percent to $296 million. 

Movado attributed the decrease to mixed sales at brick-and-mortar stores owned by wholesale customers, as well as those operated by Movado, partially offset by an increase in U.S. online retail. 

“While we are excited by the initiatives that we have put in place, the consumer spending environment in the watch category continues to be difficult in many markets around the world and we believe this will have an impact on our second half results,” said Grinberg. 

On an earnings call Thursday morning, Grinberg noted that its retail partners, especially in the U.S. and Europe, placed orders “cautiously.” 

There were some bright spots in the quarter, said Grinberg, which the retailer plans to capitalize on in the second half of the year. 

Movado brand sales were up 1 percent, noting significant growth in the direct-to-consumer channel as Movado.com sales rose 21 percent. The rise was partially offset by a 6 percent decline in its wholesale channel. 

Grinberg noted the success of its “Movado Bold Quest” collection, which features a design inspired by a vintage Movado watch from the 1970’s.  

“Opening at $595, Bold Quest fills more accessible price points that we had previously vacated,” he said. 

As for its jewelry offerings, Grinberg noted on the call that “jewelry is actually outperforming watches in our fashion brands and seems to be doing very well.”  

“That continues to represent a big opportunity for the company as we grow that business, [which is] particularly strong in markets like Europe and Mexico.” 

The Movado brand will refresh its jewelry assortment, beginning early next year, he said. 

 Related stories will be right here … 

Looking to the U.S., quarterly sales were down less than 1 percent year-over-year while international sales fell 1 percent (less than 1 percent on a constant dollar basis). 

First-half net sales in the U.S. and internationally were down 3 percent year-over-year. 

Second-quarter gross profit was $86.4 million, or 54 percent of net sales, compared with $89.3 million, or 56 percent of net sales, in the previous second quarter. 

The decrease in gross margin percentage in Q2 was attributed to an “unfavorable” change in channel and product mix. 

First-half gross profit was $161.9 million, or 55 percent of net sales, compared with $171.3 million, or 56 percent of net sales, in the previous first half. 

The first-half decrease in gross margin percentage was attributed to an “unfavorable” change in channel and product mix as well as decreased leverage of higher fixed costs on lower sales, partially offset by reduced shipping costs. 

Net income in Q2 was $3.7 million, down 54 percent compared to net income of $8 million in the second quarter of fiscal 2024. 

First-half net income was $6.6 million, down 62 percent compared to net income of $17.2 million in the first six months of last year. 

Movado lowered its guidance for the year ahead, citing a challenging environment. 

It now expects fiscal 2025 net sales to be between $665 million and $675 million, down from its prior guidance of $700 million and $710 million. 

Second-half sales are expected to be flat to slightly positive year-over-year. 

Gross profit is expected to be 54 percent of net sales, down from its previous expectation of 55 percent. 

Operating income is forecast to be in a range of $23 million to $26 million, as compared to its previous expectation of $32 million to $35 million. 

“As we begin to plan for next fiscal year, we are committed to reducing our operating expenses to improve profitability. At the same time, we expect the combination of our upcoming marketing initiatives, along with compelling innovation, to drive excitement for our brands and business,” said Grinberg. 

The Latest

The 2025 Gem Awards
Events & AwardsMar 17, 2025
Gem Awards Honor All Facets of the Industry

From retailers to designers and the media, the fine jewelry industry recognized one another’s work and looked to the future.

Eleanor H. Yeh GIA jewelry design
Events & AwardsMar 17, 2025
GIA Names Winner of Emerging Jewelry Design Talent Award

Eleanor H. Yeh is the recipient of the eighth annual Gianmaria Buccellati Foundation Award for Excellence in Jewelry Design.

 Joseph Cavalcante Tous managing director
MajorsMar 17, 2025
Tous Names U.S. Managing Director, VP

Joseph Cavalcante takes on the dual role as the Spanish jewelry brand looks to expand further into the U.S. market.

Supplier Spotlight -Recorded-Webinar.png
Brought to you by
Watch: GIA Field Gemology at the One-Hundredth Expedition: A Look Back and to the Future

Supplier Spotlight Sponsored by GIA

Continental Buying Group logo
Events & AwardsMar 17, 2025
CBG Expands Las Vegas Show to 3 Days

The trade show has also upgraded its venue to the Caesars Forum Conference Center.

Weekly QuizMar 14, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Stafford’s Diamonds closing ad
IndependentsMar 14, 2025
Stafford’s Diamonds in Ohio to Close After 40 Years

The Dayton-based jeweler, which has been in business since 1985, was formerly known as Stafford Jewelers.

Alan Zimmer
Events & AwardsMar 14, 2025
JVC Reveals Recipient of Stanley Schechter Award

Reeds Jewelers CEO Alan Zimmer will be presented with the honor at JVC’s annual luncheon.

Facets-of-Fire-Difference-You-Can-See.jpg
Brought to you by
Natural Diamonds Should Mean More

Natural diamonds mean more than lab-grown, but when every cut is ideal, they all look the same. Customers want more—Facets of Fire delivers.

Sorellina’s Aries Zodiac Pendant
CollectionsMar 14, 2025
Piece of the Week: Sorellina’s Aries Zodiac Pendant

The piece, celebrating birthdays from March 21 to April 19, debuted with Sorellina’s new line of astrological pendants.

Tanishq Atlanta store
MajorsMar 13, 2025
Tanishq Opens 2 New Stores in the U.S.

The Indian jewelry brand recently opened stores in Atlanta and Seattle.

Chopard Insofu emerald collection
CollectionsMar 13, 2025
Chopard Unveils High Jewelry Collection Created From 6,225-Carat Emerald

The 15 pieces were crafted from the “Insofu” emerald, discovered in Zambia in 2010.

Chris Anderson
MajorsMar 13, 2025
Jewelers Mutual Names New CFO, Treasurer

Chris Anderson is joining the insurance provider as the new chief financial officer and treasurer.

Jewelers of America’s new natural and lab-grown diamond brochure
Lab-GrownMar 13, 2025
JA Offering Some ‘Counter Intelligence’ on Diamonds

Jewelers of America is distributing a brochure for retailers to use when discussing the differences between natural and lab-grown diamonds.

A rough diamond and a polished diamond
SourcingMar 12, 2025
5 Factors That Will Impact the Diamond Industry in 2025

The industry is changing as it grapples with new realities around distribution, supply, and the need for consistent, effective marketing.

New Gem & Jewellery Export Promotion Council Chairman Kirit Bhansali
SourcingMar 12, 2025
Q&A: New GJEPC Chairman Kirit Bhansali

Bhansali discusses the potential impact of U.S. tariffs, demand for diamonds by market, and the “cautious confidence” in India right now.

Limelight Lab Grown Diamond store in India
Lab-GrownMar 12, 2025
Beyond Jewelry: Possibilities in the Lab-Grown Diamond Sector

As lab-grown diamond brands pop up across India, academics are researching how to grow demand outside of the jewelry industry.

Diamonds Do Good honoree Govind Dholakia at medical camp
SourcingMar 12, 2025
Indian Leader, Retailer Among 2025 DDG Honorees

Govind Dholakia and Tanishq will be recognized for their contributions to the industry at the Diamonds Do Good Awards in Las Vegas.

Marla Aaron Liberty London Shop-in-Shop
IndependentsMar 12, 2025
Marla Aaron Migrates to London

The New York City-based brand has opened its first U.K. location with a permanent shop-in-shop at Liberty in London.

Medieval sapphire bishop ring
AuctionsMar 12, 2025
A Medieval Bishop’s Sapphire Ring Is Going Up for Sale

A metal detectorist discovered the ring that is believed to have belonged to a bishop in the late 12th to early 13th century.

JA New York sign
Events & AwardsMar 12, 2025
JA New York Announces Education, Live Demo Lineups

Organizers looked to new partnerships and interactive experiences to enhance the spring show, set for March 16 to 18.

Jewelers Vigilance Committee annual luncheon 2025 logo
Events & AwardsMar 12, 2025
Bogolo Joy Kenewendo to Speak at Annual JVC Luncheon

Kenewendo, Botswana’s minister of minerals and energy, will discuss the future of diamonds.

Jaythan Lawrence Gilder and body scan
CrimeMar 11, 2025
Man in Florida Swallows Allegedly Stolen Tiffany & Co. Jewelry

The suspect allegedly stole almost $800,000 worth of diamond jewelry from a store in Orlando and then swallowed it during a traffic stop.

Duvall O’Steen and Jen Cullen Williams
ColumnistsMar 11, 2025
Creative Connecting: How to Pose on the Red Carpet

Ahead of the Gem Awards on Friday, Jen Cullen Williams and Duvall O’Steen share pro tips for taking the best photos.

Marco Bicego 25 Years Campaign Isabeli Fontana
CollectionsMar 11, 2025
Marco Bicego Celebrates 25 Years With Collection, Campaign

Founded in 2000, Marco Bicego is commemorating its milestone anniversary with a “25 Best” collection and campaigns honoring its heritage.

Hill & Co The List
TechnologyMar 11, 2025
Hill & Co. Launches New B2B Buyer Database

Those attending the company’s upcoming Zoom workshop will receive early access to “The List,” its new resource for finding buyers.

Amy-Elise Signeavsky GIA
Events & AwardsMar 11, 2025
JSA to Honor GIA Employee at Annual Luncheon

The organization will present an award to Amy-Elise Signeavsky, law enforcement and diamond recovery manager at GIA.

Picture of Terry Chandler, president and CEO of the Diamond Council of America
MajorsMar 10, 2025
Terry Chandler to Retire After 24 Years as Head of DCA

Chandler started his jewelry career at Michelson Jewelers, joining the Diamond Council of America as president and CEO in 2001.

×

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