FinancialsAug 13, 2024
Pandora Raises Guidance Again as Q2 Sales Climb Double DigitsFinancialsSep 06, 2024
Movado Lowers Guidance as Q2 Sales Slip
CEO Efraim Grinberg pointed to a challenging consumer spending environment, particularly in the watch category.
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 …
“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.
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.
Editors' Picks
Sponsored by
More on Financials
The Latest
MajorsMar 07, 2025
Jane Fonda, Mariska Hargitay Star in Pomellato’s IWD CampaignThe annual star-studded campaign for International Women’s Day encourages collective action against domestic violence.
CollectionsMar 07, 2025
Piece of the Week: Yeprem’s ‘Golden Strada’ NecklaceThe statement piece is seen in Yeprem’s new “You Play the Game” campaign, created for International Women’s Day.
MajorsMar 07, 2025
Borsheims Names New Senior Security and Facilities ManagerLongtime employee Kyle Slosson has been promoted to the role.
Brought to you by
Have a Plan for EmergenciesEmergencies can happen anytime, anywhere , and Jewelers of America has what you need to be prepared for it all.
IndependentsMar 06, 2025
Wixon Jewelers to Close After 37 YearsFirst-generation jewelers Dan and Hope Wixon are retiring and will close their Minneapolis-area jewelry store in May.
Weekly QuizMar 06, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
CollectionsMar 06, 2025
Guzema, 3.1 Phillip Lim Collab on New ‘Snake’ DesignsThe limited-edition collection, a nod to the Year of the Snake, is Ukrainian brand Guzema’s first partnership with a U.S. brand.
IndependentsMar 06, 2025
Stephen Barnes Is the New Owner of IJOAfter more than 50 years, Jeff Roberts is handing over ownership of the organization to IJO President Stephen Barnes.
Brought to you by
A Diamond ETF is the Way to Reinvigorate Natural Diamond SalesThe jewelry industry faces challenges from lab-grown diamonds. A diamond ETF can restore natural diamonds' value and drive investor demand.
Events & AwardsMar 06, 2025
Borsheims’ ‘Ike-It’ Award Goes to JewelerSenior Jeweler Jay Wolff was named employee of the year.
MajorsMar 05, 2025
Neiman Marcus’ Dallas Flagship Store to Close, Confirms Saks GlobalThe 111-year-old store will close following a dispute among Saks Global, a landlord, and the City of Dallas over a small piece of land.
AuctionsMar 05, 2025
Sotheby's To Auction 51 ‘Alien’ WatchesThe upcoming “Area_51” watch sale is a collaboration with heist-out, featuring vintage and modern timepieces with futuristic designs.
MajorsMar 05, 2025
Jewelers of America Unveils 3-Year Strategic Plan The trade organization, which will mark 120 years of service next year, has a refined focus and a new mission statement.
Events & AwardsMar 05, 2025
92NY Accepting 2025 Jewelry Artist Residency ApplicationsThe application period is now open for established and emerging jewelers and metalsmiths to apply to the month-long residency program.
CrimeMar 04, 2025
4 Suspects Arrested in Fatal Armed Robbery of California Jewelry Store Uc Thí Vo, who co-owned Kim Tin Jewelry in Sacramento with her husband of 40 years, was killed during the November 2024 robbery.
CrimeMar 04, 2025
NYC Diamond Dealer Pleads Guilty to Lab-Grown Diamond SwapsManashe Sezanayev pleaded guilty to grand larceny and is expected to receive five years’ probation when he’s sentenced in May.
TrendsMar 04, 2025
Amanda’s Style File: Peaceful and Powerful AquamarineThe March birthstone pairs perfectly with hues of Mocha Mousse, Pantone’s Color of the Year for 2025.
ColumnistsMar 04, 2025
The Smart Lab: Using Online Events to Supercharge Sales Emmanuel Raheb shares strategies to prepare for, publicize, and engage the audience during events on platforms like TikTok and Zoom.
EditorsMar 03, 2025
Drop Necklaces, Archival Pieces Take Over at the 2025 OscarsFrom Doja Cat to Mikey Madison and Selena Gomez, many of this year’s Academy Awards attendees donned drop necklaces.
Policies & IssuesMar 03, 2025
Customs Indefinitely Postpones Requirement to Disclose Country of MiningOriginally slated to take effect in April, official U.S. Customs and Border Protection documents now show the implementation date as “TBD.”
SurveysMar 03, 2025
Consumer Confidence Fell in February Amid Concerns About the FutureThe recent jump in the prices of household staples, like eggs, and the potential impact of tariffs worried consumers.
Events & AwardsMar 03, 2025
AGA Now Accepting Applications for Its Gemological Education Scholarship The application period for the program is now open for aspiring gemologists around the world.
CollectionsFeb 28, 2025
Piece of the Week: Ironhorse Quillwork EarringsThe work of Indigenous designer Joe Big Mountain, these earrings are similar to the pair Lily Gladstone just wore to the SAG Awards.
AuctionsFeb 28, 2025
300-Year-Old Ring With Ties to Witch Trial Judge Up for Auction A metal detectorist uncovered the ring created in memory of Sir Richard Rainsford, who presided over some of England’s last witch trials.
Recorded WebinarsFeb 28, 2025
Watch: 2025 Jewelry Trends ForecastFine jewelry consultant and publicist Francesca Simons joins Amanda Gizzi and Natalie Francisco to discuss the trends set to rise this year.
TrendsFeb 27, 2025
Model Winnie Harlow Says ‘Yes’ to 3-Stone Engagement RingHarlow’s partner, NBA player Kyle Kuzma, worked with Vobara to design the ring, which features oval and pear-shaped diamonds.
MajorsFeb 27, 2025
Winona Ryder, Iman Star in New Pandora CampaignThe Danish jeweler released the next chapter of its “Be Love” campaign, which celebrates love in all its forms.
SourcingFeb 27, 2025
Gemfields Holds Mini Auction for Higher-Quality EmeraldsThe 13 lots on offer were comprised of material that previously went unsold at the miner’s November auction.
