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Jan 31, 2020
Movado Q4 2020 Earnings Report
Movado Group Announced Q4 2020 Results
Key Takeaways
Movado Group reported a decrease in net sales by 4.2% to $191.0 million compared to the fourth quarter of fiscal 2019, with net income decreasing to $3.5 million, or $0.15 per diluted share. The company is discontinuing its quarterly dividend due to COVID-19 uncertainty but maintains a strong cash position.
Net sales decreased by 4.2% to $191.0 million compared to Q4 2019.
Gross profit was $100.6 million, representing 52.7% of net sales, compared to $110.6 million, or 55.5% of net sales in the same period last year.
Operating income was $6.6 million, down from $17.1 million in the prior year period.
Net income was $3.5 million, or $0.15 per diluted share, compared to $17.4 million, or $0.74, for the same period in the prior year.
Forward Guidance
Given the rapidly changing environment with COVID-19, the company is refraining from providing fiscal 2021 guidance. The Company expects the COVID-19 pandemic to negatively impact its business, results of operations, and financial position; however, the related financial impact cannot be reasonably estimated at this time.
Positive Outlook
- Taking proactive measures to increase financial flexibility.
- Implementing strategic cost reductions across all functional areas.
- Borrowed an additional $30 million on its revolving credit facility in March 2020.
- Company’s strong balance sheet, with approximately $190 million of cash as of March 25, 2020, will help it navigate the current unprecedented situation.
- Maintains strong, long-term relationships with its vendors, landlords and banking partners.
Challenges Ahead
- Refraining from providing fiscal 2021 guidance.
- Expects the COVID-19 pandemic to negatively impact its business.
- Expects the COVID-19 pandemic to negatively impact its results of operations.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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