Movado Group, Inc. (NYSE:MOV) Q1 2019 Earnings Conference Call - Preliminary Transcript

May 30, 2018 • 09:00 am ET


Movado Group, Inc. (NYSE:MOV) Q1 2019 Earnings Conference Call - Preliminary Transcript


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Good day everyone and welcome to the Movado Group, Inc. Fiscal First Quarter 2018 Earnings Conference Call. As a reminder, today's call is being recorded and may not be reproduced in whole or in part without permission from the Company. At this time, I would like to turn the conference over to Rachel Schacter of ICR. Please go ahead.

Rachel Schacter

Thank you. Good morning, everyone. With me on the call is Efraim Grinberg, Chairman and Chief Executive Officer; and Sallie DeMarsilis, Chief Financial Officer. Before we get started, I would like to remind you of the Company's Safe Harbor language, which I'm sure you're all familiar with.

The statements contained in this conference call, which are not historical facts, maybe deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risk and uncertainties, all of which are described in the Company's filings with the SEC, which includes today's press release. If any non-GAAP financial measure is used on this call or presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release.

Now, I would like to turn the call over to Efraim Grinberg, Chairman and Chief Executive Officer of Movado Group. Efraim Grinberg

Efraim Grinberg

Thank you, Rachel. Welcome to Movado Group's first quarter conference call. I will review the highlights of the quarter as well as our strategies as we look at the balance of the year and then Sallie will review the details of our financial performance. We will then open the call up to your questions.

The evolution of the retail marketplace is continued to accelerate, especially at the US brick-and-mortar retail. Department store and chain jewelers have continued to experience a reduction in traffic and the watch categories continue to remain challenging. In this environment, retailers are focused on reducing their inventories and improving their productivity. As highlighted during our fourth quarter conference call, we took the decisive action during the first quarter of the year to reduce our operating expenses and plan for a reduction in sales in our current fiscal year.

Within that context, we met our expectation. Sales for the quarter were $99.3 million down 13% from last year with sales in the US down 25.4% as retailers focus on reducing their inventories in a challenging marketplace. In contrast, our outlet division performed well as sales were flat to last year on lower traffic, but with a higher rate of conversion. In our international markets, we grew sales 5.1% on a constant currency basis with stronger performances in Europe and China.

In the United States, retail sell-through continues to outpace sell-in and we anticipate that our sales performance for the balance of the year will show improvement as sell-in and sell-through become more balanced. For the quarter, our adjusted operating profit was $2.7 million versus $7.2 million last