FinancialsAug 13, 2024
Pandora Raises Guidance Again as Q2 Sales Climb Double DigitsFinancialsSep 06, 2024
Movado Lowers Guidance as Q2 Sales Slip
CEO Efraim Grinberg pointed to a challenging consumer spending environment, particularly in the watch category.
A set of Movado Connect 2.0 watches. The company reported declining sales in its recent second quarter results.
Paramus, N.J.—Movado Group posted declining sales in its second-quarter results, lowering its fiscal guidance for the year ahead as consumer spending on watches remains “difficult.”
“While increased marketing investment coupled with our initiatives to enhance retail performance drove improvement in our sales trend from the first quarter, second quarter sales and earnings were below our expectations due to the challenging consumer spending environment compounded by increased expenses to support future growth,” CEO Efraim Grinberg said.
The company previously announced its plan to increase marketing spend to $25 million, which ramped up in the second quarter.
It recently launched a new Movado campaign called “When I Move You Move,” a nod to the lyrics in Ludacris’ song “Stand Up,” which is featured in the campaign.
The retailer is hoping the new campaign, featuring famous faces like Ludacris, Julianne Moore, Jessica Alba, Tyrese Haliburton, and Christian McCaffrey, will bolster sales.
In the second quarter ending July 31, net sales fell about 1 percent year-over-year (less than 1 percent on a constant dollar basis) to $159.3 million.
Net sales for the first half were down 3 percent to $296 million.
Movado attributed the decrease to mixed sales at brick-and-mortar stores owned by wholesale customers, as well as those operated by Movado, partially offset by an increase in U.S. online retail.
“While we are excited by the initiatives that we have put in place, the consumer spending environment in the watch category continues to be difficult in many markets around the world and we believe this will have an impact on our second half results,” said Grinberg.
On an earnings call Thursday morning, Grinberg noted that its retail partners, especially in the U.S. and Europe, placed orders “cautiously.”
There were some bright spots in the quarter, said Grinberg, which the retailer plans to capitalize on in the second half of the year.
Movado brand sales were up 1 percent, noting significant growth in the direct-to-consumer channel as Movado.com sales rose 21 percent. The rise was partially offset by a 6 percent decline in its wholesale channel.
Grinberg noted the success of its “Movado Bold Quest” collection, which features a design inspired by a vintage Movado watch from the 1970’s.
“Opening at $595, Bold Quest fills more accessible price points that we had previously vacated,” he said.
As for its jewelry offerings, Grinberg noted on the call that “jewelry is actually outperforming watches in our fashion brands and seems to be doing very well.”
“That continues to represent a big opportunity for the company as we grow that business, [which is] particularly strong in markets like Europe and Mexico.”
The Movado brand will refresh its jewelry assortment, beginning early next year, he said.
Related stories will be right here …
“While increased marketing investment coupled with our initiatives to enhance retail performance drove improvement in our sales trend from the first quarter, second quarter sales and earnings were below our expectations due to the challenging consumer spending environment compounded by increased expenses to support future growth,” CEO Efraim Grinberg said.
The company previously announced its plan to increase marketing spend to $25 million, which ramped up in the second quarter.
It recently launched a new Movado campaign called “When I Move You Move,” a nod to the lyrics in Ludacris’ song “Stand Up,” which is featured in the campaign.
The retailer is hoping the new campaign, featuring famous faces like Ludacris, Julianne Moore, Jessica Alba, Tyrese Haliburton, and Christian McCaffrey, will bolster sales.
In the second quarter ending July 31, net sales fell about 1 percent year-over-year (less than 1 percent on a constant dollar basis) to $159.3 million.
Net sales for the first half were down 3 percent to $296 million.
Movado attributed the decrease to mixed sales at brick-and-mortar stores owned by wholesale customers, as well as those operated by Movado, partially offset by an increase in U.S. online retail.
“While we are excited by the initiatives that we have put in place, the consumer spending environment in the watch category continues to be difficult in many markets around the world and we believe this will have an impact on our second half results,” said Grinberg.
On an earnings call Thursday morning, Grinberg noted that its retail partners, especially in the U.S. and Europe, placed orders “cautiously.”
There were some bright spots in the quarter, said Grinberg, which the retailer plans to capitalize on in the second half of the year.
Movado brand sales were up 1 percent, noting significant growth in the direct-to-consumer channel as Movado.com sales rose 21 percent. The rise was partially offset by a 6 percent decline in its wholesale channel.
Grinberg noted the success of its “Movado Bold Quest” collection, which features a design inspired by a vintage Movado watch from the 1970’s.
“Opening at $595, Bold Quest fills more accessible price points that we had previously vacated,” he said.
As for its jewelry offerings, Grinberg noted on the call that “jewelry is actually outperforming watches in our fashion brands and seems to be doing very well.”
“That continues to represent a big opportunity for the company as we grow that business, [which is] particularly strong in markets like Europe and Mexico.”
The Movado brand will refresh its jewelry assortment, beginning early next year, he said.
Looking to the U.S., quarterly sales were down less than 1 percent year-over-year while international sales fell 1 percent (less than 1 percent on a constant dollar basis).
First-half net sales in the U.S. and internationally were down 3 percent year-over-year.
Second-quarter gross profit was $86.4 million, or 54 percent of net sales, compared with $89.3 million, or 56 percent of net sales, in the previous second quarter.
The decrease in gross margin percentage in Q2 was attributed to an “unfavorable” change in channel and product mix.
First-half gross profit was $161.9 million, or 55 percent of net sales, compared with $171.3 million, or 56 percent of net sales, in the previous first half.
The first-half decrease in gross margin percentage was attributed to an “unfavorable” change in channel and product mix as well as decreased leverage of higher fixed costs on lower sales, partially offset by reduced shipping costs.
Net income in Q2 was $3.7 million, down 54 percent compared to net income of $8 million in the second quarter of fiscal 2024.
First-half net income was $6.6 million, down 62 percent compared to net income of $17.2 million in the first six months of last year.
Movado lowered its guidance for the year ahead, citing a challenging environment.
It now expects fiscal 2025 net sales to be between $665 million and $675 million, down from its prior guidance of $700 million and $710 million.
Second-half sales are expected to be flat to slightly positive year-over-year.
Gross profit is expected to be 54 percent of net sales, down from its previous expectation of 55 percent.
Operating income is forecast to be in a range of $23 million to $26 million, as compared to its previous expectation of $32 million to $35 million.
“As we begin to plan for next fiscal year, we are committed to reducing our operating expenses to improve profitability. At the same time, we expect the combination of our upcoming marketing initiatives, along with compelling innovation, to drive excitement for our brands and business,” said Grinberg.
More on Financials
The Latest
CrimeJun 18, 2025
7 Men Indicted in $100M Brinks Jewelry HeistThe heist happened in Lebec, California, in 2022 when a Brinks truck was transporting goods from one show in California to another.
AuctionsJun 18, 2025
Historic ‘Marie-Thérèse Pink’ Diamond Fetches $14M at Christie’sThe 10-carat fancy purple-pink diamond with potential links to Marie Antoinette headlined the white-glove jewelry auction this week.
EditorsJun 18, 2025
Q&A: Caryl Capeci Dives Into Cruise Jewelry ShoppingThe Starboard Cruises SVP discusses who is shopping for jewelry on ships, how much they’re spending, and why brands should get on board.
Brought to you by
Investing in the Next Generation of Bench JewelersThe Seymour & Evelyn Holtzman Bench Scholarship from Jewelers of America returns for a second year.
AuctionsJun 18, 2025
16th-Century ‘Gresham Grasshopper’ Ring Sells for $56KThe historic signet ring exceeded its estimate at Noonans Mayfair’s jewelry auction this week.
Weekly QuizJun 12, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
CollectionsJun 18, 2025
Kirk Kara Celebrates 135 Years With New JewelsTo mark the milestone, the brand is introducing new non-bridal fine jewelry designs for the first time in two decades.
SourcingJun 18, 2025
Gemfields Sells 36-Carat Rough RubyThe gemstone is the third most valuable ruby to come out of the Montepuez mine, Gemfields said.
Brought to you by
Jewelers of America is Headed to Las Vegas for JCK 2025The countdown is on for the JCK Las Vegas Show and JA is pulling out all the stops.
TechnologyJun 18, 2025
Alex Brown Named President of Smithee GroupFounder and longtime CEO Ben Smithee will stay with the agency, transitioning into the role of founding partner and strategic advisor.
EditorsJun 17, 2025
The Best New Jewelry from Couture 2025, Part 1Associate Editor Natalie Francisco shares 20 of her favorite pieces from the jewelry collections that debuted at Couture.
ColumnistsJun 17, 2025
Peter Smith: Is Your Comp Plan a Hiring Hindrance?If you want to attract good salespeople and generate a stream of “sleeping money” for your jewelry store, then you are going to have to pay.
AuctionsJun 17, 2025
Colored Gemstones, Signed Jewels Shine in Sotheby’s High Jewelry SaleThe top lot was a colorless Graff diamond, followed by a Burmese ruby necklace by Marcus & Co.
MajorsJun 17, 2025
Amanda Gizzi Gets a Promotion at JAGizzi, who has been in the industry since 2001, is now Jewelers of America’s senior vice president of corporate affairs.
MajorsJun 17, 2025
Kering Names Automotive Exec as Its New CEOLuca de Meo, a 30-year veteran of the auto industry, will succeed longtime CEO François-Henri Pinault.
EditorsJun 16, 2025
Q&A: Bogolo Joy Kenewendo on Mining, Tariffs, and the Energy of Las VegasFollowing visits to Vegas and New York, Botswana’s minerals minister sat down with Michelle Graff to discuss the state of the diamond market.
IndependentsJun 16, 2025
Greenwich St. Jewelers Launches Commitment Campaign Celebrating LGBTQ+ CouplesThe “Your Love Has the Perfect Ring” campaign showcases the strength of love and need for inclusivity and representation, the jeweler said.
MajorsJun 16, 2025
Ivette Nersesyan-Stephanopoulos Joins Tiffany & Co.The former De Beers executive is the jewelry house’s new director of high jewelry for the Americas.
MajorsJun 16, 2025
Catbird Names WNBA Star Nyara Sabally as Its New Brand AmbassadorThe New York Liberty forward is the first athlete to represent the Brooklyn-based jewelry brand.
CollectionsJun 13, 2025
Piece of the Week: Robinson Pelham’s Pear EarringsTake a bite out of the 14-karat yellow gold “Fruits of Love Pear” earrings featuring peridots, diamond stems, and tsavorite leaves.
Events & AwardsJun 13, 2025
AGA to Host ‘Diamonds From Mine to Market’ Education ConferenceThe one-day virtual event will feature speakers from De Beers, GIA, and Gemworld International.
EditorsJun 12, 2025
15 Questions With Jewelry Photographer Ella SophieThe California-based creative talks jewelry photography in the modern era and tackles FAQs about working with a pro for the first time.
AuctionsJun 12, 2025
Vintage Patek Philippe From the ‘50s Sells for $4M at Sotheby’s Al Capone’s pocket watch also found a buyer, though it went for less than half of what it did at auction four years ago.
Events & AwardsJun 12, 2025
Gabriel Love Foundation Introduces Scholarship Honoring Elias GabrielThe foundation has also expanded its “Stronger Together” initiative with Jewelers for Children.
AuctionsJun 12, 2025
Former De Beers Exec Celine Assimon Joins BonhamsAssimon is the auction house’s new chief commercial officer.
EditorsJun 11, 2025
Q&A: Al Cook on Differentiating Natural Diamonds, Traceability, and TariffsThe De Beers Group CEO discusses the company’s new “beacon” program, the likelihood diamonds will be exempt from tariffs, and “Origin.”
MajorsJun 11, 2025
Pandora Bets on Las Vegas for First North American FlagshipThe Danish jewelry giant hosted its grand opening last weekend, complete with a Pandora pink roulette wheel.
GradingJun 11, 2025
Tiffany Stevens Exits IGI, Lab Appoints New Board LeaderIndustry veteran Anoop Mehta is the new chairman and independent director of the IGI board.
