Movado’s Full-Year Sales Sink 28%

Paramus, N.J.—Movado Group saw sales sink by double digits in fiscal 2021, but the watchmaker has high hopes for the fiscal year ahead as it prepares for the launch of its Calvin Klein line.

Net sales in the fourth quarter were down 7 percent to $178.3 million compared with $191.0 million in the previous year’s fourth quarter.

Gross profit totaled $100.8 million, or 57 percent of net sales, compared with $100.6 million, or 53 percent of net sales, in the same period last year.

Though the COVID-19 situation in the United States is improving, store closures across Europe and in Latin America, particularly in Brazil and Mexico, are a challenge for the company, noted CEO Efraim Grinberg during an earnings call Thursday morning.

As with many retailers, a strong e-commerce performance has carried the company through rough waters.

“Notably, powerful innovation across our brands and actions to accelerate our digital center of excellence fueled strong results for our company-owned and third party e-commerce sites, including robust second-half sales growth at Movado.com,” said Grinberg in a press release announcing the results.

Movado’s e-commerce business more than doubled in the fourth quarter, up 110 percent, which Grinberg attributed to the launch of the Movado SE collection, the growth of its jewelry offerings, and continued demand for Movado Bold watches.

As for its wholesale channels, Movado saw growth in e-commerce and improvement in the overall brick- and-mortar performance.

For the full year, Movado’s net sales were down 28 percent to $506.4 million compared with net sales of $701.0 million in fiscal 2020.

Full-year gross profit was $270.5 million, or 53 percent of net sales, compared with gross profit of $374.9 million, or 54 percent of net sales, in the prior year.

Grinberg said the company’s watch and jewelry offerings are seeing “favorable momentum” and noted the company has plans to capitalize on several growth opportunities this fiscal year.

Movado plans to launch its Calvin Klein watches and jewelry line in January 2022.

The company inked a five-year licensing agreement with Calvin Klein in August 2020 to create a new line of watches and jewelry.

Calvin Klein was looking for a new partnership after ending its 22-year licensing deal with Swatch Group. Movado proved a good fit, as it already partners with owner PVH Corp. to license the Tommy Hilfiger brand.

This spring, Movado will continue the rollout of its SE collection, bolstered by television ads in May and June in time for Mother’s Day, Father’s Day, and graduation season.

Movado noted its jewelry collection performed well in the days leading up to Valentine’s Day.

Its licensed brands, including Coach and Tommy Hilfiger, put on a solid performance, said Grinberg, with sales down less than 2 percent in the fourth quarter.

For the Tommy Hilfiger brand, its Mason for Him and Liberty for Her watches were especially popular while its jewelry collection did well online.

Television ads in France and Germany, two of its biggest markets, bolstered the Hugo Boss brand in Europe. The company has a Hugo Boss jewelry collection in the works.

Lacoste’s iconic collections were top performers and the brand is collaborating on a new collection with Polaroid.

Coach’s new offerings have been well-received, said Movado, while its MVMT brand trimmed down its offerings to improve profitability.

Olivia Burton’s brick-and-mortar sales suffered in its home market of the United Kingdom amid store closings, but its net online sales were up 20 percent in the fourth quarter.

Looking to the year ahead, Movado said it would not provide fiscal 2022 guidance, noting the “dynamic nature of the COVID-19 crisis.”

However, the company said it expects to see first-quarter net sales in the range of $110-$115 million, compared with net sales of $69.7 million in the previous first quarter.

Its board of directors also approved a $25 million share buyback program.