Movado Group, Inc. Announces First Quarter Fiscal 2024 Results
~ Net Sales of
~ Operating Income of
~ EPS of
~ Board Approves Quarterly Dividend of
Fiscal 2024 First Quarter Highlights (See attached table for GAAP and Non-GAAP measures)
-
Delivered net sales of
versus$144.9 million in the prior year period;$163.4 million -
Generated gross margin of
56.6% as compared to59.2% in the first quarter of fiscal 2023; -
Generated operating income of
as compared to$10.9 million in the prior year period; Adjusted operating income of$25.3 million as compared to$11.6 million ;$26.1 million -
Achieved diluted earnings per share of
as compared to$0.40 in the prior year period; Adjusted diluted earnings per share of$0.79 as compared to$0.43 ; and$0.82 -
Ended the quarter with cash of
and no debt.$198.3 million
Efraim Grinberg, Chairman and Chief Executive Officer, stated, “We began the year in line with our expectations amidst a challenging macro environment and following our best-ever first quarter performance last year. Despite this backdrop, our teams continued to execute against our strategic priorities to maximize the power of our brands with exceptional innovation.”
Mr. Grinberg continued, “As we look ahead, we continue to believe we will face a difficult consumer environment in the
Non-GAAP Items (See attached table for GAAP and Non-GAAP measures)
First quarter fiscal 2024 results of operations included the following charge:
-
a
pre-tax charge, or$0.7 million after tax, representing$0.6 million per diluted share, associated with the amortization of acquired intangible assets related to the acquisitions of Olivia Burton and MVMT.$0.03
First quarter fiscal 2023 results of operations included the following charge:
-
pre-tax charge, or$0.8 million after tax, representing$0.6 million per diluted share, associated with the amortization of acquired intangible assets and deferred compensation related to the acquisition of Olivia Burton and MVMT.$0.03
In this press release, reference to “adjusted” results exclude the impact of the above charges from the first quarter of fiscal years 2024 and 2023. Please refer to the attached table of GAAP and Non-GAAP measures for a detailed reconciliation of the Company’s reported results to its adjusted, non-GAAP results.
First Quarter Fiscal 2024 Results
-
Net sales decreased
11.3% (-10.1% on a constant dollar basis) to compared to$144.9 million in the first quarter of fiscal 2023. The decrease in net sales reflected declines in wholesale customers’ brick and mortar stores, online retail and Movado Company Stores due to the challenging macro environment.$163.4 million U.S. net sales decreased15.7% as compared to the first quarter of last year. International net sales decreased8.1% (-6.0% on a constant dollar basis) as compared to the first quarter of last year. -
Gross profit was
, or$82.0 million 56.6% of net sales, compared to , or$96.7 million 59.2% of net sales in the first quarter of fiscal 2023. The decrease in gross margin percentage was primarily the result of the unfavorable changes in channel and product mix and the unfavorable impact of foreign currency exchange rates, partially offset by reduced shipping costs. -
Operating expenses decreased to
in the first quarter of fiscal 2024 from$71.1 million in the first quarter of fiscal 2023. Adjusted operating expenses were$71.4 million compared to$70.4 million in the prior year period. The slight decrease was primarily due to lower marketing expenses and performance-based compensation, mostly offset by higher payroll-related expenses. As a percent of sales, adjusted operating expenses increased to$70.6 million 48.6% of sales from43.2% in the prior year period due to lower sales. -
Operating income was
compared to operating income of$10.9 million in the first quarter of fiscal 2023. Adjusted operating income was$25.3 million for the first quarter of fiscal 2024 and$11.6 million for the prior year period.$26.1 million -
The Company recorded a tax provision of
, as compared to a tax provision of$2.5 million in the first quarter of fiscal 2023. Based upon adjusted pre-tax income, the adjusted tax provision was$6.0 million , or an adjusted tax rate of$2.7 million 21.6% , as compared to an adjusted tax provision of , or an adjusted tax rate of$6.2 million 23.7% , in the first quarter of fiscal 2023. -
Net income for the first quarter of fiscal 2024 was
, or$9.1 million per diluted share, compared to net income of$0.40 , or$18.5 million per diluted share, for the same period in the prior year. Adjusted net income for the fiscal 2024 period was$0.79 , or$9.7 million per diluted share, compared to adjusted net income of$0.43 , or$19.1 million per diluted share, for the first quarter of fiscal 2023.$0.82
Fiscal 2024 Outlook
The Company continues to expect fiscal 2024 net sales to be in a range of approximately
Quarterly Dividend and Share Repurchase Program
The Company also announced that on May 25, 2023, the Board of Directors approved the payment on June 21, 2023 of a cash dividend in the amount of
During the first quarter of fiscal 2024, the Company repurchased approximately 14,000 shares under its share repurchase program. As of April 30, 2023 , the Company had
Conference Call
The Company’s management will host a conference call and audio webcast to discuss its results today, May 25th, at 9:00 a.m. Eastern Time. The conference call may be accessed by dialing (877) 407-0784. Additionally, a live webcast of the call can be accessed at www.movadogroup.com. The webcast will be archived on the Company’s website approximately one hour after the conclusion of the call. Additionally, a telephonic re-play of the call will be available from 12:00 p.m. ET on May 25, 2023 until 11:59 p.m. ET on June 8, 2023 and can be accessed by dialing (844) 512-2921 and entering replay pin number 13738816.
Movado Group, Inc. designs, sources, and distributes MOVADO®, MVMT®, OLIVIA BURTON®, EBEL®, CONCORD®, CALVIN KLEIN®, COACH®, TOMMY HILFIGER®, HUGO BOSS®, and LACOSTE®, watches, and, to a lesser extent jewelry and other accessories, and operates Movado Company Stores in
In this release, the Company presents certain financial measures that are not calculated according to generally accepted accounting principles in
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, whenever possible, to identify these forward-looking statements using words such as “expects,” “anticipates,” “believes,” “targets,” “goals,” “projects,” “intends,” “plans,” “seeks,” “estimates,” “may,” “will,” “should” and variations of such words and similar expressions. Similarly, statements in this press release that describe the Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the Company's actual results, performance or achievements and levels of future dividends to differ materially from those expressed in, or implied by, these statements. These risks and uncertainties may include, but are not limited to general economic and business conditions which may impact disposable income of consumers in
(Tables to follow)
MOVADO GROUP, INC. | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(In thousands, except per share data) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | |||||||||
April 30, | |||||||||
2023 |
2022 |
||||||||
Net sales |
$ |
144,905 |
|
$ |
163,424 |
|
|||
Cost of sales |
|
62,902 |
|
|
66,739 |
|
|||
Gross profit |
|
82,003 |
|
|
96,685 |
|
|||
Total operating expenses |
|
71,104 |
|
|
71,391 |
|
|||
Operating income |
|
10,899 |
|
|
25,294 |
|
|||
Non-operating income/(expense): | |||||||||
Other income, net |
|
1,025 |
|
|
83 |
|
|||
Interest expense |
|
(113 |
) |
|
(112 |
) |
|||
Income before income taxes |
|
11,811 |
|
|
25,265 |
|
|||
Provision for income taxes |
|
2,534 |
|
|
6,011 |
|
|||
Net income |
|
9,277 |
|
|
19,254 |
|
|||
Less: Net income attributable to noncontrolling interests |
|
149 |
|
|
741 |
|
|||
Net income attributable to Movado Group, Inc. | $ |
9,128 |
|
$ |
18,513 |
|
|||
Diluted Income Per Share Information | |||||||||
Net income per share attributable to Movado Group, Inc. | $ |
0.40 |
|
$ |
0.79 |
|
|||
Weighted diluted average shares outstanding |
|
22,672 |
|
|
23,397 |
|
MOVADO GROUP, INC. | |||||||||
GAAP AND NON-GAAP MEASURES | |||||||||
(In thousands, except for percentage data) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | |||||||||
April 30, | % Change | ||||||||
2023 |
2022 |
||||||||
Total net sales, as reported | $ |
144,905 |
$ |
163,424 |
-11.3 |
% |
|||
Total net sales, constant dollar basis | $ |
146,851 |
$ |
163,424 |
-10.1 |
% |
MOVADO GROUP, INC. | |||||||||||||||||||||||||
GAAP AND NON-GAAP MEASURES | |||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Net Sales | Gross Profit | Total Operating Expenses | Operating Income | Pre-tax Income | Provision for Income Taxes | Net Income Attributable to Movado Group, Inc. | Diluted EPS | ||||||||||||||||||
Three Months Ended April 30, 2023 | |||||||||||||||||||||||||
As Reported (GAAP) | $ |
144,905 |
$ |
82,003 |
$ |
71,104 |
|
$ |
10,899 |
$ |
11,811 |
$ |
2,534 |
$ |
9,128 |
$ |
0.40 |
||||||||
Olivia Burton and MVMT Costs (1) |
|
- |
|
- |
|
(707 |
) |
|
707 |
|
707 |
|
170 |
|
537 |
|
0.03 |
||||||||
Adjusted Results (Non-GAAP) | $ |
144,905 |
$ |
82,003 |
$ |
70,397 |
|
$ |
11,606 |
$ |
12,518 |
$ |
2,704 |
$ |
9,665 |
$ |
0.43 |
||||||||
Three Months Ended April 30, 2022 | |||||||||||||||||||||||||
As Reported (GAAP) | $ |
163,424 |
$ |
96,685 |
$ |
71,391 |
|
$ |
25,294 |
$ |
25,265 |
$ |
6,011 |
$ |
18,513 |
$ |
0.79 |
||||||||
Olivia Burton and MVMT Costs (1) |
|
- |
|
- |
|
(769 |
) |
|
769 |
|
769 |
|
151 |
|
618 |
|
0.03 |
||||||||
Adjusted Results (Non-GAAP) | $ |
163,424 |
$ |
96,685 |
$ |
70,622 |
|
$ |
26,063 |
$ |
26,034 |
$ |
6,162 |
$ |
19,131 |
$ |
0.82 |
||||||||
(1) Related to the amortization of acquired intangible assets for Olivia Burton and MVMT and MVMT's deferred compensation, where applicable. |
MOVADO GROUP, INC. | ||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||
(In thousands) | ||||||||||||
(Unaudited) | ||||||||||||
April 30, | January 31, | April 30, | ||||||||||
2023 |
2023 |
2022 |
||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ |
198,257 |
$ |
251,584 |
$ |
225,256 |
||||||
Trade receivables, net |
|
94,037 |
|
94,282 |
|
92,744 |
||||||
Inventories |
|
195,235 |
|
186,203 |
|
180,003 |
||||||
Other current assets |
|
25,804 |
|
24,212 |
|
23,558 |
||||||
Income taxes receivable |
|
12,057 |
|
10,908 |
|
3,421 |
||||||
Total current assets |
|
525,390 |
|
567,189 |
|
524,982 |
||||||
Property, plant and equipment, net |
|
19,075 |
|
18,699 |
|
18,434 |
||||||
Operating lease right-of-use assets |
|
76,194 |
|
80,897 |
|
79,717 |
||||||
Deferred and non-current income taxes |
|
45,049 |
|
44,490 |
|
42,854 |
||||||
Other intangibles, net |
|
8,996 |
|
9,642 |
|
11,990 |
||||||
Other non-current assets |
|
66,792 |
|
66,788 |
|
62,007 |
||||||
Total assets | $ |
741,496 |
$ |
787,705 |
$ |
739,984 |
||||||
LIABILITIES AND EQUITY | ||||||||||||
Accounts payable | $ |
24,443 |
$ |
32,085 |
$ |
44,140 |
||||||
Accrued liabilities |
|
48,858 |
|
46,720 |
|
54,698 |
||||||
Accrued payroll and benefits |
|
7,597 |
|
17,343 |
|
7,822 |
||||||
Current operating lease liabilities |
|
17,558 |
|
17,681 |
|
16,588 |
||||||
Income taxes payable |
|
17,557 |
|
28,591 |
|
15,141 |
||||||
Total current liabilities |
|
116,013 |
|
142,420 |
|
138,389 |
||||||
Deferred and non-current income taxes payable |
|
14,540 |
|
15,163 |
|
19,385 |
||||||
Non-current operating lease liabilities |
|
66,743 |
|
70,910 |
|
70,440 |
||||||
Other non-current liabilities |
|
49,287 |
|
48,668 |
|
47,301 |
||||||
Redeemable noncontrolling interest |
|
- |
|
- |
|
2,251 |
||||||
Shareholders' equity |
|
491,971 |
|
507,606 |
|
459,650 |
||||||
Noncontrolling interest |
|
2,942 |
|
2,938 |
|
2,568 |
||||||
Total equity |
|
494,913 |
|
510,544 |
|
462,218 |
||||||
Total liabilities, redeemable noncontrolling interest and equity | $ |
741,496 |
$ |
787,705 |
$ |
739,984 |
MOVADO GROUP, INC. | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
Three Months Ended |
||||||
April 30, |
||||||
2023 |
2022 |
|||||
Cash flows from operating activities: | ||||||
Net income | $ 9,277 |
$ 19,254 |
||||
Depreciation and amortization | 2,557 |
2,932 |
||||
Other non-cash adjustments | 1,917 |
1,239 |
||||
Changes in working capital | (36,022) |
(43,676) |
||||
Changes in non-current assets and liabilities | 774 |
(501) |
||||
Net cash used in operating activities | (21,497) |
(20,752) |
||||
Cash flows from investing activities: | ||||||
Capital expenditures | (2,257) |
(1,381) |
||||
Long-term investments | (600) |
(1,850) |
||||
Trademarks and other intangibles | (26) |
(22) |
||||
Net cash used in investing activities | (2,883) |
(3,253) |
||||
Cash flows from financing activities: | ||||||
Dividends paid | (29,901) |
(7,940) |
||||
Stock repurchase | (381) |
(14,439) |
||||
Stock awards and options exercised and other changes | - |
(405) |
||||
Other | - |
(85) |
||||
Net cash used in financing activities | (30,282) |
(22,869) |
||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 1,349 |
(5,026) |
||||
Net change in cash, cash equivalents, and restricted cash | (53,313) |
(51,900) |
||||
Cash, cash equivalents, and restricted cash at beginning of period | 252,179 |
277,716 |
||||
Cash, cash equivalents, and restricted cash at end of period | $ 198,866 |
$ 225,816 |
||||
Reconciliation of cash, cash equivalents, and restricted cash: | ||||||
Cash and cash equivalents | $ 198,257 |
$ 225,256 |
||||
Restricted cash included in other non-current assets | 609 |
560 |
||||
Cash, cash equivalents, and restricted cash | $ 198,866 |
$ 225,816 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230525005290/en/
ICR, Inc.
Rachel Schacter/Allison Malkin
203-682-8200
Source: Movado Group, Inc.