(Source: The Record - Hackensack, New Jersey)
By Joan Verdon, The Record, Hackensack, N.J.
Sep. 4--Paramus-based watchmaker Movado Group Inc. posted a surprise second-quarter profit Thursday, and Wall Street applauded by boosting the company's stock by as much as 16 percent in midday trading. The shares closed Thursday at $12.09, up 5.4 percent for the day.
The company reported net earnings of 2 cents a share, down from 32 cents a year ago. However, those results were better than analysts' forecasts of a loss of 24 cents for the quarter.
In a conference call with investors, Movado President and Chief Executive Officer Efraim Grinberg credited the company's cost-cutting measures over the past year with returning the business to profitability earlier than expected. "We are operating as a much more efficient organization and paying close attention to consumers," by offering more lower-priced watches, Grinberg said.
The company cut jobs and reduced marketing expenses as part of a plan to cut spending by $50 million to $60 million a year.
The past year has been rough on jewelry and watch sellers, and Grinberg said Movado is not expecting to see the luxury segment improve until next year. Sales for the quarter met expectations, falling to $89.7 million during the quarter, down 31 percent from $129.7 million in the prior year's second quarter.
The company's adjusted earnings, excluding some one-time charges, were 6 cents a share for the quarter, compared with 39 cents in adjusted earnings a year ago.
The company on Thursday reaffirmed its earnings estimate for the year, saying it expects earnings of 50 cents a share for the year, compared with 9 cents in fiscal 2009. Movado is already in the third-quarter of its fiscal year 2010 because of the reporting calendar it uses.
E-mail: verdon@northjersey.com
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