Movado Group Reports Decline in Net Sales and Profitability for Q2 and H1 2024

Movado Group, Inc. reported its financial results for the three and six months ended July 31, 2024, revealing a decline in both net sales and profitability compared to the same periods in 2023. For the three months, net sales totaled $159.3 million, a decrease of $1.1 million or 0.7% from $160.4 million in the prior year. The six-month figures showed net sales of $296.0 million, down $9.3 million or 3.1% from $305.3 million in the previous year. The decline in sales was attributed to lower performance in the Watch and Accessory Brands segment, which saw a decrease in both owned and licensed brand sales.

Gross profit for the three months ended July 31, 2024, was $86.4 million, representing 54.2% of net sales, down from $89.3 million (55.7% of net sales) in the prior year. For the six months, gross profit was $161.9 million, or 54.7% of net sales, compared to $171.3 million (56.1%) in the previous year. The decrease in gross profit was primarily due to lower net sales and a decline in gross margin percentage.

Operating income for the three months ended July 31, 2024, was $3.0 million, significantly lower than $9.6 million in the same period in 2023. For the six months, operating income fell to $6.3 million from $20.5 million in the prior year. The decline in operating income was driven by increased selling, general, and administrative (SG&A) expenses, which rose by $3.7 million (4.6%) for the three months and $4.8 million (3.2%) for the six months, largely due to higher marketing and payroll-related expenses.

Net income attributable to Movado Group, Inc. for the three months ended July 31, 2024, was $3.7 million, down from $8.0 million in the prior year. For the six months, net income decreased to $6.6 million from $17.2 million. Basic income per share for the three months was $0.17, compared to $0.36 in 2023, while for the six months, it was $0.30, down from $0.77.

As of July 31, 2024, the company reported total assets of $759.2 million, an increase from $749.7 million a year earlier. Total liabilities stood at $252.6 million, with total shareholders' equity at $506.6 million. The company declared quarterly cash dividends of $0.35 per share during the reporting period, totaling $7.8 million, consistent with the previous year’s dividend payments.

Movado Group continues to navigate challenges in the market, including fluctuations in foreign currency exchange rates, which negatively impacted sales. The company remains focused on its strategic initiatives, including a share repurchase program, with $16.8 million remaining available for purchases as of July 31, 2024.