Movado’s Q3 Sales Slide 17%

Paramus, N.J.—Movado Group weathered another tough quarter, recording a double-digit slide in both net sales and net income.

The New Jersey-based watchmaker and distributor reported Tuesday that third quarter net sales declined 17 percent year-over-year to $169.9 million, compared with $205.6 million in the same period last year.

On a constant-exchange-rate basis sales were down 19 percent year-over-year.

Europe, a key market for the company’s brands, and e-commerce were the bright spots, with sales of Movado-brand watches increasing 159 percent on the company’s own digital platform and the websites of its wholesale partners.

Gross profit improved, totaling $92.5 million, or 54.4 percent of net sales, as compared with $110.1 million, or 53.5 percent of net sales in the previous year.

Net income, however, declined, totaling $14.8 million, down from $17.8 million in the same period last year.

Movado’s sales were stronger in the third quarter than they were in the second—when net sales fell 44 percent—with Q3 results exceeding the company’s expectations.

It has been cutting costs amid the economic hardships brought on by the pandemic, announcing in July a restructuring plan that includes employee layoffs and tightly managing operating expenses and inventory levels, which are down 12 percent year-over-year.

Chairman and CEO Efraim Grinberg said in the company’s third quarter earnings release it is “encouraged” to see demand for its watches increasing despite the global economic environment that continues to be impacted by COVID-19.

He noted while there is uncertainty around the duration and trajectory of the second wave of the coronavirus, Movado is well-positioned for the holiday season due to the strength of its brands, focus on innovation and marketing campaigns.

Year-to-date, sales are down 36 percent to $328.1 million.

The company has recorded a net loss of $141.8 million, compared with net income of $39.2 million in the first nine months of the previous year.

Movado is not providing guidance for fiscal year 2021 given the uncertainty brought about by COVID-19.