Movado Group, Inc. (MOV) has reported a 3.05 percent fall in profit for the quarter ended Oct. 31, 2015. The company has earned $21.53 million, or $0.92 a share in the quarter, compared with $22.21 million, or $0.87 a share for the same period last year. Revenue during the quarter went down marginally by 1.55 percent to $185.63 million from $188.56 million in the previous year period. Gross margin for the quarter expanded 97 basis points over the previous year period to 53.92 percent. Total expenses were 81.98 percent of quarterly revenues, down from 82.32 percent for the same period last year. This has led to an improvement of 34 basis points in operating margin to 18.02 percent.
Operating income for the quarter was $33.45 million, compared with $33.33 million in the previous year period.
Efraim Grinberg, chairman and chief executive officer, stated, "We are pleased with our third quarter results which reflect the successful execution of our growth and efficiency strategies during an extremely challenging retail environment. Our solid results were driven by both Movado and our licensed brands portfolio which continue to outperform the overall watch category at retail. We are very excited about our recent launches of both Movado Edge, a watch collection developed in collaboration with world-renowned industrial designer Yves Behar, as well as our connected Movado timepieces which merge modern iconic design and technology."
For fiscal year 2016, Movado Group, Inc. projects revenue to be in the range of $590 million to $600 million. It projects operating income to be in the range of $72 million to $75 million. It forecasts diluted earnings per share to be in the range of $2 to $2.10 for the same fiscal year.
Operating cash flow improves significantly
Movado Group, Inc. has generated cash of $10.24 million from operating activities during the nine month period, up 659.08 percent or $8.89 million, when compared with the last year period. The company has spent $6.02 million cash to meet investing activities during the nine month period as against cash inflow of $25.28 million in the last year period
The company has spent $14.30 million cash to carry out financing activities during the nine month period as against cash outgo of $19.50 million in the last year period.
Cash and cash equivalents stood at $181.18 million as on Oct. 31, 2015, up 14.72 percent or $23.24 million from $157.94 million on Oct. 31, 2014.
Working capital increases marginally
Movado Group, Inc. has recorded an increase in the working capital over the last year. It stood at $433.43 million as at Oct. 31, 2015, up 4.50 percent or $18.66 million from $414.77 million on Oct. 31, 2014. Current ratio was at 5.97 as on Oct. 31, 2015, up from 5.49 on Oct. 31, 2014.
Cash conversion cycle (CCC) has decreased to 111 days for the quarter from 215 days for the last year period. Days sales outstanding went down to 31 days for the quarter compared with 54 days for the same period last year.
Days inventory outstanding has decreased to 96 days for the quarter compared with 196 days for the previous year period. At the same time, days payable outstanding went down to 16 days for the quarter from 35 for the same period last year.
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