Movado Group, Inc. (MOV) has reported a 33.67 percent plunge in profit for the quarter ended Jan. 31, 2017. The company has earned $5.23 million, or $0.22 a share in the quarter, compared with $7.89 million, or $0.34 a share for the same period last year.
Revenue during the quarter dropped 8.71 percent to $130.78 million from $143.26 million in the previous year period. Gross margin for the quarter contracted 314 basis points over the previous year period to 49.46 percent. Total expenses were 94.31 percent of quarterly revenues, up from 91.94 percent for the same period last year. That has resulted in a contraction of 237 basis points in operating margin to 5.69 percent.
Operating income for the quarter was $7.44 million, compared with $11.54 million in the previous year period.
Efraim Grinberg, chairman and chief executive officer, stated, "In a challenging holiday selling season, we were pleased to see our brands outperform the overall watch category in key markets around the world and to have delivered on our annual revenue and earnings targets. Our global teams executed well against our strategies that are centered on delivering innovative and beautifully designed watches. Notably, our Ultra Slim collections across our portfolio and the relaunch of our iconic Movado Esperanza during the holidays resonated well with consumers. We also managed our expenses very well during the quarter while continuing to invest in our global brand building initiatives."
For fiscal year 2018, Movado Group, Inc. projects revenue to be in the range of $515 million to $530 million. It expects net income to be in the range of $33 million to $36.30 million. It projects operating income to be in the range of $50 million to $55 million. It forecasts diluted earnings per share to be in the range of $1.40 to $1.55 for the same period.
Operating cash flow declines
Movado Group, Inc. has generated cash of $58.42 million from operating activities during the year, down 21.68 percent or $16.17 million, when compared with the last year.
The company has spent $7.56 million cash to meet investing activities during the year as against cash outgo of $9.16 million in the last year.
The company has spent $27.68 million cash to carry out financing activities during the year as against cash outgo of $23.72 million in the last year period.
Cash and cash equivalents stood at $256.28 million as on Jan. 31, 2017, up 12.31 percent or $28.09 million from $228.19 million on Jan. 31, 2016.
Debt comes down
Movado Group, Inc. has recorded a decline in total debt over the last one year. It stood at $30 million as on Jan. 31, 2017, down 25 percent or $10 million from $40 million on Jan. 31, 2016. Interest coverage ratio deteriorated to 17.51 for the quarter from 30.22 for the same period last year.
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