IDEX Online Research: Movado International Sales Strong
June 29, 06
Echoing trends reported by many other luxury retailers, Movado Group, the watch producer, marketer, and retailer, reported that its international sales were notably stronger than its
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The company also cited strong sales in its licensed brand watches. Fueled by strong demand in international markets, Movado’s Tommy Hilfiger watch brand generated double digit sales gains. The launch of a complete new lineup of the Hugo Boss brand watch line drove sales in the first quarter; the roll-out will continue into the second quarter in
Ebel, one of the company’s premier luxury brands, also reported double digit sales gains as a result of the introduction of the
Movado’s management cited excellent response from global watch buyers at the
Movado’s Retail Stores’ Same-Store Sales Above Average
Total sales in Movado’s 27 Boutique stores rose by 12 percent, driven by a moderate 4.5 percent same-store sales gain and three new units. Sales in the Movado Outlet division, with 28 stores, posed a modestly strong 6.5 percent same-store sales gain. This is in sharp contrast to Tiffany & Co. which posted a same-store sales decline of 1 percent; Movado Boutiques, like Tiffany, target an up-market consumer. Further, mass market jewelers such as Zale and Kay, posted same-store sales gains in the 2-4 percent range in the quarter.
Margins Rise
Movado’s gross margin rose to 61percent of sales in the first quarter, 80 basis points higher than last year. The higher gross margin reflected two positive trends: 1) new watch introductions carry a higher gross margin; and 2) sales leverage from the Movado Boutiques helped boost the company’s aggregate gross margin.
Further, the company’s pretax margin rose to 3.5 percent of sales from last year’s 1.5 percent of sales in the first quarter ended April 2006.
Strong Sales Forecast
Movado’s management continues to predict that total corporate revenues will rise between 9 percent and 11 percent during 2006, driven by new introductions and increased sales per customer. The company appears to be selectively exiting doors in an effort to bring order and logic to its distribution.
The company revealed that its LaCoste watch collection, which will roll out in the spring of 2007, will target watch retail price points in the $100 to $500 range.
Juicy Couture watches will be introduced this fall.