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Movado Grp Inc has a market cap of $524.4 million; its shares were traded at around $27.3 with a P/E ratio of 26.1 and P/S ratio of 1.1. The dividend yield of Movado Grp Inc stocks is 0.7%.
Highlight of Business Operations:Net sales for the three months ended April 30, 2012 in the United States location of the wholesale segment were $40.8 million, above the prior year period by $5.4 million or 15.2%, driven by sales increases in both the licensed and accessible luxury brand categories. Net sales in the accessible luxury category were above prior year by $3.4 million, or 16.1%, which in the current year period included a $1.8 million sales reserve for anticipated returns of older ESQ by Movado watch styles pursuant to the Company’s new strategy to minimize non-go forward inventory and maximize go-forward inventory at the retail level. The increase in sales in the accessible luxury category was primarily due to strong sell-through in the Company’s distribution channels, higher sales of the Movado BOLD collection and continued focus and investment in marketing and advertising. Net sales in the licensed brand category were above the prior year period by $2.6 million, or 23.1%, primarily due to increased demand driven by innovative product designs and key price points that are resonating well with customers. These sales increases were partially offset by lower net sales in the luxury category of $0.2 million when compared to the prior year period.
Net sales for the three months ended April 30, 2012 in the International location of the wholesale segment were $52.7 million, above the prior year period by $8.1 million or 18.2%, driven by sales increases in the licensed brand category, partially offset by a sales decrease in the luxury and accessible luxury brand categories. Net sales in the licensed brand category were above the prior year period by $9.5 million, or 32.8%, primarily due to continued growth in existing markets resulting from higher demand, as well as new market expansion. Net sales in the luxury category were below the prior year period by $0.9 million, or 15.5% primarily due to the category being less promotional when compared to the prior year period. Net sales in the accessible luxury category were below the prior year period by $0.6 million, or 8.3%, primarily driven by lower sales in South America and Canada. For the three months ended April 30, 2012, fluctuations in foreign currency exchange rates unfavorably impacted net sales by $1.1 million when compared to the prior year period.
Selling, General and Administrative (“SG&A”). SG&A expenses for the three months ended April 30, 2012 were $50.5 million, representing an increase above the prior year period of $3.5 million or 7.4%. The increase in SG&A expense included higher compensation and benefit expense of $2.8 million during the current year period resulting from salary increases, certain employee benefits and performance-based compensation. Additionally, higher marketing expense of $1.1 million was recorded during the current year period resulting from the Company’s decision to continue investment in this area to drive sales growth. The effect of fluctuations in foreign currency exchange rates favorably impacted SG&A expenses for the three months ended April 30, 2012 by $0.4 million, which was the result of lower transactional losses recorded year-over-year related to foreign denominated assets held in strengthening currencies.
Wholesale Operating Income. Operating income of $7.1 million and $1.0 million was recorded in the wholesale segment for the three months ended April 30, 2012 and 2011, respectively. The $6.1 million increase in operating income was the net result of an increase in gross profit of $9.7 million, partially offset by an increase in SG&A expenses of $3.6 million. The increase in gross profit of $9.7 million was primarily due to higher net sales and, to a lesser extent, the higher gross margin percentage achieved. The increase in SG&A expense included higher compensation and benefit expense of $2.8 million during the current year period resulting from salary increases, certain employee benefits and performance-based compensation. Additionally, higher marketing expense of $1.1 million was recorded during the current year period resulting from the Company’s decision to continue investment in this area to drive sales growth. The effect of fluctuations in foreign currency exchange rates favorably impacted SG&A expenses for the three months ended April 30, 2012 by $0.4 million, which was the result of lower transactional losses recorded year-over-year related to foreign denominated assets held in strengthening currencies.
Retail Operating Income. Operating income of $1.4 million and $0.6 million was recorded in the retail segment for the three months ended April 30, 2012 and 2011, respectively. The $0.8 million increase in operating income was the net result of an increase in gross profit of $0.7 million and a slight decrease in SG&A expenses. The increase in gross profit of $0.7 million was primarily attributed to higher gross margin percentage achieved and, to a lesser extent, an increase in sales volume year-over-year.
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