Earnings

Return to Article

Movado Group Posts $22.8 Million 4Q Loss

The Associated Press

PARAMUS, N.J. (AP) — Movado Group Inc. said Thursday it eliminated its quarterly dividend and posted a fourth-quarter loss because of one-time charges and a tough economy that crimped demand for the company's watches.

For the period ended Jan. 31, the company posted a loss of $22.8 million, or 92 cents, after earnings of $19.6 million, or 72 cents per share, a year ago.

Sales declined 32 percent to $94 million from $138.6 million.

When adjusted to exclude charges for cost-reduction plans and other items, the company recorded a loss of $10.5 million, or 42 cents per share.

"We are operating in the most challenging economic environment that I have seen in my 30 years in the watch industry," said Chief Executive Efraim Grinberg.

For the year, profit dropped to $2.3 million, or 9 cents per share, compared with $60.8 million, or $2.23 per share, a year ago.

Adjusted fiscal 2009 earnings were $14.2 million, or 55 cents per share.

Net sales declined nearly 18 percent to $460.9 million from $559.6 million.

Also, Movado eliminated its quarterly dividend and warned it is not in compliance with one of its financial covenants.

The company expects lower sales through the first half of fiscal 2010, with improvement later in the year as retailers replenish inventory to prepare for the holidays.

Movado expects to be "slightly profitable" in fiscal 2010, excluding unusual items. The company anticipates a loss around $1 per share during the first half of the year, but said gains during the second half of 2010 will help offset this loss.

Shares of the company declined 78 cents, or 9.4 percent, to $7.53 in afternoon trading.