Movado Group cuts forecast reflecting continued challenging environment

Movado Group’s second quarter net sales decreased by 0.7 percent or 0.3 percent on a constant dollar basis to 159.3 million dollars. The US net sales decreased 0.3 percent and international net sales decreased 0.9 percent or 0.3 percent on a constant dollar basis.

Net sales for the first six months decreased 3.1 percent reported and on a constant dollar basis to 296 million dollars. net sales in the US decreased 3 percent and international net sales decreased 3.1 percent for the period.

Commenting on the trading update, Efraim Grinberg, the company’s chairman and CEO, stated: “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.”

Review of Movado's Q2 and H1 performance

Gross profit for the quarter was 86.4 million dollars or 54.2 percent of net sales, operating income was 3 million dollars and net income was 3.7 million dollars or 16 cents per diluted share.

First half gross profit was 161.9 million dollars or 54.7 percent of net sales, operating income was 6.3 million dollars and net income declined to 6.6 million dollars or 29 cents per diluted share.

Movado Group cuts outlook

Expecting continuing impact of a challenging environment, the company has lowered its outlook and now expects net sales in a range of approximately 665 million dollars to 675 million dollars, with second half sales to be flat to slightly positive as compared to last year.

Gross profit is anticipated to be approximately 54 percent of net sales, operating income in a range of 23 million to 26 million dollars and earnings of 90 cents to 1 dollars per diluted share.

The company also announced a cash dividend in the amount of 35 cents for each share of the company’s outstanding common stock and class A common stock held by shareholders of record as of the close of business on September 16, 2024.