Movado sales rise in Q4 2018, buoyed by growth in UK, France and Germany
Paramus, New Jersey-based watchmaker Movado Group, Inc. reported its fourth quarter and full fiscal year 2018 results on Thursday, announcing a sales increase of 14.1% in Q4 (10.2% in constant currencies), driven by strong performances in its European subsidiaries.
Total sales in the fourth quarter reached $149.2 million, compared to $130.8 million in the prior year period. Operating income also saw a significant rise in the quarter, growing 79.4% to $13.3 million, compared to the $7.4 million reported in Q4 2017.
Although a specific breakdown was not provided, Movado Chairman and CEO Efraim Grinberg pointed out in a release that the quarter’s strong sales were driven by growth in the company’s subsidiaries in the UK, France and Germany, as well as the contribution made by UK watch and jewelry brand Olivia Burton, acquired by Movado in July 2017.
Net loss for the period, however, was $33.9 million compared to net income of $5.2 million in the same period in the previous year. This fall is attributable, in large part, to increased operating expenses in Q4 2018, as well as a higher tax provision, which rose to $47.0 million, from the prior year period’s $1.9 million, due to a provisional tax expense of $45.0 million related to the 2017 US Tax Act.
Grinberg, therefore, was confident about the company’s results, stating, “Our fourth quarter performance continues to demonstrate the power of our brands around the world and the strength of our organization. As we focus on expanding our online presence given an evolving retail landscape, we are encouraged by the progress made in the quarter with our digital initiatives in support of our global portfolio.”
Due to the period’s strong sales, the company’s Board has approved an increase in quarterly dividend to $0.20 Per Share.
Movado’s full year fiscal 2018 net sales increased 2.8% to $568.0 million, compared to net sales of $552.8 million in fiscal 2017, a 2.2% rise in constant currencies.
The company’s operating income fell from $54.0 million in the prior year, to $43.2 million. Total loss for fiscal 2018 came to $15.2 million, compared to a net income of $35.1 million reported for fiscal 2017.
Speaking of the coming year, Grinberg commented, “We are excited about the innovative products we are launching this year and remain focused on executing against our strategic initiatives, including digital, while also investing in our brands ahead of the long-term sustainable growth we see for our business.”
In fiscal 2019, the company expects net sales to be in the range of $605.0 million to $615.0 million and operating income to be between $68.0 million to $71.0 million. Net income is predicted to be approximately $50.5 million to $52.8 million.
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