MOVAA Movado Group Inc (PK)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): May 30, 2024

 

MOVADO GROUP, INC.

(Exact name of registrant as specified in its charter)

 

New York	1-16497	13-2595932
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

650 FROM ROAD, SUITE 375 PARAMUS, NJ 07652-3556

(Address of principal executive offices) (Zip Code)

(201) 267-8000

(Registrant’s Telephone Number, Including Area Code)

NOT APPLICABLE

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		MOV		New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On May 30, 2024, Movado Group, Inc. (the “Company”) issued a press release announcing first quarter results for the period ended April 30, 2024. The press release is attached hereto as Exhibit 99.1.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press Release issued May 30, 2024 announcing first quarter fiscal 2025 results for the period ended April 30, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: May 30, 2024

 

	MOVADO GROUP, INC.
	By:	/s/ Mitchell Sussis
	Name:	Mitchell Sussis
	Title:	Senior Vice President, General Counsel and Secretary

 

 

 

EXHIBIT 99.1

 

CONTACT:		ICR, Inc.
		Cody McAlester/Allison Malkin
		203-682-8200

 

 

MOVADO GROUP, INC. ANNOUNCES FIRST QUARTER
FISCAL 2025 RESULTS

 

~ Net Sales of $136.7 million ~

~ Operating Income of $3.3 million ~

~ EPS of $0.13 ~

~ Board Approves Quarterly Dividend of $0.35 Per Share ~

 

Paramus, NJ – May 30, 2024 -- Movado Group, Inc. (NYSE: MOV) today announced first quarter fiscal 2025 results for the period ended April 30, 2024.

 

Fiscal 2025 First Quarter Highlights

·

Delivered net sales of $136.7 million vs. $144.9 million in the prior year period;

·

Generated gross margin of 55.3% as compared to 56.6% in the first quarter of fiscal 2024;

·

Generated operating income of $3.3 million as compared to $10.9 million in the prior year period;

·

Achieved diluted earnings per share of $0.13 as compared to $0.40 in the prior year period; and

·

Ended the quarter with cash and cash equivalents of $225.4 million and no debt.

 

Efraim Grinberg, Chairman and Chief Executive Officer, stated, “We are pleased with our first quarter results, which are in line with our expectations and reflect the successful execution by our team in a retail environment that continues to be challenging. During the quarter, we drove positive momentum with powerful new product innovation led by the performance of our new Movado Bold Quest and strong double-digit growth at Movado.com, which accelerated with our spring television campaign. As planned, we will begin to ramp up our marketing investments during the second quarter to support our strategic growth opportunities, including an exciting new Movado campaign that will launch in the fall.”

 

Mr. Grinberg continued, “We remain committed to executing our growth strategy, with our strong financial position allowing us to invest in targeted areas. We expect our amplified marketing messaging to grow brand awareness and deliver a return to sales growth in the second half of the year.”

 

First Quarter Fiscal 2025 Results

·

Net sales decreased 5.7% to $136.7 million, or decreased 6.1% on a constant dollar basis, compared to $144.9 million in the first quarter of fiscal 2024. The decrease in net sales reflected declines in wholesale customers’ brick and mortar stores and Movado Company Stores. U.S. net sales decreased 6.2% as compared to the first quarter of last year. International net sales decreased 5.4% (a decrease of 6.1% on a constant dollar basis) as compared to the first quarter of last year.

·

Gross profit was $75.5 million, or 55.3% of net sales, compared to $82.0 million, or 56.6% of net sales in the first quarter of fiscal 2024. The decrease in gross margin percentage was primarily the result of unfavorable changes in channel and product mix, along with the decreased leverage of certain fixed costs as a result of lower sales.

·

Operating expenses were $72.2 million in the first quarter of fiscal 2025 compared to $71.1 million in the first quarter of fiscal 2024, reflecting higher payroll-related expenses. As a percent of sales, operating expenses increased to 52.8% of sales from 49.1% in the prior year period primarily due to lower sales.

·

Operating income was $3.3 million compared to $10.9 million in the first quarter of fiscal 2024.

·

The Company recorded a tax provision of $2.3 million, or a tax rate of 42.9%, in the first quarter of fiscal 2025, as compared to a tax provision of $2.5 million, or a tax rate of 21.5%, in the first quarter of fiscal 2024.

·

Net income for the first quarter of fiscal 2025 was $2.9 million, or $0.13 per diluted share, compared to net income of $9.1 million, or $0.40 per diluted share, in the first quarter of fiscal 2024.

 

Fiscal 2025 Outlook

The Company continues to expect fiscal 2025 net sales to be in a range of approximately $700 million to $710 million, gross profit of approximately 55% of net sales, and operating income in a range of approximately $32 million to $35 million. Assuming no changes to current tax regulations, the Company anticipates an effective tax rate of approximately 22% for the fiscal year and earnings in a range of approximately $1.20 to $1.30 per diluted share. This outlook does not contemplate further deterioration due to the impact of economic uncertainty and assumes no further significant fluctuations from prevailing foreign currency exchange rates.

 

Quarterly Dividend and Share Repurchase Program

The Company also announced that on May 30, 2024, the Board of Directors approved the payment on June 26, 2024 of a cash dividend in the amount of $0.35 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 June 12, 2024.

 

During the first quarter of fiscal 2025, the Company repurchased approximately 39,000 shares under its November 23, 2021 share repurchase program. As of April 30, 2024, the Company had $16.8 million remaining available under the share repurchase program.

 

Conference Call

The Company’s management will host a conference call and audio webcast to discuss its results today, May 30, 2024 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 replay of the call will be available at 1:00 p.m. ET on May 30, 2024 until 11:59 p.m. ET on June 13, 2024 and can be accessed by dialing (844) 512-2921 and entering replay number 13746677.

 

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 the United States and Canada.

 

 

 

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 the United States and the other significant markets (including Europe) where the Company’s products are sold, uncertainty regarding such economic and business conditions, including inflation, elevated interest rates, increased commodity prices and tightness in the labor market, trends in consumer debt levels and bad debt write-offs, general uncertainty related to geopolitical concerns, the impact of international hostilities, including the Russian invasion of Ukraine and war in the Middle East, on global markets, economies and consumer spending, on energy and shipping costs, and on the Company’s supply chain and suppliers, supply disruptions, delivery delays and increased shipping costs, defaults on or downgrades of sovereign debt and the impact of any of those events on consumer spending, evolving stakeholder expectations and emerging complex laws on environmental, social, and governance matters, changes in consumer preferences and popularity of particular designs, new product development and introduction, decrease in mall traffic and increase in e-commerce, the ability of the Company to successfully implement its business strategies, competitive products and pricing, including price increases to offset increased costs, the impact of “smart” watches and other wearable tech products on the traditional watch market, seasonality, availability of alternative sources of supply in the case of the loss of any significant supplier or any supplier’s inability to fulfill the Company’s orders, the loss of or curtailed sales to significant customers, the Company’s dependence on key employees and officers, the ability to successfully integrate the operations of acquired businesses without disruption to other business activities, the possible impairment of acquired intangible assets, risks associated with the Company’s minority investments in early-stage growth companies and venture capital funds that invest in such companies, the continuation of the Company’s major warehouse and distribution centers, the continuation of licensing arrangements with third parties, losses possible from pending or future litigation and administrative proceedings, the ability to secure and protect trademarks, patents and other intellectual property rights, the ability to lease new stores on suitable terms in desired markets and to complete construction on a timely basis, the ability of the Company to successfully manage its expenses on a continuing basis, information systems failure or breaches of network security, complex and quickly-evolving regulations regarding privacy and data protection, the continued availability to the Company of financing and credit on favorable terms, business disruptions, and general risks associated with doing business internationally, including, without limitation, import duties, tariffs (including retaliatory tariffs), quotas, political and economic stability, changes

to existing laws or regulations, and impacts of currency exchange rate fluctuations and the success of hedging strategies related thereto, and the other factors discussed in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time. The Company assumes no duty to update its forward looking statements and this release shall not be construed to indicate the assumption by the Company of any duty to update its outlook in the future.

 

 

(Tables to follow)

 

 

 

 

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended
		April 30,
			2024				2023
Net sales		$	136,669			$	144,905
Cost of sales			61,156				62,902
Gross profit			75,513				82,003
Total operating expenses			72,202				71,104
Operating income			3,311				10,899
Non-operating income/(expense):
Other income, net			2,172				1,025
Interest expense			(118	)			(113	)
Income before income taxes			5,365				11,811
Provision for income taxes			2,302				2,534
Net income			3,063				9,277
Less: Net income attributable to noncontrolling interests			172				149
Net income attributable to Movado Group, Inc.		$	2,891			$	9,128
Diluted Income Per Share Information
Net income per share attributable to Movado Group, Inc.		$	0.13			$	0.40
Weighted diluted average shares outstanding			22,673				22,672

 

 

MOVADO GROUP, INC.

GAAP AND NON-GAAP MEASURES

(In thousands, except for percentage data)

(Unaudited)

 

		Three Months Ended
		April 30,								% Change
			2024				2023
Total net sales, as reported		$	136,669			$	144,905				-5.7	%
Total net sales, constant dollar basis		$	136,047			$	144,905				-6.1	%

 

 

 

 

MOVADO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

		April 30,				January 31,				April 30,
		2024				2024				2023
ASSETS
Cash and cash equivalents		$	225,372			$	262,059			$	198,257
Trade receivables, net			101,722				104,472				94,037
Inventories			159,618				148,031				195,235
Other current assets			22,258				17,962				25,804
Income taxes receivable			8,336				11,354				12,057
Total current assets			517,306				543,878				525,390
Property, plant and equipment, net			19,037				19,436				19,075
Operating lease right-of-use assets			89,155				82,661				76,194
Deferred and non-current income taxes			43,280				43,016				45,049
Other intangibles, net			6,935				7,493				8,996
Other non-current assets			75,702				72,598				66,792
Total assets		$	751,415			$	769,082			$	741,496
LIABILITIES AND EQUITY
Accounts payable		$	32,999			$	32,775			$	24,443
Accrued liabilities			41,976				38,695				48,858
Accrued payroll and benefits			7,340				7,591				7,597
Current operating lease liabilities			18,192				15,696				17,558
Income taxes payable			6,459				18,318				17,557
Total current liabilities			106,966				113,075				116,013
Deferred and non-current income taxes payable			8,143				8,234				14,540
Non-current operating lease liabilities			79,749				76,396				66,743
Other non-current liabilities			52,877				52,420				49,287
Shareholders' equity			501,372				516,798				491,971
Noncontrolling interest			2,308				2,159				2,942
Total equity			503,680				518,957				494,913
Total liabilities and equity		$	751,415			$	769,082			$	741,496

 

 

 

 

MOVADO GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

		Three Months Ended
		April 30,
			2024				2023
Cash flows from operating activities:
Net income		$	3,063			$	9,277
Depreciation and amortization			2,288				2,557
Other non-cash adjustments			1,239				1,917
Changes in working capital			(24,746	)			(36,022	)
Changes in non-current assets and liabilities			82				774
Net cash used in operating activities			(18,074	)			(21,497	)
Cash flows from investing activities:
Capital expenditures			(1,624	)			(2,257	)
Long-term investments			(3,123	)			(600	)
Trademarks and other intangibles			(49	)			(26	)
Net cash used in investing activities			(4,796	)			(2,883	)
Cash flows from financing activities:
Dividends paid			(7,773	)			(29,901	)
Stock repurchases			(1,086	)			(381	)
Stock awards and options exercised and other changes			(1,058	)			—
Net cash used in financing activities			(9,917	)			(30,282	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(3,948	)			1,349
Net change in cash, cash equivalents, and restricted cash			(36,735	)			(53,313	)
Cash, cash equivalents, and restricted cash at beginning of period			262,814				252,179
Cash, cash equivalents, and restricted cash at end of period		$	226,079			$	198,866
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents		$	225,372			$	198,257
Restricted cash included in other non-current assets			707				609
Cash, cash equivalents, and restricted cash		$	226,079			$	198,866

 

 

 

v3.24.1.1.u2

Cover	May 30, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 30, 2024
Entity File Number	1-16497
Entity Registrant Name	MOVADO GROUP, INC.
Entity Central Index Key	0000072573
Entity Tax Identification Number	13-2595932
Entity Incorporation, State or Country Code	NY
Entity Address, Address Line One	650 FROM ROAD
Entity Address, Address Line Two	SUITE 375
Entity Address, City or Town	PARAMUS
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07652-3556
City Area Code	201
Local Phone Number	267-8000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	MOV
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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