U.S. watchmaker Movado Group Inc. reported a reduction in its earnings for the first quarter, despite double-digit growth in global revenues.
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The New Jersey-based Movado reported earnings of $3.9 million, or $0.17 per diluted share during the first quarter down from $8.1 million, or $0.35 per diluted share in the prior-year period.
Net sales surged 15.3% to $146.5 million during the quarter, up from $127.1 million. On a constant currency basis, sales increased 18.9%.
However, earnings were hit by an increase in operating costs, reaching $73.9 million for the three months ending April 30, 2019.
Movado cited higher marketing expenses with the addition of MVMT and operating expenses to support its overall sales growth across, as well as a new joint venture in Spain.
“We had a strong start to the year, reporting double digit growth in sales and significant expansion in gross margin driven by the strength of our innovation and heightened global demand for our compelling portfolio of brands,” said Efraim Grinberg, Chairman and Chief Executive Officer.
“During the quarter, we accelerated our growth in e-commerce driven by our Digital Center of Excellence and increased investment in marketing activities to capitalize on the significant growth that lies ahead for our portfolio, including MVMT and Olivia Burton,” he continued.
The company reiterated its outlook for fiscal 2020. Movado said net sales are expected to be in a range of $750 million to $765 million and net income in fiscal 2020 to be in a range of $64.0 million to $66.4 million, or $2.70 to $2.80 per diluted share.
Located in Paramus, Movado Group designs and distributes Movado, MVMT, Olivia Burton, Ebel, Concord, Coach, Tommy Hilfiger, Hugo Boss, Lacoste, Scuderia Ferrari, Rebecca Minkoff and Uri Minkoff watches worldwide, and operates Movado company stores in the United States and Canada.