Movado meets second quarter expectations following Olivia Burton acquisition
On Tuesday, Movado announced its second quarter and six months results both ended on July 31, 2017. These results are the first to be released following the watch company's acquisition of JLB Brands, owner of UK watch and jewelry brand Olivia Burton, for £60 million.
Second quarter net sales increased slightly by 0.5% to $128.8 million. Gross profit was $66.1 million, or 51.3% of sales, compared to $70.3 million, or 54.9% of sales, in the previous second quarter, and adjusted gross profit was $66.4 million, or 51.6% of sales, excluding $0.3 million of amortization of acquisition, accounting adjustments related to the Olivia Burton brand.
Net income for the quarter was $5.5 million, or $0.24 per diluted share, versus net income of $6.3 million, or $0.27 per diluted share, in the prior year.
“We are pleased to report second quarter results, in-line with our internal expectations, reflecting progress on our strategic growth and cost savings initiatives,” said Chairman and CEO Efraim Grinberg.
“Despite a challenging U.S. retail environment, our global team’s strong execution of our strategy and our increasing presence around the world led to growth in net sales with particular strength in Latin America, Europe and Asia. We are pleased to have added Olivia Burton to our family of brands in the quarter, which we believe is a perfect complement to our portfolio given its fast growth and distinctive brand identity, and have seen initial success with the integration as the brand continues to resonate with its core millennial customer.”
For the first half of the year, Movado reported a 5.8% decrease in net sales to $228.0 million from $242.1 million, a decrease in gross profit to $115.3 million, or 50.5% of sales, compared to $131.6 million, or 54.3% of sales, in the prior year, and net income was $1.3 million, or $0.06 per diluted share, versus net income of $9.6 million, or $0.41 per diluted share, in the prior year’s first six months.
Movado also updated its fiscal 2018 outlook to reflect its acquisition of Olivia Burton, and now anticipates that net sales will be in the range of $530.0 million and $545.0 million, and net income will be between $35.5 million and $38.8 million, or $1.50 to $1.65 per diluted share.
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