Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2017 | Nov. 14, 2017 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Oct. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MOV | |
Entity Registrant Name | MOVADO GROUP INC | |
Entity Central Index Key | 72,573 | |
Current Fiscal Year End Date | --01-31 | |
Common Stock Class Undefined | ||
Entity Common Stock, Shares Outstanding | 16,298,173 | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 6,641,950 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Oct. 31, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | |
Current assets: | ||||
Cash and cash equivalents | $ 155,484 | $ 256,279 | $ 199,758 | |
Trade receivables, net | 132,941 | 66,847 | 130,076 | |
Inventories | 169,866 | 153,167 | 169,402 | |
Other current assets | 26,361 | 28,487 | 28,096 | |
Total current assets | 484,652 | 504,780 | 527,332 | |
Property, plant and equipment, net | 24,637 | 34,173 | 34,867 | |
Deferred and non-current income taxes | 23,610 | 24,837 | 20,614 | |
Goodwill | 56,316 | |||
Other intangibles, net | 22,568 | 1,633 | 1,730 | |
Other non-current assets | 47,783 | 42,379 | 39,935 | |
Total assets | 659,566 | 607,802 | 624,478 | |
Current liabilities: | ||||
Loans payable to bank, current | 5,000 | 5,000 | 3,000 | |
Accounts payable | 28,014 | 27,192 | 22,443 | |
Accrued liabilities | 62,666 | 35,061 | 52,895 | |
Income taxes payable | 5,192 | 4,149 | 5,601 | |
Total current liabilities | 100,872 | 71,402 | 83,939 | |
Loans payable to bank | 25,000 | 25,000 | 35,000 | |
Deferred and non-current income taxes payable | 7,501 | 3,322 | 3,145 | |
Other non-current liabilities | 38,752 | 34,085 | 32,297 | |
Total liabilities | 172,125 | 133,809 | 154,381 | |
Commitments and contingencies (Note 9) | ||||
Equity: | ||||
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; no shares issued | ||||
Capital in excess of par value | 189,332 | 185,354 | 182,834 | |
Retained earnings | 425,649 | 415,919 | 413,666 | |
Accumulated other comprehensive income | 80,388 | 76,780 | 77,057 | |
Treasury Stock, 11,026,671, 10,869,321 and 10,849,321 shares, respectively, at cost | (208,267) | (204,398) | (203,797) | |
Total Movado Group, Inc. shareholders' equity | 487,441 | 473,993 | 470,097 | |
Total equity | 487,441 | 473,993 | 470,097 | |
Total liabilities and equity | 659,566 | 607,802 | 624,478 | |
Common Stock Class Undefined | ||||
Equity: | ||||
Common Stock | 273 | 272 | 271 | |
Total equity | [1] | 273 | 272 | 271 |
Class A Common Stock | ||||
Equity: | ||||
Common Stock | 66 | 66 | 66 | |
Total equity | [2] | $ 66 | $ 66 | $ 66 |
[1] | Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders. | |||
[2] | Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation as amended. The class A common stock is not publicly traded, and consequently, there is currently no established public trading market for these shares. |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (PARENTHETICAL) - $ / shares | Oct. 31, 2017 | Jan. 31, 2017 | Oct. 31, 2016 |
Preferred Stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued | 0 | 0 | 0 |
Treasury Stock, shares | 11,026,671 | 10,869,321 | 10,849,321 |
Common Stock Class Undefined | |||
Common Stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 27,324,319 | 27,176,656 | 27,138,206 |
Common Stock, shares outstanding | 27,324,319 | 27,176,656 | 27,138,206 |
Class A Common Stock | |||
Common Stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 30,000,000 | 30,000,000 | 30,000,000 |
Common Stock, shares issued | 6,641,950 | 6,644,105 | 6,644,105 |
Common Stock, shares outstanding | 6,641,950 | 6,644,105 | 6,644,105 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | ||
Income Statement [Abstract] | |||||
Net sales | $ 190,693 | $ 179,818 | $ 418,739 | $ 421,967 | |
Cost of sales | 86,623 | 81,268 | 199,406 | 191,837 | |
Gross profit | 104,070 | 98,550 | 219,333 | 230,130 | |
Selling, general, and administrative | 78,885 | 67,479 | 189,479 | 183,590 | |
Operating income | [1],[2] | 25,185 | 31,071 | 29,854 | 46,540 |
Other expense (Note 3) | (1,282) | (1,282) | |||
Interest expense | (445) | (333) | (1,191) | (1,039) | |
Interest income | 110 | 45 | 361 | 138 | |
Income before income taxes | 24,850 | 29,501 | 29,024 | 44,357 | |
Provision for income taxes (Note 10) | 7,490 | 9,286 | 10,341 | 14,450 | |
Net income | 17,360 | 20,215 | 18,683 | 29,907 | |
Less: Net income attributed to noncontrolling interests | 78 | ||||
Net income attributed to Movado Group, Inc. | $ 17,360 | $ 20,215 | $ 18,683 | $ 29,829 | |
Basic income per share: | |||||
Weighted basic average shares outstanding | 23,079,000 | 23,055,000 | 23,080,000 | 23,074,000 | |
Net income per share attributed to Movado Group, Inc. | $ 0.75 | $ 0.88 | $ 0.81 | $ 1.29 | |
Diluted income per share: | |||||
Weighted diluted average shares outstanding | 23,273,000 | 23,230,000 | 23,261,000 | 23,259,000 | |
Net income per share attributed to Movado Group, Inc. | $ 0.75 | $ 0.87 | $ 0.80 | $ 1.28 | |
Dividends declared per share | $ 0.13 | $ 0.13 | $ 0.39 | $ 0.39 | |
[1] | In the International location of the Wholesale segment, for the three months ended October 31, 2017, operating income included $1.4 million of expenses primarily related to the amortization of acquired assets, as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand. | ||||
[2] | In the United States and International locations of the Wholesale segment, for the three months ended October 31, 2017, operating income included a pre-tax charge of $0.1 million and $6.9 million, respectively, as a result of the Company’s cost savings initiatives. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included a pre-tax charge of $3.9 million and $9.5 million, respectively, as a result of the Company’s cost savings initiatives. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |||
Comprehensive income, net of taxes: | ||||||
Net income including noncontrolling interests | $ 17,360 | $ 20,215 | $ 18,683 | $ 29,907 | ||
Net unrealized (loss) / gain on investments, net of tax (benefit) of $(6), $4, $(6) and $1, respectively | (13) | 6 | (12) | 8 | ||
Net change in effective portion of hedging contracts, net of tax (benefit) of $88, $(9), $9 and $5, respectively | 448 | (43) | 37 | 31 | ||
Foreign currency translation adjustments | (5,525) | (6,319) | 3,583 | [1] | 8,489 | [1] |
Comprehensive income including noncontrolling interests | 12,270 | 13,859 | 22,291 | 38,435 | ||
Less: Comprehensive income attributed to noncontrolling interests | 54 | |||||
Total comprehensive income attributed to Movado Group, Inc. | $ 12,270 | $ 13,859 | $ 22,291 | $ 38,381 | ||
[1] | The currency translation adjustment is not adjusted for income taxes to the extent that it relates to permanent investments of earnings in international subsidiaries. |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (PARENTHETICAL) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net unrealized (loss) / gain on investments, tax (benefit) | $ (6) | $ 4 | $ (6) | $ 1 |
Net change in effective portion of hedging contracts, tax (benefit) | $ 88 | $ (9) | $ 9 | $ 5 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interests | $ 18,683 | $ 29,907 |
Adjustments to reconcile net income to net cash (used in) operating activities: | ||
Depreciation and amortization | 9,842 | 8,520 |
Transactional (gains) / losses | (859) | 2,663 |
Write-down of inventories | 1,930 | 1,967 |
Deferred income taxes | 719 | 230 |
Stock-based compensation | 3,644 | 5,663 |
Impairment of long-term investment | 1,282 | |
Cost savings initiative | 13,437 | |
Changes in assets and liabilities: | ||
Trade receivables | (62,175) | (60,386) |
Inventories | (14,562) | (7,657) |
Other current assets | 1,647 | 1,540 |
Accounts payable | 334 | (5,140) |
Accrued liabilities | 18,296 | 12,892 |
Income taxes payable | 373 | (917) |
Other non-current assets | (5,399) | (5,123) |
Other non-current liabilities | 4,664 | 3,718 |
Net cash (used in) operating activities | (9,426) | (10,841) |
Cash flows from investing activities: | ||
Capital expenditures | (3,575) | (3,847) |
Short-term investment | (151) | |
Restricted cash deposits | 1,018 | (1,156) |
Trademarks and other intangibles | (500) | (296) |
Acquisition, net of cash acquired | (78,991) | |
Net cash (used in) investing activities | (82,048) | (5,450) |
Cash flows from financing activities: | ||
Proceeds from bank borrowings | 3,000 | |
Repayments of bank borrowings | (5,000) | |
Stock options exercised and other changes | (626) | (1,256) |
Dividends paid | (8,953) | (8,951) |
Purchase of incremental ownership of U.K. joint venture | (1,320) | |
Stock repurchase | (3,004) | (3,263) |
Net cash (used in) financing activities | (12,583) | (16,790) |
Effect of exchange rate changes on cash and cash equivalents | 3,262 | 4,651 |
Net (decrease) in cash and cash equivalents | (100,795) | (28,430) |
Cash and cash equivalents at beginning of period | 256,279 | 228,188 |
Cash and cash equivalents at end of period | $ 155,484 | $ 199,758 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Oct. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying interim unaudited consolidated financial statements have been prepared by Movado Group, Inc. (the “Company”), in a manner consistent with that used in the preparation of the annual audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2017 (the “2017 Annual Report on Form 10-K”). The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the periods reported. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and results of operations for the periods presented. The consolidated balance sheet data at January 31, 2017 is derived from the audited annual financial statements, which are included in the Company’s 2017 Annual Report on Form 10-K and should be read in connection with these interim unaudited financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. |
Reclassifications
Reclassifications | 9 Months Ended |
Oct. 31, 2017 | |
Reclassifications [Abstract] | |
Reclassifications | NOTE 1 – RECLASSIFICATIONS Certain reclassifications were made to prior years’ financial statement amounts and related note disclosures to conform to fiscal 2018 presentation. As a result of the adoption of ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” excess tax benefits and deficiencies related to sharebased compensation are reported as operating activities in the statement of cash flows. |
Changes to Critical Accounting
Changes to Critical Accounting Policies | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Changes to Critical Accounting Policies | NOTE 2 - As a result of the acquisition of JLB Brands Ltd., the owner of the Olivia Burton brand, in the second quarter of fiscal 2018, the Company has made the following additions to its critical accounting policies related to intangible assets and goodwill (see Note 17 – Acquisitions). Intangibles In accordance with applicable guidance, the Company estimates and records the fair value of purchased intangible assets at the time of its acquisition, which in the acquisition of the Olivia Burton brand primarily consist of a trade name and customer relationships. The fair values of these intangible assets are estimated based on independent third-party appraisals. Finite-lived intangible assets are amortized over their respective estimated useful lives and are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. Estimates of fair value for finite-lived intangible assets are primarily determined using discounted cash flows, with consideration of market comparisons and recent transactions. This approach uses significant estimates and assumptions, including projected future cash flows, discount rates and growth rates. Goodwill At the time of acquisition, in accordance with applicable guidance, the Company records all acquired net assets at their estimated fair values. These estimated fair values are based on management’s assessments and independent third-party appraisals. The excess of the purchase consideration over the aggregate estimated fair values of the acquired net assets is recorded as goodwill. Goodwill is not amortized but will be assessed for impairment at least annually. Under applicable guidance, the Company generally performs its annual goodwill impairment analysis using a qualitative approach to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. If, based on the results of the qualitative assessment, it is concluded that it is more likely than not that the fair value of goodwill is less than its carrying value, a quantitative test is performed. The Company early adopted ASU 2017-04 “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment” (see Note 14 – Accounting Changes and Recent Accounting Pronouncements) on a prospective basis during the second quarter of fiscal 2018 in light of goodwill in the period, associated with the acquisition of the Olivia Burton brand. The quantitative impairment test is performed to measure the amount of impairment loss, if any. The quantitative impairment test identifies the existence of potential impairment by comparing the fair value of each reporting unit with its carrying value, including goodwill. If a reporting unit’s carrying amount exceeds its fair value, the Company will record an impairment charge, as an operating expense item, based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. Determination of the fair value of a reporting unit and the fair value of individual assets and liabilities of a reporting unit is based on management's assessment, including the consideration of independent third-party appraisals when necessary. Furthermore, this determination is subjective in nature and involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge. Estimates of fair value are primarily determined using discounted cash flows, market comparisons, and recent transactions. These approaches use significant estimates and assumptions, including projected future cash flows, discount rates, growth rates, and determination of appropriate market comparisons. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 31, 2017 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract] | |
Fair Value Measurements | NOTE 3 – FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. • Level 3 – Unobservable inputs based on the Company’s assumptions. The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands) as of October 31, 2017 and 2016 and January 31, 2017: Fair Value at October 31, 2017 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities Other current assets $ 291 $ — $ — $ 291 Short-term investment Other current assets 156 — — 156 SERP assets - employer Other non-current assets 1,538 — — 1,538 SERP assets - employee Other non-current assets 35,532 — — 35,532 Hedge derivatives Other current assets — 67 — 67 Total $ 37,517 $ 67 $ — $ 37,584 Liabilities: SERP liabilities - employee Other non-current liabilities $ 35,532 $ — $ — $ 35,532 Hedge derivatives Accrued liabilities — 685 — 685 Total $ 35,532 $ 685 $ — $ 36,217 Fair Value at January 31, 2017 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities Other current assets $ 309 $ — $ — $ 309 Short-term investment Other current assets 154 — — 154 SERP assets - employer Other non-current assets 1,091 — — 1,091 SERP assets - employee Other non-current assets 30,831 — — 30,831 Hedge derivatives Other current assets — 145 — 145 Total $ 32,385 $ 145 $ — $ 32,530 Liabilities: SERP liabilities - employee Other non-current liabilities $ 30,831 $ — $ — $ 30,831 Hedge derivatives Accrued liabilities — 211 — 211 Total $ 30,831 $ 211 $ — $ 31,042 Fair Value at October 31, 2016 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities Other current assets $ 280 $ — $ — $ 280 Short-term investment Other current assets 150 — — 150 SERP assets - employer Other non-current assets 1,464 — — 1,464 SERP assets - employee Other non-current assets 28,495 — — 28,495 Hedge derivatives Other current assets — 141 — 141 Total $ 30,389 $ 141 $ — $ 30,530 Liabilities: SERP liabilities - employee Other non-current liabilities $ 28,495 $ — $ — $ 28,495 Hedge derivatives Accrued liabilities — 391 — 391 Total $ 28,495 $ 391 $ — $ 28,886 The fair values of the Company’s available-for-sale securities are based on quoted prices. The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of a percent calculated annually. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the Company’s liability to the employees in the plan for their vested balances. The hedge derivatives are entered into by the Company principally to reduce its exposure to Swiss franc and Euro exchange rate risks. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates and quoted interest rates. The carrying amount of debt approximated fair value as of October 31, 2017. During the three months ended October 31, 2016, the Company determined that an investment in a privately held company experienced an other than temporary impairment and recorded a charge of $1.3 million, in other expenses in the Company’s Consolidated Statements of Operations, to reduce the carrying value to zero in the United States location of the Wholesale segment. |
Equity
Equity | 9 Months Ended |
Oct. 31, 2017 | |
Equity [Abstract] | |
Equity | NOTE 4 – EQUITY The components of equity for the nine months ended October 31, 2017 and 2016 are as follows (in thousands): Movado Group, Inc. Shareholders' Equity Common Stock Class Common Stock Capital Excess Par Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Noncontrolling Interests Total Balance, January 31, 2017 $ 272 $ 66 $ 185,354 $ 415,919 $ (204,398 ) $ 76,780 $ — $ 473,993 Net income 18,683 18,683 Dividends (8,953 ) (8,953 ) Stock repurchase (3,004 ) (3,004 ) Stock options exercised 1 238 (865 ) (626 ) Supplemental executive retirement plan 96 96 Stock-based compensation expense 3,644 3,644 Net unrealized loss on investments, net of tax benefit of $6 (12 ) (12 ) Net change in effective portion of hedging contracts, net of tax of $9 37 37 Foreign currency translation adjustment (3) 3,583 3,583 Balance, October 31, 2017 $ 273 $ 66 $ 189,332 $ 425,649 $ (208,267 ) $ 80,388 $ — $ 487,441 Common Stock Class Common Stock Capital Excess Par Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Noncontrolling Interests Total Balance, January 31, 2016 $ 270 $ 66 $ 178,118 $ 392,788 $ (199,195 ) $ 68,505 $ 595 $ 441,147 Net income 29,829 78 29,907 Dividends (8,951 ) (8,951 ) Stock repurchase (3,263 ) (3,263 ) Stock options exercised, net of tax of $167 1 (86 ) (1,339 ) (1,424 ) Supplemental executive retirement plan 150 150 Stock-based compensation expense 5,663 5,663 Net unrealized gain on investments, net of tax of $1 8 8 Net change in effective portion of hedging contracts, net of tax of $5 31 31 Joint venture incremental share purchase (1,011 ) (649 ) (1,660 ) Foreign currency translation adjustment (3) 8,513 (24 ) 8,489 Balance, October 31, 2016 $ 271 $ 66 $ 182,834 $ 413,666 $ (203,797 ) $ 77,057 $ — $ 470,097 (1) Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders. (2) Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation as amended. The class A common stock is not publicly traded, and consequently, there is currently no established public trading market for these shares. (3) The currency translation adjustment is not adjusted for income taxes to the extent that it relates to permanent investments of earnings in international subsidiaries. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Oct. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 5 – SEGMENT AND GEOGRAPHIC INFORMATION The Company follows accounting guidance which requires disclosure of segment data based on how management makes decisions about allocating resources to segments and measuring their performance. The Company conducts its business in two operating segments: Wholesale and Retail. The Company’s Wholesale segment includes the designing, manufacturing and distribution of watches of quality owned brands and licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Retail segment includes the Company’s retail outlet locations. The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all non-U.S. Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 35.7%, 8.4%, 6.5% and 4.5%, respectively, of the Company’s total net sales for the three months ended October 31, 2017. For the three months ended October 31, 2016, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 23.5%, 7.3%, 7.2% and 5.4%, respectively, of the Company’s total net sales. The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 31.7%, 9.4%, 7.8% and 5.2%, respectively, of the Company’s total net sales for the nine months ended October 31, 2017. For the nine months ended October 31, 2016, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 23.1%, 8.4%, 8.4% and 5.9%, respectively, of the Company’s total net sales. Operating Segment Data for the Three Months Ended October 31, 2017 and 2016 (in thousands): Net Sales 2017 2016 Wholesale: Owned brands category $ 75,138 $ 73,749 Licensed brands category 95,015 86,818 After-sales service and all other 2,159 3,522 Total Wholesale 172,312 164,089 Retail 18,381 15,729 Consolidated total $ 190,693 $ 179,818 Operating Income (3) (4) 2017 2016 Wholesale $ 22,250 $ 28,697 Retail 2,935 2,374 Consolidated total $ 25,185 $ 31,071 Operating Segment Data for the Nine Months Ended October 31, 2017 and 2016 (in thousands): Net Sales 2017 2016 Wholesale: Owned brands category $ 154,620 $ 162,428 Licensed brands category 208,914 205,229 After-sales service and all other 6,956 9,601 Total Wholesale 370,490 377,258 Retail 48,249 44,709 Consolidated total $ 418,739 $ 421,967 Operating Income (3) (4) 2017 2016 Wholesale $ 22,559 $ 39,898 Retail 7,295 6,642 Consolidated total $ 29,854 $ 46,540 Total Assets October 31, 2017 January 31, 2017 October 31, 2016 Wholesale $ 633,101 $ 584,518 $ 600,885 Retail 26,465 23,284 23,593 Consolidated total $ 659,566 $ 607,802 $ 624,478 Geographic Location Data for the Three Months Ended October 31, 2017 and 2016 (in thousands): Net Sales Operating Income (3) (4) 2017 2016 2017 2016 United States (1) $ 85,685 $ 101,854 $ 2,971 $ 14,626 International (2) 105,008 77,964 22,214 16,445 Consolidated total $ 190,693 $ 179,818 $ 25,185 $ 31,071 United States and International net sales are net of intercompany sales of $87.2 million and $75.6 million for the three months ended October 31, 2017 and 2016, respectively. Geographic Location Data for the Nine Months Ended October 31, 2017 and 2016 (in thousands): Net Sales Operating (Loss) / Income (3) (4) 2017 2016 2017 2016 United States (1) $ 192,325 $ 228,734 $ (5,409) $ 12,841 International (2) 226,414 193,233 35,263 33,699 Consolidated total $ 418,739 $ 421,967 $ 29,854 $ 46,540 United States and International net sales are net of intercompany sales of $211.8 million and $231.5 million for the nine months ended October 31, 2017 and 2016, respectively. (1) The United States operating income included $15.8 million and $14.3 million of unallocated corporate expenses for the three months ended October 31, 2017 and 2016, respectively. The United States operating income included $29.2 million and $33.0 million of unallocated corporate expenses for the nine months ended October 31, 2017 and 2016, respectively. (2) The International operating income included $15.7 million and $14.0 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended October 31, 2017 and 2016, respectively. The International operating income included $31.2 million and $30.5 million of certain intercompany profits related to the Company’s supply chain operations for the nine months ended October 31, 2017 and 2016, respectively. (3) In the United States and International locations of the Wholesale segment, for the three months ended October 31, 2017, operating income included a pre-tax charge of $0.1 million and $6.9 million, respectively, as a result of the Company’s cost savings initiatives. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included a pre-tax charge of $3.9 million and $9.5 million, respectively, as a result of the Company’s cost savings initiatives. (4) In the International location of the Wholesale segment, for the three months ended October 31, 2017, operating income included $1.4 million of expenses primarily related to the amortization of acquired assets, as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand. Total Assets October 31, 2017 January 31, 2017 October 31, 2016 United States $ 195,659 $ 207,246 $ 242,881 International 463,907 400,556 381,597 Consolidated total $ 659,566 $ 607,802 $ 624,478 Property, Plant and Equipment, Net October 31, 2017 January 31, 2017 October 31, 2016 United States $ 16,762 $ 19,197 $ 20,307 International 7,875 14,976 14,560 Consolidated total $ 24,637 $ 34,173 $ 34,867 |
Inventories
Inventories | 9 Months Ended |
Oct. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 6 – INVENTORIES Inventories consisted of the following (in thousands): October 31, 2017 January 31, 2017 October 31, 2016 Finished goods $ 129,981 $ 112,297 $ 122,721 Component parts 37,920 38,482 43,326 Work-in-process 1,965 2,388 3,355 $ 169,866 $ 153,167 $ 169,402 |
Debt and Lines of Credit
Debt and Lines of Credit | 9 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt and Lines of Credit | NOTE 7 – DEBT AND LINES OF CREDIT On January 30, 2015, the Company, together with Movado Group Delaware Holdings Corporation, Movado Retail Group, Inc. and Movado LLC (collectively, the “Borrowers”), each a wholly-owned domestic subsidiary of the Company, entered into a Credit Agreement (the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A. as administrative agent (in such capacity, the “Agent”). The Credit Agreement provides for a $100.0 million senior secured revolving credit facility (the “Facility”) including a $15.0 million letter of credit sub-facility that matures on January 30, 2020, with provisions for uncommitted increases of up to $50.0 million in the aggregate, subject to customary terms and conditions. In connection with the Credit Agreement, the Borrowers also entered into a Security and Pledge Agreement dated as of January 30, 2015 in favor of the Agent (the “Security Agreement”). As of October 31, 2017, $30.0 million in loans were drawn under the Facility. Additionally, approximately $0.3 million in letters of credit, which were outstanding under the Borrower’s pre-existing asset-based revolving credit facility that was concurrently terminated when the Credit Agreement became effective, are deemed to be issued and outstanding under the Facility. As of October 31, 2017, availability under the Facility was approximately $69.7 million. Borrowings under the Facility bear interest at rates selected periodically by the Company at LIBOR plus a spread ranging from 1.25% to 1.75% per annum, based on the Company’s consolidated leverage ratio, or at a base rate plus a spread ranging from 0.25% to 0.75% per annum based on the Company’s consolidated leverage ratio (as defined in the Credit Agreement). At October 31, 2017, the Company’s spreads were 1.25% over LIBOR and 0.25% over the base rate. The Company has also agreed to pay certain fees and expenses and to provide certain indemnities, all of which are customary for such financings. The borrowings under the Facility are joint and several obligations of the Borrowers and are also cross-guaranteed by each Borrower. In addition, pursuant to the Security Agreement, the Borrowers’ obligations under the Facility are secured by first priority liens, subject to permitted liens, on substantially all of the Borrowers’ assets other than certain excluded assets. The Security Agreement contains representations, warranties and covenants, which are customary for pledge and security agreements of this type, relating to the creation and perfection of security interests in favor of the Agent over various categories of the Borrowers’ assets. The Credit Agreement contains affirmative and negative covenants binding on the Borrowers and their subsidiaries that are customary for credit facilities of this type, including, but not limited to, restrictions and limitations on the incurrence of debt and liens, dispositions of assets, capital expenditures, dividends and other payments in respect of equity interests, the making of loans and equity investments, mergers, consolidations, liquidations and dissolutions, and transactions with affiliates (in each case, subject to various exceptions). The Borrowers are also subject to a minimum consolidated EBITDA (as defined in the Credit Agreement) test of $50.0 million, measured at the end of each fiscal quarter based on the four most recent fiscal quarters and a consolidated leverage ratio (as defined in the Credit Agreement) covenant not to exceed 2.50 to 1.00, measured as of the last day of each fiscal quarter. As of October 31, 2017, the Company was in compliance with its covenants under the Credit Agreement. The Credit Agreement contains events of default that are customary for facilities of this type, including, but not limited to, nonpayment of principal, interest, fees and other amounts when due, failure of any representation or warranty to be true in any material respect when made or deemed made, violation of covenants, cross default with material indebtedness, material judgments, material ERISA liability, bankruptcy events, asserted or actual revocation or invalidity of the loan documents, and change of control. As of October 31, 2017, the Company classified $5.0 million of the outstanding balance under the Facility as current based on voluntary payments estimated to be made in the next twelve months, with the remainder classified as long-term debt based on the 2020 maturity date of the Facility and the Company’s intent and ability to refinance its obligations thereunder. As of October 31, 2017, Bank of America, N.A. issued two irrevocable standby letters of credit in connection with retail and operating facility leases to various landlords and for Canadian payroll to the Royal Bank of Canada. As of October 31, 2017, the Company had outstanding letters of credit totaling $0.3 million with expiration dates through May 31, 2018. A Swiss subsidiary of the Company maintains unsecured lines of credit with an unspecified maturity with a Swiss bank. As of October 31, 2017 and 2016, these lines of credit totaled 6.5 million Swiss francs and 6.5 million Swiss francs with a dollar equivalent of $6.5 million and $6.4 million, respectively. As of October 31, 2017 and 2016, there were no borrowings against these lines. As of October 31, 2017, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.1 million, in various foreign currencies, of which $0.5 million is a restricted deposit as it relates to lease agreements. As of October 31, 2016, two European banks had guaranteed obligations to third parties on behalf of two of the Company’s foreign subsidiaries in the dollar equivalent of $1.2 million in various foreign currencies, of which $0.6 million is a restricted deposit as it relates to lease agreements. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Oct. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 8 – EARNINGS PER SHARE The Company presents net income per share on a basic and diluted basis. Basic earnings per share are computed using weighted-average shares outstanding during the period. Diluted earnings per share are computed using the weighted-average number of shares outstanding adjusted for dilutive common stock equivalents. The weighted-average number of shares outstanding for basic earnings per share was approximately 23,079,000 and 23,055,000 for the three months ended October 31, 2017 and 2016, respectively. For the three months ended October 31, 2017 and 2016, the number of shares outstanding for diluted earnings per share increased by approximately 194,000 and 175,000, respectively, due to potentially dilutive common stock equivalents issuable under the Company’s stock compensation plans and SERP. For the three months ended October 31, 2017 and 2016, approximately 798,000 and 862,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. The weighted-average number of shares outstanding for basic earnings per share was approximately 23,080,000 and 23,074,000 for the nine months ended October 31, 2017 and 2016, respectively. For the nine months ended October 31, 2017 and 2016, the number of shares outstanding for diluted earnings per share increased by approximately 181,000 and 185,000, respectively, due to potentially dilutive common stock equivalents issuable under the Company’s stock compensation plans and SERP. For the nine months ended October 31, 2017 and 2016, approximately 803,000 and 790,000, respectively, of potentially dilutive common stock equivalents were excluded from the computation of diluted earnings per share because their effect would have been antidilutive. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 – COMMITMENTS AND CONTINGENCIES The Company has minimum commitments related to the Company’s license agreements and endorsement agreements with brand ambassadors. The Company sources, distributes, advertises and sells watches pursuant to its exclusive license agreements with unaffiliated licensors. Royalty amounts under the license agreements are generally based on a stipulated percentage of revenues, although most of these agreements contain provisions for the payment of minimum annual royalty amounts. The license agreements have various terms and some have additional renewal options, provided that minimum sales levels are achieved. Additionally, the license agreements require the Company to pay minimum annual advertising amounts. The Company believes that income tax reserves are adequate; however, amounts asserted by taxing authorities could be greater or less than amounts accrued and reflected in the consolidated balance sheets. Accordingly, the Company could record adjustments to the amounts for federal, state, and foreign liabilities in the future as the Company revises estimates or settles or otherwise resolves the underlying matters. In the ordinary course of business, the Company may take new positions that could increase or decrease unrecognized tax benefits in future periods. During the second quarter of fiscal 2018, the Company released to cash $1.0 million in restricted cash deposits that were previously recorded in other current assets on the Company’s Consolidated Balance Sheet, related to a certain vendor agreement. In December 2016, U.S. Customs and Border Protection (“U.S. Customs”) issued an audit report concerning the methodology used by the Company to allocate the cost of certain watch styles imported into the U.S. among the component parts of those watches for tariff purposes. The report disputes the reasonableness of the Company’s historical allocation formulas and proposes an alternative methodology that would imply approximately $5.1 million in underpaid duties over the five-year period covered by the statute of limitations, plus possible penalties and interest. The Company believes that U.S. Customs’ alternative duty methodology and estimate are not consistent with the Company’s facts and circumstances and is disputing U.S. Customs’ position. On February 24, 2017, the Company provided U.S. Customs with supplemental analyses and information supporting the Company’s historical allocation formulas and is in the process of providing additional information for U.S. Customs’ review. Although the Company disagrees with U.S. Customs’ position, it cannot predict with any certainty the outcome of this matter. The Company intends to continue to work with U.S. Customs to reach a mutually-satisfactory resolution. The Company is involved in legal proceedings and claims from time to time, in the ordinary course of its business. Legal reserves are recorded in accordance with the accounting guidance for contingencies. Contingencies are inherently unpredictable and it is possible that results of operations, balance sheets or cash flows could be materially and adversely affected in any particular period by unfavorable developments in, or resolution or disposition of, such matters. For those legal proceedings and claims for which the Company believes that it is probable that a reasonably estimable loss may result, the Company records a reserve for the potential loss. For proceedings and claims where the Company believes it is reasonably possible that a loss may result that is materially in excess of amounts accrued for the matter, the Company either discloses an estimate of such possible loss or range of loss or includes a statement that such an estimate cannot be made. As of October 31, 2017, the Company is party to legal proceedings and contingencies, the resolution of which is not expected to materially affect its financial condition, future results of operations beyond the amounts accrued, or cash flows. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10 – INCOME TAXES The Company recorded income tax expense of $7.5 million and $9.3 million for the three months ended October 31, 2017 and 2016, respectively. The effective tax rate was 30.1% and 31.5% for the three months ended October 31, 2017 and 2016, respectively. The decrease in the effective tax rate was primarily due to changes in jurisdictional earnings and the impact of discrete items partially offset by no tax benefit being recognized on losses incurred by certain foreign operations. The Company recorded income tax expense of $10.3 million and $14.5 million for the nine months ended October 31, 2017 and 2016, respectively. The effective tax rate was 35.6% and 32.6% for the nine months ended October 31, 2017 and 2016, respectively. The increase in the effective tax rate was primarily due to the impact of discrete items mostly related to the adoption of ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” acquisition costs related to the acquisition of the Olivia Burton brand (see Note 17 – Acquisitions for additional disclosures) and no tax benefit being recognized on losses incurred by certain foreign operations, partially offset by changes in jurisdictional earnings. The effective tax rate for the three and nine months ended October 31, 2017 differs from the U.S. statutory tax rate of 35.0% primarily due to changes in jurisdictional earnings and the impact of discrete items, partially offset by no tax benefit being recognized on losses incurred by certain foreign operations. The effective tax rate for the nine months ended October 31, 2017 also includes an increase primarily due to the adoption of ASU 2016-09 and acquisition costs related to the acquisition of the Olivia Burton brand. The effective tax rate for the three and nine months ended October 31, 2016 differs from the U.S. statutory tax rate of 35.0% primarily as a result of changes in jurisdictional earnings, partially offset by no tax benefit being recognized on losses incurred by certain foreign operations. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Oct. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | NOTE 11 – DERIVATIVE FINANCIAL INSTRUMENTS The Company accounts for its derivative financial instruments in accordance with the accounting guidance which requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. A significant portion of the Company’s purchases are denominated in Swiss francs and, to a lesser extent, the Japanese Yen. The Company also sells to third-party customers in a variety of foreign currencies, most notably the Euro and the British Pound. The Company reduces its exposure to the Swiss franc, Euro, British Pound and Japanese Yen exchange rate risks through a hedging program. Under the hedging program, the Company manages most of its foreign currency exposures on a consolidated basis, which allows it to net certain exposures and take advantage of natural offsets. In the event these exposures do not offset, from time to time the Company uses forward contracts to further reduce the net exposures to currency fluctuations. Certain of these contracts meet the requirements of qualified hedges. In these circumstances, the Company designates and documents these derivative instruments as a cash flow hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transactions. Changes in the fair value of hedges designated and documented as a cash flow hedge and which are highly effective, are recorded in other comprehensive income until the underlying transaction affects earnings, and then are later reclassified into earnings in the same account as the hedged transaction. The earnings impact is mostly offset by the effects of currency movements on the underlying hedged transactions. The Company formally assesses, both at the inception and at each financial quarter thereafter, the effectiveness of the derivative instrument hedging the underlying forecasted cash flow transaction. The Company does not exclude any designated cash flow hedges from its effectiveness testing. Any ineffectiveness related to the derivative financial instruments’ change in fair value will be recognized as other income in the Consolidated Statements of Operations in the period in which the ineffectiveness was calculated. No ineffectiveness has been recorded in the three and nine months ended October 31, 2017 and 2016. The Company uses forward exchange contracts, which do not meet the requirements of qualified hedges, to offset its exposure to certain foreign currency receivables and liabilities. These forward contracts are not designated as qualified hedges and, therefore, changes in the fair value of these derivatives are recognized in earnings in the period they arise, thereby offsetting the current earnings effect resulting from the revaluation of the related foreign currency receivables and liabilities. All of the Company’s derivative instruments have liquid markets to assess fair value. The Company does not enter into any derivative instruments for trading purposes. As of October 31, 2017, the Company’s entire net forward contracts hedging portfolio consisted of 23.0 million Swiss francs equivalent, 12.8 million Euros equivalent and 11.3 million British Pounds equivalent , The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for derivatives (in thousands): Asset Derivatives Liability Derivatives Balance Sheet Location October 31, 2017 Fair Value January 31, 2017 Fair Value October 31, 2016 Fair Value Balance Sheet Location October 31, 2017 Fair Value January 31, 2017 Fair Value October 31, 2016 Fair Value Derivatives not designated as hedging instruments: Foreign Exchange Contracts Other Current Assets $ — $ 145 $ 31 Accrued Liabilities $ 685 $ 211 $ 391 Total Derivative Instruments $ — $ 145 $ 31 $ 685 $ 211 $ 391 Asset Derivatives Liability Derivatives Balance Sheet Location October 31, 2017 Fair Value January 31, 2017 Fair Value October 31, 2016 Fair Value Balance Sheet Location October 31, 2017 Fair Value January 31, 2017 Fair Value October 31, 2016 Fair Value Derivatives designated as hedging instruments: Foreign Exchange Contracts Other Current Assets $ 67 $ — $ 110 Accrued Liabilities $ — $ — $ — Total Derivative Instruments $ 67 $ — $ 110 $ — $ — $ — As of October 31, 2017 and 2016, the balance of deferred net gains on derivative financial instruments documented as cash flow hedges included in accumulated other comprehensive income (“AOCI”) were immaterial for both periods. The maximum length of time the Company hedges its exposure to the fluctuation in future cash flows for forecasted transactions is 24 months. For the three months ended October 31, 2017, the Company reclassified from AOCI to earnings $0.4 million of net loss, net of tax benefit of $0.1 million. For the nine months ended October 31, 2017, the Company reclassified from AOCI to earnings $0.9 million of net loss, net of tax benefit of $0.2 million. For the three and nine months ended October 31, 2016, the Company reclassified amounts from AOCI to earnings that were immaterial for both periods. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Oct. 31, 2017 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income | NOTE 12- ACCUMULATED OTHER COMPREHENSIVE INCOME The components of accumulated other comprehensive income consisted of the following (in thousands): Currency Translation Adjustments Available-for-sale securities Hedging Contracts Total Balance, January 31, 2017 $ 76,569 $ 197 $ 14 $ 76,780 Other comprehensive income / (loss) before reclassifications 3,583 (12 ) 931 4,502 Amounts reclassified from accumulated other comprehensive income (1) — — (894 ) (894) Net current-period other comprehensive income / (loss) 3,583 (12 ) 37 3,608 As of October 31, 2017 $ 80,152 $ 185 $ 51 $ 80,388 Currency Translation Adjustments Available-for-sale securities Hedging Contracts Total Balance, January 31, 2016 $ 68,265 $ 189 $ 51 $ 68,505 Other comprehensive income / (loss) before reclassifications 8,513 8 (15 ) 8,506 Amounts reclassified from accumulated other comprehensive loss (1) — — 46 46 Net current-period other comprehensive income 8,513 8 31 8,552 As of October 31, 2016 $ 76,778 $ 197 $ 82 $ 77,057 (1) Amounts reclassified to earnings in the Consolidated Statements of Operations. |
Treasury Stock
Treasury Stock | 9 Months Ended |
Oct. 31, 2017 | |
Equity [Abstract] | |
Treasury Stock | NOTE 13 – TREASURY STOCK On August 29, 2017, the Board approved a share repurchase program under which the Company is authorized to purchase up to $50.0 million of its outstanding common stock from time to time, depending on market conditions, share price and other factors. The Company may purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. This authorization expires on August 29, 2020. On March 31, 2016, the Board approved a share repurchase program under which the Company was authorized to purchase up to $50.0 million of its outstanding common stock from time to time, depending on market conditions, share price and other factors. This program authorized the Company to purchase shares of its common stock through open market purchases, repurchase plans, block trades or otherwise. As of August 29, 2017, this program was canceled and a new share repurchase program was simultaneously approved. During the nine months ended October 31, 2017, under both the new and previously authorized repurchase plans, the Company repurchased a total of 120,507 shares of its common stock at a total cost of approximately $3.0 million or an average cost of $24.93 per share, which included 20,000 shares repurchased from the Movado Group Foundation at a total cost of approximately $0.5 million or $22.90 average per share. During the nine months ended October 31, 2016, under the previously authorized repurchase plan, the Company repurchased a total of 137,499 shares of its common stock at a total cost of approximately $3.3 million or an average cost of $23.73 per share, which included 15,000 shares repurchased from the Movado Group Foundation at a total cost of approximately $0.4 million or $27.67 average per share. There were 36,843 and 47,310 shares of common stock repurchased during the nine months ended October 31, 2017 and 2016, respectively, as a result of the surrender of shares in connection with the vesting of certain stock awards. At the election of an employee, shares having an aggregate value on the vesting date equal to the employee’s withholding tax obligation may be surrendered to the Company to fund the payment of such taxes. |
Accounting Changes and Recent A
Accounting Changes and Recent Accounting Pronouncements | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Changes And Error Corrections [Abstract] | |
Accounting Changes and Recent Accounting Pronouncements | NOTE 14 – ACCOUNTING CHANGES AND RECENT ACCOUNTING PRONOUNCEMENTS On January 26, 2017, FASB issued ASU 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value when calculating goodwill, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which evaluates the extent, if any, by which the carrying value of a reporting unit exceeds its fair value, with any resulting impairment not exceeding the carrying amount of goodwill. The Company early adopted ASU 2017-04 on a prospective basis during the second quarter of fiscal 2018 in light of goodwill in the period, associated with the acquisition of the Olivia Burton brand (see Note 17 – Acquisitions). If the Company's goodwill becomes impaired, the adoption of ASU 2017-04 could make the impairment recorded materially different from what would have been recorded under the previous standard. On January 5, 2017, FASB issued ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business,” which clarifies the definition of a business. The objective of this ASU is to assist entities in determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company early adopted ASU 2017-01 on a prospective basis during the second quarter of fiscal 2018, in connection with the acquisition of the Olivia Burton brand (see Note 17 – Acquisitions). The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial position. On March 30, 2016, FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” On August 28, 2017, FASB issued ASU 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities,” which expands an entity’s ability to apply hedge accounting for nonfinancial and financial risk components and allows for a simplified approach for fair value hedging of interest rate risk. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The new guidance also simplifies the hedge documentation and effectiveness assessment requirements. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, with early adoption permitted. The new standard must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company is evaluating the impact of the adoption of this guidance on the Company’s consolidated financial statements. On February 25, 2016, FASB issued ASU 2016-02, “Leases,” which requires lessees to recognize most leases on the balance sheet. This change is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase in required disclosures and will result in a material increase to the company’s total assets and liabilities through recognition of right-of-use assets and related lease liabilities. The Company is analyzing the impact of the adoption of this guidance on the Company’s consolidated financial statements, including assessing changes that might be necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting. On May 28, 2014, FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This pronouncement affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, FASB deferred the effective date of the guidance. The new revenue standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and allows either a full retrospective adoption to all periods presented or a modified retrospective adoption approach with the cumulative effect of initial application of the revised guidance recognized at the date of initial application. Early adoption is permitted for periods beginning after December 15, 2016. On March 30, 2016, FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Principal versus Agent Considerations),” to clarify the implementation guidance on principal versus agent considerations. On April 14, 2016, FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Identifying Performance Obligations and Licensing),” to clarify the implementation guidance on identifying performance obligations and accounting for licenses of intellectual property. On May 9, 2016, FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Narrow-Scope Improvements and Practical Expedients),” to clarify the implementation guidance on assessing collectability, presentation of sales taxes, noncash consideration and completed contracts and contract modifications at transition. The Company is assessing the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences, if any, that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. The Company has elected to adopt the new standard under the Modified Retrospective approach and is considering whether it will apply certain of the practical expedients available under the new standard. The Company will continue evaluating the impact, if any, on changes to its business processes, systems and controls to support recognition and disclosure under the new guidance. The Company expects to adopt the new guidance in the beginning of fiscal 2019. |
Operating Efficiency Initiative
Operating Efficiency Initiatives and Other Items | 9 Months Ended |
Oct. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Operating Efficiency Initiatives and Other Items | NOTE 15 – OPERATING EFFICIENCY INITIATIVES AND OTHER ITEMS In fiscal 2016, the Company commenced an initiative to achieve greater operating efficiencies and streamline its operations, primarily at certain of its foreign subsidiaries. The Company recorded a total of $4.0 million of pre-tax expenses during fiscal 2016 and substantially completed the actions under the initiative as of January 31, 2016. A summary rollforward of costs related to the operating efficiency initiatives and other items is as follows (in thousands): Balance at January 31, 2017 Cash payments Foreign exchange Accrued balance at October 31, 2017 Severance $ 78 $ (1 ) $ 1 $ 78 Occupancy charges 330 (99 ) 2 233 Total $ 408 $ (100 ) $ 3 $ 311 |
Cost Savings Initiatives
Cost Savings Initiatives | 9 Months Ended |
Oct. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Cost Savings Initiatives | NOTE 16 – COST SAVINGS INITIATIVES As a result of actions taken by the Company in the first quarter of fiscal 2018 to better align its global infrastructure with the current business environment by consolidating certain operations and streamlining functions to reduce costs and improve profitability, the Company recorded $6.3 million of pre-tax expenses primarily for severance and payroll related, other and occupancy charges, predominantly impacting the Company’s North American and Swiss operations. The Company recorded an additional $0.1 million of pre-tax expenses in the second quarter of fiscal 2018 related to Other. In light of the changing retail landscape and the growing importance of digital marketing and online sales, the Company also decided in the third quarter of fiscal 2018, to cease its participation in the Baselworld Watch and Jewelry Show. As a result, the Company recorded charges for the write-off of certain fixed assets and other contract termination costs. The Company also wrote-off certain fixed assets related to the reduction of leased space in the Company’s Swiss operations. In the third quarter of fiscal 2018, the Company recorded an additional $7.0 million of pre-tax expenses related to fixed assets, severance and payroll related and other. The Company expects the cost savings initiatives to be substantially completed by the end of fiscal 2018. A summary roll forward of costs related to the cost savings initiatives is as follows (in thousands): Fiscal 2018 Charges (2) Cash payments Non-cash adjustments Foreign exchange Balance in Accrued Liabilities at October 31, 2017 Severance and payroll related (1) $ 6,061 $ (5,276 ) $ (401 ) $ 67 $ 451 Fixed assets (1) 5,105 — (5,105 ) — — Other (1) 2,172 (73 ) (71 ) (6 ) 2,022 Occupancy charges (1) 99 (22 ) — 6 83 Total $ 13,437 $ (5,371 ) $ (5,577 ) $ 67 $ 2,556 (1) The total severance and payroll related charges of $0.1 million, fixed assets charges of $5.1 million and other charges of $1.8 million are included in SG&A in the Consolidated Statement of Operations for the three months ended October 31, 2017. The total severance and payroll related charges of $6.1 million include $4.7 million in SG&A and $1.4 million in Cost of Sales in the Consolidated Statement of Operations for the nine months ended October 31, 2017. The fixed assets charges of $5.1 million, other charges of $2.2 million and occupancy charges of $0.1 million are included in SG&A in the Consolidated Statement of Operations for the nine months ended October 31, 2017. ( 2 ) The United States and International locations of the Wholesale segment include a pre-tax charge of $0.1 million and $6.9 million, respectively, for the three months ended October 31, 2017. The United States and International locations of the Wholesale segment include a pre-tax charge of $3.9 million and $9.5 million, respectively, for the nine months ended October 31, 2017. |
Acquisitions
Acquisitions | 9 Months Ended |
Oct. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 17 – ACQUISITIONS On July 3, 2017, the Company, through a wholly-owned U.K. subsidiary, acquired JLB Brands Ltd., the owner of the Olivia Burton brand, one of the United Kingdom’s fastest growing fashion watch and jewelry brands, for $78.2 million, or £60.0 million in cash, subject to working capital and other closing adjustments. After giving effect to the closing adjustments, the purchase price was $79.0 million, or £60.7 million, net of cash acquired of approximately $5.9 million, or £4.5 million. The acquisition was funded with cash on hand of the Company’s non-U.S. subsidiaries, and no debt was assumed in the acquisition. The acquisition adds a new brand with significant global growth potential to the Company’s portfolio. The results of the Olivia Burton brand’s operations have been included in the consolidated financial statements since the date of acquisition within the International location of the Wholesale segment. In the International location of the Wholesale segment, for the three months ended October 31, 2017, operating income included $1.4 million of expenses primarily related to the amortization of acquired assets, as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand. The acquisition was accounted for in accordance with FASB Topic ASC 805 (“Business Combinations”), which requires that the total cost of an acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition. The following table summarizes the fair value of the assets acquired and liabilities assumed as of the July 3, 2017 acquisition date (in thousands): Assets Acquired and Liabilities Assumed Fair Value Cash and cash equivalents $ 5,909 Trade receivables, net 3,106 Inventories 4,164 Prepaid expenses and other current assets 913 Property, plant and equipment, net 131 Goodwill 55,322 Trade name and other intangibles 21,415 Total assets acquired 90,960 Accounts payable 608 Accrued liabilities 844 Income taxes payable 643 Deferred and non-current income taxes payable 3,965 Total liabilities assumed 6,060 Total purchase price $ 84,900 Inventories include a step-up adjustment of approximately $0.8 million, which was expensed over the sell-through cycle of three months. The components of Trade name and other intangibles include a trade name of approximately $12.8 million (amortized over 10 years), and customer relationships of $8.6 million (amortized over 6 years). The Company recorded goodwill of $55.3 million based on the amount by which the purchase price exceeded the fair value of the net assets acquired. Goodwill is not deductible for income tax purposes. The operating results of the Olivia Burton brand have been included in the Company’s Consolidated Financial Statements beginning July 3, 2017. Net sales of the acquired Olivia Burton brand since the date of acquisition through October 31, 2017 were $12.1 million. The Olivia Burton brand’s operating income since the date of acquisition was $4.4 million, which excludes unallocated corporate expenses and expenses incurred in non-UK geographies to support the brand. The following table provides the Company’s unaudited pro forma net sales, net income and net income per basic and diluted common share as if the results of operations of the Olivia Burton brand had been included in the Company’s operations commencing on February 1, 2016, based on available information relating to operations of the Olivia Burton brand. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the Olivia Burton brand acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results. Three Months Ended October 31, Nine Months Ended October 31, 2017 2016 2017 2016 (In thousands, except per share data) (Unaudited) (Unaudited) Net sales $ 190,693 $ 184,749 $ 430,002 $ 432,885 Net income $ 18,479 $ 21,146 $ 24,885 $ 30,814 Basic income per share: Net income per share attributed to Movado Group, Inc. $ 0.80 $ 0.92 $ 1.08 $ 1.34 Diluted income per share: Net income per share attributed to Movado Group, Inc. $ 0.79 $ 0.91 $ 1.07 $ 1.32 The change in the carrying amount of the Company’s goodwill, which is included in the International location of the Wholesale segment, is as follows (in thousands): Total Balance at January 31, 2017 $ — Acquisition of the Olivia Burton brand 55,322 Foreign exchange impact 994 Balance at October 31, 2017 $ 56,316 Trade name and other intangible assets consist of the following (in thousands): As of October 31, 2017 Gross carrying amount Accumulated amortization Foreign exchange Net Intangible assets subject to amortization: Trade name $ 12,766 $ (433) $ 251 $ 12,584 Customer relationships 8,598 (486) 168 8,280 Total intangible assets $ 21,364 $ (919) $ 419 $ 20,864 Estimated amortization expense for the next five years is: $0.7 million for the remaining three months of fiscal 2018, $2.7 million in fiscal years 2019, through 2023 and $6.3 million in total in the years thereafter. |
Net Income Attributed to Movado
Net Income Attributed to Movado Group, Inc. and Transfers to Noncontrolling Interest | 9 Months Ended |
Oct. 31, 2017 | |
Net Income Attributable To Group And Transfers To Noncontrolling Interest [Abstract] | |
Net Income Attributed to Movado Group, Inc. and Transfers to Noncontrolling Interest | NOTE 18 – NET INCOME ATTRIBUTED TO MOVADO GROUP, INC. AND TRANSFERS TO NONCONTROLLING INTEREST The following table summarizes the change from net income attributed to Movado Group, Inc. and transfers to noncontrolling interest (in thousands): Three Months Ended October 31, Nine Months Ended October 31, 2017 2016 2017 2016 Net income attributed to Movado Group, Inc. $ 17,360 $ 20,215 $ 18,683 $ 29,829 Transfers to the noncontrolling interest Decrease in Movado Group, Inc.’s paid in capital for purchase of 10% of MGS common shares — (1,011 ) — (1,011 ) Net transfers to noncontrolling interest — (1,011 ) — (1,011 ) Change from net income attributed to Movado Group, Inc. and transfers to noncontrolling interest $ 17,360 $ 19,204 $ 18,683 $ 28,818 On August 4, 2016, Movado Group, Inc. and Majorelle Limited, an English company (“Majorelle”), voluntarily terminated the joint venture agreement they had entered into on January 30, 2013 (the “JV Agreement”) relating to MGS Distribution Limited, an English company (“MGS”). Under the JV Agreement, the Company and Majorelle owned 90% and 10%, respectively, of the issued and outstanding shares of MGS which was formed to distribute the Company’s licensed watch brands in the United Kingdom. The mutual agreement to terminate the JV Agreement was the result of the Company acquiring the remaining shares in MGS from Majorelle, for the purchase price of $1.7 million, thereby increasing its ownership interest in MGS to 100%. Since August 4, 2016, the Company has accounted for MGS (renamed Movado Group UK Limited in September 2017) as a wholly-owned entity. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Oct. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | NOTE 19 – SUBSEQUENT EVENT On November 6, 2017, the Company announced that it and MGI Luxury Group S.A., a wholly-owned subsidiary of the Company, had entered into an agreement with Hugo Boss Trade Mark Management GmbH & Co. KG pursuant to which the expiration of the existing license agreement for the Hugo Boss brand was extended through December 31, 2023. The agreement also amends certain provisions including minimum sales commitments, royalty rates, marketing and advertising expenditures and other Company obligations. |
Changes to Critical Accountin28
Changes to Critical Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Intangibles | Intangibles In accordance with applicable guidance, the Company estimates and records the fair value of purchased intangible assets at the time of its acquisition, which in the acquisition of the Olivia Burton brand primarily consist of a trade name and customer relationships. The fair values of these intangible assets are estimated based on independent third-party appraisals. Finite-lived intangible assets are amortized over their respective estimated useful lives and are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. Estimates of fair value for finite-lived intangible assets are primarily determined using discounted cash flows, with consideration of market comparisons and recent transactions. This approach uses significant estimates and assumptions, including projected future cash flows, discount rates and growth rates. |
Goodwill | Goodwill At the time of acquisition, in accordance with applicable guidance, the Company records all acquired net assets at their estimated fair values. These estimated fair values are based on management’s assessments and independent third-party appraisals. The excess of the purchase consideration over the aggregate estimated fair values of the acquired net assets is recorded as goodwill. Goodwill is not amortized but will be assessed for impairment at least annually. Under applicable guidance, the Company generally performs its annual goodwill impairment analysis using a qualitative approach to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. If, based on the results of the qualitative assessment, it is concluded that it is more likely than not that the fair value of goodwill is less than its carrying value, a quantitative test is performed. The Company early adopted ASU 2017-04 “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment” (see Note 14 – Accounting Changes and Recent Accounting Pronouncements) on a prospective basis during the second quarter of fiscal 2018 in light of goodwill in the period, associated with the acquisition of the Olivia Burton brand. The quantitative impairment test is performed to measure the amount of impairment loss, if any. The quantitative impairment test identifies the existence of potential impairment by comparing the fair value of each reporting unit with its carrying value, including goodwill. If a reporting unit’s carrying amount exceeds its fair value, the Company will record an impairment charge, as an operating expense item, based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. Determination of the fair value of a reporting unit and the fair value of individual assets and liabilities of a reporting unit is based on management's assessment, including the consideration of independent third-party appraisals when necessary. Furthermore, this determination is subjective in nature and involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge. Estimates of fair value are primarily determined using discounted cash flows, market comparisons, and recent transactions. These approaches use significant estimates and assumptions, including projected future cash flows, discount rates, growth rates, and determination of appropriate market comparisons. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands) as of October 31, 2017 and 2016 and January 31, 2017: Fair Value at October 31, 2017 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities Other current assets $ 291 $ — $ — $ 291 Short-term investment Other current assets 156 — — 156 SERP assets - employer Other non-current assets 1,538 — — 1,538 SERP assets - employee Other non-current assets 35,532 — — 35,532 Hedge derivatives Other current assets — 67 — 67 Total $ 37,517 $ 67 $ — $ 37,584 Liabilities: SERP liabilities - employee Other non-current liabilities $ 35,532 $ — $ — $ 35,532 Hedge derivatives Accrued liabilities — 685 — 685 Total $ 35,532 $ 685 $ — $ 36,217 Fair Value at January 31, 2017 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities Other current assets $ 309 $ — $ — $ 309 Short-term investment Other current assets 154 — — 154 SERP assets - employer Other non-current assets 1,091 — — 1,091 SERP assets - employee Other non-current assets 30,831 — — 30,831 Hedge derivatives Other current assets — 145 — 145 Total $ 32,385 $ 145 $ — $ 32,530 Liabilities: SERP liabilities - employee Other non-current liabilities $ 30,831 $ — $ — $ 30,831 Hedge derivatives Accrued liabilities — 211 — 211 Total $ 30,831 $ 211 $ — $ 31,042 Fair Value at October 31, 2016 Balance Sheet Location Level 1 Level 2 Level 3 Total Assets: Available-for-sale securities Other current assets $ 280 $ — $ — $ 280 Short-term investment Other current assets 150 — — 150 SERP assets - employer Other non-current assets 1,464 — — 1,464 SERP assets - employee Other non-current assets 28,495 — — 28,495 Hedge derivatives Other current assets — 141 — 141 Total $ 30,389 $ 141 $ — $ 30,530 Liabilities: SERP liabilities - employee Other non-current liabilities $ 28,495 $ — $ — $ 28,495 Hedge derivatives Accrued liabilities — 391 — 391 Total $ 28,495 $ 391 $ — $ 28,886 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Equity [Abstract] | |
Components of Equity | The components of equity for the nine months ended October 31, 2017 and 2016 are as follows (in thousands): Movado Group, Inc. Shareholders' Equity Common Stock Class Common Stock Capital Excess Par Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Noncontrolling Interests Total Balance, January 31, 2017 $ 272 $ 66 $ 185,354 $ 415,919 $ (204,398 ) $ 76,780 $ — $ 473,993 Net income 18,683 18,683 Dividends (8,953 ) (8,953 ) Stock repurchase (3,004 ) (3,004 ) Stock options exercised 1 238 (865 ) (626 ) Supplemental executive retirement plan 96 96 Stock-based compensation expense 3,644 3,644 Net unrealized loss on investments, net of tax benefit of $6 (12 ) (12 ) Net change in effective portion of hedging contracts, net of tax of $9 37 37 Foreign currency translation adjustment (3) 3,583 3,583 Balance, October 31, 2017 $ 273 $ 66 $ 189,332 $ 425,649 $ (208,267 ) $ 80,388 $ — $ 487,441 Common Stock Class Common Stock Capital Excess Par Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Noncontrolling Interests Total Balance, January 31, 2016 $ 270 $ 66 $ 178,118 $ 392,788 $ (199,195 ) $ 68,505 $ 595 $ 441,147 Net income 29,829 78 29,907 Dividends (8,951 ) (8,951 ) Stock repurchase (3,263 ) (3,263 ) Stock options exercised, net of tax of $167 1 (86 ) (1,339 ) (1,424 ) Supplemental executive retirement plan 150 150 Stock-based compensation expense 5,663 5,663 Net unrealized gain on investments, net of tax of $1 8 8 Net change in effective portion of hedging contracts, net of tax of $5 31 31 Joint venture incremental share purchase (1,011 ) (649 ) (1,660 ) Foreign currency translation adjustment (3) 8,513 (24 ) 8,489 Balance, October 31, 2016 $ 271 $ 66 $ 182,834 $ 413,666 $ (203,797 ) $ 77,057 $ — $ 470,097 (1) Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders. (2) Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation as amended. The class A common stock is not publicly traded, and consequently, there is currently no established public trading market for these shares. (3) The currency translation adjustment is not adjusted for income taxes to the extent that it relates to permanent investments of earnings in international subsidiaries. |
Segment and Geographic Inform31
Segment and Geographic Information (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Segment Reporting [Abstract] | |
Operating Segment Data | Operating Segment Data for the Three Months Ended October 31, 2017 and 2016 (in thousands): Net Sales 2017 2016 Wholesale: Owned brands category $ 75,138 $ 73,749 Licensed brands category 95,015 86,818 After-sales service and all other 2,159 3,522 Total Wholesale 172,312 164,089 Retail 18,381 15,729 Consolidated total $ 190,693 $ 179,818 Operating Income (3) (4) 2017 2016 Wholesale $ 22,250 $ 28,697 Retail 2,935 2,374 Consolidated total $ 25,185 $ 31,071 Operating Segment Data for the Nine Months Ended October 31, 2017 and 2016 (in thousands): Net Sales 2017 2016 Wholesale: Owned brands category $ 154,620 $ 162,428 Licensed brands category 208,914 205,229 After-sales service and all other 6,956 9,601 Total Wholesale 370,490 377,258 Retail 48,249 44,709 Consolidated total $ 418,739 $ 421,967 Operating Income (3) (4) 2017 2016 Wholesale $ 22,559 $ 39,898 Retail 7,295 6,642 Consolidated total $ 29,854 $ 46,540 Total Assets October 31, 2017 January 31, 2017 October 31, 2016 Wholesale $ 633,101 $ 584,518 $ 600,885 Retail 26,465 23,284 23,593 Consolidated total $ 659,566 $ 607,802 $ 624,478 |
Geographic Segment Data | Geographic Location Data for the Three Months Ended October 31, 2017 and 2016 (in thousands): Net Sales Operating Income (3) (4) 2017 2016 2017 2016 United States (1) $ 85,685 $ 101,854 $ 2,971 $ 14,626 International (2) 105,008 77,964 22,214 16,445 Consolidated total $ 190,693 $ 179,818 $ 25,185 $ 31,071 United States and International net sales are net of intercompany sales of $87.2 million and $75.6 million for the three months ended October 31, 2017 and 2016, respectively. Geographic Location Data for the Nine Months Ended October 31, 2017 and 2016 (in thousands): Net Sales Operating (Loss) / Income (3) (4) 2017 2016 2017 2016 United States (1) $ 192,325 $ 228,734 $ (5,409) $ 12,841 International (2) 226,414 193,233 35,263 33,699 Consolidated total $ 418,739 $ 421,967 $ 29,854 $ 46,540 United States and International net sales are net of intercompany sales of $211.8 million and $231.5 million for the nine months ended October 31, 2017 and 2016, respectively. (1) The United States operating income included $15.8 million and $14.3 million of unallocated corporate expenses for the three months ended October 31, 2017 and 2016, respectively. The United States operating income included $29.2 million and $33.0 million of unallocated corporate expenses for the nine months ended October 31, 2017 and 2016, respectively. (2) The International operating income included $15.7 million and $14.0 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended October 31, 2017 and 2016, respectively. The International operating income included $31.2 million and $30.5 million of certain intercompany profits related to the Company’s supply chain operations for the nine months ended October 31, 2017 and 2016, respectively. (3) In the United States and International locations of the Wholesale segment, for the three months ended October 31, 2017, operating income included a pre-tax charge of $0.1 million and $6.9 million, respectively, as a result of the Company’s cost savings initiatives. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included a pre-tax charge of $3.9 million and $9.5 million, respectively, as a result of the Company’s cost savings initiatives. (4) In the International location of the Wholesale segment, for the three months ended October 31, 2017, operating income included $1.4 million of expenses primarily related to the amortization of acquired assets, as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand. Total Assets October 31, 2017 January 31, 2017 October 31, 2016 United States $ 195,659 $ 207,246 $ 242,881 International 463,907 400,556 381,597 Consolidated total $ 659,566 $ 607,802 $ 624,478 Property, Plant and Equipment, Net October 31, 2017 January 31, 2017 October 31, 2016 United States $ 16,762 $ 19,197 $ 20,307 International 7,875 14,976 14,560 Consolidated total $ 24,637 $ 34,173 $ 34,867 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories consisted of the following (in thousands): October 31, 2017 January 31, 2017 October 31, 2016 Finished goods $ 129,981 $ 112,297 $ 122,721 Component parts 37,920 38,482 43,326 Work-in-process 1,965 2,388 3,355 $ 169,866 $ 153,167 $ 169,402 |
Derivative Financial Instrume33
Derivative Financial Instruments (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Fair Value and Presentation of Derivatives | The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for derivatives (in thousands): Asset Derivatives Liability Derivatives Balance Sheet Location October 31, 2017 Fair Value January 31, 2017 Fair Value October 31, 2016 Fair Value Balance Sheet Location October 31, 2017 Fair Value January 31, 2017 Fair Value October 31, 2016 Fair Value Derivatives not designated as hedging instruments: Foreign Exchange Contracts Other Current Assets $ — $ 145 $ 31 Accrued Liabilities $ 685 $ 211 $ 391 Total Derivative Instruments $ — $ 145 $ 31 $ 685 $ 211 $ 391 Asset Derivatives Liability Derivatives Balance Sheet Location October 31, 2017 Fair Value January 31, 2017 Fair Value October 31, 2016 Fair Value Balance Sheet Location October 31, 2017 Fair Value January 31, 2017 Fair Value October 31, 2016 Fair Value Derivatives designated as hedging instruments: Foreign Exchange Contracts Other Current Assets $ 67 $ — $ 110 Accrued Liabilities $ — $ — $ — Total Derivative Instruments $ 67 $ — $ 110 $ — $ — $ — |
Accumulated Other Comprehensi34
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Income | The components of accumulated other comprehensive income consisted of the following (in thousands): Currency Translation Adjustments Available-for-sale securities Hedging Contracts Total Balance, January 31, 2017 $ 76,569 $ 197 $ 14 $ 76,780 Other comprehensive income / (loss) before reclassifications 3,583 (12 ) 931 4,502 Amounts reclassified from accumulated other comprehensive income (1) — — (894 ) (894) Net current-period other comprehensive income / (loss) 3,583 (12 ) 37 3,608 As of October 31, 2017 $ 80,152 $ 185 $ 51 $ 80,388 Currency Translation Adjustments Available-for-sale securities Hedging Contracts Total Balance, January 31, 2016 $ 68,265 $ 189 $ 51 $ 68,505 Other comprehensive income / (loss) before reclassifications 8,513 8 (15 ) 8,506 Amounts reclassified from accumulated other comprehensive loss (1) — — 46 46 Net current-period other comprehensive income 8,513 8 31 8,552 As of October 31, 2016 $ 76,778 $ 197 $ 82 $ 77,057 (1) Amounts reclassified to earnings in the Consolidated Statements of Operations. |
Operating Efficiency Initiati35
Operating Efficiency Initiatives and Other Items (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Summary of Costs Related to Operating Efficiency Initiatives and Other Items | A summary rollforward of costs related to the operating efficiency initiatives and other items is as follows (in thousands): Balance at January 31, 2017 Cash payments Foreign exchange Accrued balance at October 31, 2017 Severance $ 78 $ (1 ) $ 1 $ 78 Occupancy charges 330 (99 ) 2 233 Total $ 408 $ (100 ) $ 3 $ 311 |
Cost Savings Initiatives (Table
Cost Savings Initiatives (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Summary of Costs Related to Cost Savings Initiatives | A summary roll forward of costs related to the cost savings initiatives is as follows (in thousands): Fiscal 2018 Charges (2) Cash payments Non-cash adjustments Foreign exchange Balance in Accrued Liabilities at October 31, 2017 Severance and payroll related (1) $ 6,061 $ (5,276 ) $ (401 ) $ 67 $ 451 Fixed assets (1) 5,105 — (5,105 ) — — Other (1) 2,172 (73 ) (71 ) (6 ) 2,022 Occupancy charges (1) 99 (22 ) — 6 83 Total $ 13,437 $ (5,371 ) $ (5,577 ) $ 67 $ 2,556 (1) The total severance and payroll related charges of $0.1 million, fixed assets charges of $5.1 million and other charges of $1.8 million are included in SG&A in the Consolidated Statement of Operations for the three months ended October 31, 2017. The total severance and payroll related charges of $6.1 million include $4.7 million in SG&A and $1.4 million in Cost of Sales in the Consolidated Statement of Operations for the nine months ended October 31, 2017. The fixed assets charges of $5.1 million, other charges of $2.2 million and occupancy charges of $0.1 million are included in SG&A in the Consolidated Statement of Operations for the nine months ended October 31, 2017. ( 2 ) The United States and International locations of the Wholesale segment include a pre-tax charge of $0.1 million and $6.9 million, respectively, for the three months ended October 31, 2017. The United States and International locations of the Wholesale segment include a pre-tax charge of $3.9 million and $9.5 million, respectively, for the nine months ended October 31, 2017. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Business Combinations [Abstract] | |
Summary of Fair Value of Assets Acquired and Liabilities Assumed at Acquisition Date | The following table summarizes the fair value of the assets acquired and liabilities assumed as of the July 3, 2017 acquisition date (in thousands): Assets Acquired and Liabilities Assumed Fair Value Cash and cash equivalents $ 5,909 Trade receivables, net 3,106 Inventories 4,164 Prepaid expenses and other current assets 913 Property, plant and equipment, net 131 Goodwill 55,322 Trade name and other intangibles 21,415 Total assets acquired 90,960 Accounts payable 608 Accrued liabilities 844 Income taxes payable 643 Deferred and non-current income taxes payable 3,965 Total liabilities assumed 6,060 Total purchase price $ 84,900 |
Summary of Unaudited Pro Forma Information | The following table provides the Company’s unaudited pro forma net sales, net income and net income per basic and diluted common share as if the results of operations of the Olivia Burton brand had been included in the Company’s operations commencing on February 1, 2016, based on available information relating to operations of the Olivia Burton brand. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the Olivia Burton brand acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results. Three Months Ended October 31, Nine Months Ended October 31, 2017 2016 2017 2016 (In thousands, except per share data) (Unaudited) (Unaudited) Net sales $ 190,693 $ 184,749 $ 430,002 $ 432,885 Net income $ 18,479 $ 21,146 $ 24,885 $ 30,814 Basic income per share: Net income per share attributed to Movado Group, Inc. $ 0.80 $ 0.92 $ 1.08 $ 1.34 Diluted income per share: Net income per share attributed to Movado Group, Inc. $ 0.79 $ 0.91 $ 1.07 $ 1.32 |
Summary of Company's Goodwill by Segment | The change in the carrying amount of the Company’s goodwill, which is included in the International location of the Wholesale segment, is as follows (in thousands): Total Balance at January 31, 2017 $ — Acquisition of the Olivia Burton brand 55,322 Foreign exchange impact 994 Balance at October 31, 2017 $ 56,316 |
Summary of Trade Name and Other Intangible Assets | Trade name and other intangible assets consist of the following (in thousands): As of October 31, 2017 Gross carrying amount Accumulated amortization Foreign exchange Net Intangible assets subject to amortization: Trade name $ 12,766 $ (433) $ 251 $ 12,584 Customer relationships 8,598 (486) 168 8,280 Total intangible assets $ 21,364 $ (919) $ 419 $ 20,864 |
Net Income Attributed to Mova38
Net Income Attributed to Movado Group, Inc. and Transfers to Noncontrolling Interest (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Net Income Attributable To Group And Transfers To Noncontrolling Interest [Abstract] | |
Summary of Net Income Attributed to Movado Group, Inc. and Transfers to Noncontrolling Interest | The following table summarizes the change from net income attributed to Movado Group, Inc. and transfers to noncontrolling interest (in thousands): Three Months Ended October 31, Nine Months Ended October 31, 2017 2016 2017 2016 Net income attributed to Movado Group, Inc. $ 17,360 $ 20,215 $ 18,683 $ 29,829 Transfers to the noncontrolling interest Decrease in Movado Group, Inc.’s paid in capital for purchase of 10% of MGS common shares — (1,011 ) — (1,011 ) Net transfers to noncontrolling interest — (1,011 ) — (1,011 ) Change from net income attributed to Movado Group, Inc. and transfers to noncontrolling interest $ 17,360 $ 19,204 $ 18,683 $ 28,818 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Oct. 31, 2017 | Jan. 31, 2017 | Oct. 31, 2016 |
Assets: | |||
Total assets measured at fair value | $ 37,584 | $ 32,530 | $ 30,530 |
Liabilities: | |||
Total liabilities measured at fair value | 36,217 | 31,042 | 28,886 |
Level 1 | |||
Assets: | |||
Total assets measured at fair value | 37,517 | 32,385 | 30,389 |
Liabilities: | |||
Total liabilities measured at fair value | 35,532 | 30,831 | 28,495 |
Level 2 | |||
Assets: | |||
Total assets measured at fair value | 67 | 145 | 141 |
Liabilities: | |||
Total liabilities measured at fair value | 685 | 211 | 391 |
Other Current Assets | Available-for-sale securities | |||
Assets: | |||
Total assets measured at fair value | 291 | 309 | 280 |
Other Current Assets | Short-term investment | |||
Assets: | |||
Total assets measured at fair value | 156 | 154 | 150 |
Other Current Assets | Hedge derivatives-Assets | |||
Assets: | |||
Total assets measured at fair value | 67 | 145 | 141 |
Other Current Assets | Level 1 | Available-for-sale securities | |||
Assets: | |||
Total assets measured at fair value | 291 | 309 | 280 |
Other Current Assets | Level 1 | Short-term investment | |||
Assets: | |||
Total assets measured at fair value | 156 | 154 | 150 |
Other Current Assets | Level 2 | Hedge derivatives-Assets | |||
Assets: | |||
Total assets measured at fair value | 67 | 145 | 141 |
Other non-current assets | SERP assets - employer | |||
Assets: | |||
Total assets measured at fair value | 1,538 | 1,091 | 1,464 |
Other non-current assets | SERP assets - employee | |||
Assets: | |||
Total assets measured at fair value | 35,532 | 30,831 | 28,495 |
Other non-current assets | Level 1 | SERP assets - employer | |||
Assets: | |||
Total assets measured at fair value | 1,538 | 1,091 | 1,464 |
Other non-current assets | Level 1 | SERP assets - employee | |||
Assets: | |||
Total assets measured at fair value | 35,532 | 30,831 | 28,495 |
Other non-current liabilities | SERP liabilities - employee | |||
Liabilities: | |||
Total liabilities measured at fair value | 35,532 | 30,831 | 28,495 |
Other non-current liabilities | Level 1 | SERP liabilities - employee | |||
Liabilities: | |||
Total liabilities measured at fair value | 35,532 | 30,831 | 28,495 |
Accrued Liabilities | Hedge derivatives-Liabilities | |||
Liabilities: | |||
Total liabilities measured at fair value | 685 | 211 | 391 |
Accrued Liabilities | Level 2 | Hedge derivatives-Liabilities | |||
Liabilities: | |||
Total liabilities measured at fair value | $ 685 | $ 211 | $ 391 |
Fair Value Measurements (Deta40
Fair Value Measurements (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Other than temporary impairment charge on investment | $ 1,282,000 | ||
Cost method investments, carrying value | $ 0 | $ 0 | |
Other Expense | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Other than temporary impairment charge on investment | $ 1,300,000 | ||
Short-term investment | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |||
Fair value, investment | The fair value of the short-term investment, which is a guaranteed investment certificate, is based on its purchase price plus one half of a percent calculated annually |
Equity (Details)
Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | ||||
Beginning Balance | $ 473,993 | $ 441,147 | |||||
Net income | $ 17,360 | $ 20,215 | 18,683 | 29,907 | |||
Dividends | (8,953) | (8,951) | |||||
Stock repurchase | (3,004) | (3,263) | |||||
Stock options exercised | (626) | ||||||
Stock options exercised, net of tax | (1,424) | ||||||
Supplemental executive retirement plan | 96 | 150 | |||||
Stock-based compensation expense | 3,644 | 5,663 | |||||
Net unrealized (loss) gain on investments, net of (benefit) tax | (13) | 6 | (12) | 8 | |||
Net change in effective portion of hedging contracts, net of tax | 448 | (43) | 37 | 31 | |||
Joint venture incremental share purchase | (1,660) | ||||||
Foreign currency translation adjustments | (5,525) | (6,319) | 3,583 | [1] | 8,489 | [1] | |
Ending Balance | 487,441 | 470,097 | 487,441 | 470,097 | |||
Common Stock Class Undefined | |||||||
Beginning Balance | [2] | 272 | 270 | ||||
Stock options exercised | [2] | 1 | |||||
Stock options exercised, net of tax | [2] | 1 | |||||
Ending Balance | [2] | 273 | 271 | 273 | 271 | ||
Class A Common Stock | |||||||
Beginning Balance | [3] | 66 | 66 | ||||
Ending Balance | [3] | 66 | 66 | 66 | 66 | ||
Capital in Excess of Par Value | |||||||
Beginning Balance | 185,354 | 178,118 | |||||
Stock options exercised | 238 | ||||||
Stock options exercised, net of tax | (86) | ||||||
Supplemental executive retirement plan | 96 | 150 | |||||
Stock-based compensation expense | 3,644 | 5,663 | |||||
Joint venture incremental share purchase | (1,011) | ||||||
Ending Balance | 189,332 | 182,834 | 189,332 | 182,834 | |||
Retained Earnings | |||||||
Beginning Balance | 415,919 | 392,788 | |||||
Net income | 18,683 | 29,829 | |||||
Dividends | (8,953) | (8,951) | |||||
Ending Balance | 425,649 | 413,666 | 425,649 | 413,666 | |||
Treasury Stock | |||||||
Beginning Balance | (204,398) | (199,195) | |||||
Stock repurchase | (3,004) | (3,263) | |||||
Stock options exercised | (865) | ||||||
Stock options exercised, net of tax | (1,339) | ||||||
Ending Balance | (208,267) | (203,797) | (208,267) | (203,797) | |||
Accumulated Other Comprehensive Income | |||||||
Beginning Balance | 76,780 | 68,505 | |||||
Net unrealized (loss) gain on investments, net of (benefit) tax | (12) | 8 | |||||
Net change in effective portion of hedging contracts, net of tax | 37 | 31 | |||||
Foreign currency translation adjustments | [1] | 3,583 | 8,513 | ||||
Ending Balance | $ 80,388 | $ 77,057 | $ 80,388 | 77,057 | |||
Noncontrolling Interests | |||||||
Beginning Balance | 595 | ||||||
Net income | 78 | ||||||
Joint venture incremental share purchase | (649) | ||||||
Foreign currency translation adjustments | [1] | $ (24) | |||||
[1] | The currency translation adjustment is not adjusted for income taxes to the extent that it relates to permanent investments of earnings in international subsidiaries. | ||||||
[2] | Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders. | ||||||
[3] | Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation as amended. The class A common stock is not publicly traded, and consequently, there is currently no established public trading market for these shares. |
Equity (Details) (Parenthetical
Equity (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Stock options exercised, tax | $ 167 | |||
Net unrealized (loss) gain on investments, (benefit) tax | $ (6) | $ 4 | $ (6) | 1 |
Net change in effective portion of hedging contracts, tax | $ 88 | $ (9) | $ 9 | $ 5 |
Common Stock Class Undefined | ||||
Common Stock, Voting Rights | Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders. | |||
Class A Common Stock | ||||
Common Stock, Voting Rights | Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. | |||
Common stock, Conversion basis | Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation as amended. |
Segment and Geographic Inform43
Segment and Geographic Information (Details Textual) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Oct. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Oct. 31, 2017USD ($)SegmentLocation | Oct. 31, 2016USD ($) | Jan. 31, 2016USD ($) | ||
Segment Reporting Information [Line Items] | ||||||
Number of operating segments | Segment | 2 | |||||
Number of geographic locations | Location | 2 | |||||
Net sales | $ 190,693 | $ 179,818 | $ 418,739 | $ 421,967 | ||
Unallocated corporate expenses | 15,800 | 14,300 | 29,200 | 33,000 | ||
Profits related to the company's supply chain operations | 15,700 | 14,000 | 31,200 | 30,500 | ||
Pre-tax charges | $ 4,000 | |||||
Wholesale | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 172,312 | 164,089 | 370,490 | 377,258 | ||
Intersegment Eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 87,200 | 75,600 | 211,800 | 231,500 | ||
United States | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | [1] | 85,685 | 101,854 | 192,325 | 228,734 | |
United States | Wholesale | ||||||
Segment Reporting Information [Line Items] | ||||||
Expenses primarily related to integration / transaction costs and adjustments in acquisition accounting | 200 | |||||
United States | Wholesale | Cost Savings Initiatives | ||||||
Segment Reporting Information [Line Items] | ||||||
Pre-tax charges | 100 | 3,900 | ||||
International | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | [2] | 105,008 | $ 77,964 | 226,414 | $ 193,233 | |
International | Wholesale | ||||||
Segment Reporting Information [Line Items] | ||||||
Expenses primarily related to integration / transaction costs and adjustments in acquisition accounting | 5,700 | |||||
Expenses primarily related to amortization of acquired assets | 1,400 | |||||
International | Wholesale | Cost Savings Initiatives | ||||||
Segment Reporting Information [Line Items] | ||||||
Pre-tax charges | $ 6,900 | $ 9,500 | ||||
Geographic Concentration Risk | Europe | Total net sales | ||||||
Segment Reporting Information [Line Items] | ||||||
International Operations Contribution | 35.70% | 23.50% | 31.70% | 23.10% | ||
Geographic Concentration Risk | the Americas (excluding the United States) | Total net sales | ||||||
Segment Reporting Information [Line Items] | ||||||
International Operations Contribution | 8.40% | 7.30% | 9.40% | 8.40% | ||
Geographic Concentration Risk | Middle East | Total net sales | ||||||
Segment Reporting Information [Line Items] | ||||||
International Operations Contribution | 6.50% | 7.20% | 7.80% | 8.40% | ||
Geographic Concentration Risk | Asia | Total net sales | ||||||
Segment Reporting Information [Line Items] | ||||||
International Operations Contribution | 4.50% | 5.40% | 5.20% | 5.90% | ||
[1] | The United States operating income included $15.8 million and $14.3 million of unallocated corporate expenses for the three months ended October 31, 2017 and 2016, respectively. The United States operating income included $29.2 million and $33.0 million of unallocated corporate expenses for the nine months ended October 31, 2017 and 2016, respectively. | |||||
[2] | The International operating income included $15.7 million and $14.0 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended October 31, 2017 and 2016, respectively. The International operating income included $31.2 million and $30.5 million of certain intercompany profits related to the Company’s supply chain operations for the nine months ended October 31, 2017 and 2016, respectively. |
Segment and Geographic Inform44
Segment and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Jan. 31, 2017 | ||
Operating segment data | ||||||
Net sales | $ 190,693 | $ 179,818 | $ 418,739 | $ 421,967 | ||
Operating Income | [1],[2] | 25,185 | 31,071 | 29,854 | 46,540 | |
Total Assets | 659,566 | 624,478 | 659,566 | 624,478 | $ 607,802 | |
Wholesale | ||||||
Operating segment data | ||||||
Net sales | 172,312 | 164,089 | 370,490 | 377,258 | ||
Operating Income | [1],[2] | 22,250 | 28,697 | 22,559 | 39,898 | |
Total Assets | 633,101 | 600,885 | 633,101 | 600,885 | 584,518 | |
Wholesale | Owned brands category | ||||||
Operating segment data | ||||||
Net sales | 75,138 | 73,749 | 154,620 | 162,428 | ||
Wholesale | Licensed brands category | ||||||
Operating segment data | ||||||
Net sales | 95,015 | 86,818 | 208,914 | 205,229 | ||
Wholesale | After-sales service and all other | ||||||
Operating segment data | ||||||
Net sales | 2,159 | 3,522 | 6,956 | 9,601 | ||
Retail | ||||||
Operating segment data | ||||||
Net sales | 18,381 | 15,729 | 48,249 | 44,709 | ||
Operating Income | [1],[2] | 2,935 | 2,374 | 7,295 | 6,642 | |
Total Assets | $ 26,465 | $ 23,593 | $ 26,465 | $ 23,593 | $ 23,284 | |
[1] | In the International location of the Wholesale segment, for the three months ended October 31, 2017, operating income included $1.4 million of expenses primarily related to the amortization of acquired assets, as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand. | |||||
[2] | In the United States and International locations of the Wholesale segment, for the three months ended October 31, 2017, operating income included a pre-tax charge of $0.1 million and $6.9 million, respectively, as a result of the Company’s cost savings initiatives. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included a pre-tax charge of $3.9 million and $9.5 million, respectively, as a result of the Company’s cost savings initiatives. |
Segment and Geographic Inform45
Segment and Geographic Information (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Jan. 31, 2017 | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||||
Net sales | $ 190,693 | $ 179,818 | $ 418,739 | $ 421,967 | ||
Operating (Loss) / Income | [1],[2] | 25,185 | 31,071 | 29,854 | 46,540 | |
Total Assets | 659,566 | 624,478 | 659,566 | 624,478 | $ 607,802 | |
Property, Plant and Equipment, Net | 24,637 | 34,867 | 24,637 | 34,867 | 34,173 | |
United States | ||||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||||
Net sales | [3] | 85,685 | 101,854 | 192,325 | 228,734 | |
Operating (Loss) / Income | [1],[2],[3] | 2,971 | 14,626 | (5,409) | 12,841 | |
Total Assets | 195,659 | 242,881 | 195,659 | 242,881 | 207,246 | |
Property, Plant and Equipment, Net | 16,762 | 20,307 | 16,762 | 20,307 | 19,197 | |
International | ||||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||||
Net sales | [4] | 105,008 | 77,964 | 226,414 | 193,233 | |
Operating (Loss) / Income | [1],[2],[4] | 22,214 | 16,445 | 35,263 | 33,699 | |
Total Assets | 463,907 | 381,597 | 463,907 | 381,597 | 400,556 | |
Property, Plant and Equipment, Net | $ 7,875 | $ 14,560 | $ 7,875 | $ 14,560 | $ 14,976 | |
[1] | In the International location of the Wholesale segment, for the three months ended October 31, 2017, operating income included $1.4 million of expenses primarily related to the amortization of acquired assets, as a result of the Company’s acquisition of the Olivia Burton brand. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included $0.2 million and $5.7 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s acquisition of the Olivia Burton brand. | |||||
[2] | In the United States and International locations of the Wholesale segment, for the three months ended October 31, 2017, operating income included a pre-tax charge of $0.1 million and $6.9 million, respectively, as a result of the Company’s cost savings initiatives. In the United States and International locations of the Wholesale segment, for the nine months ended October 31, 2017, operating (loss) / income included a pre-tax charge of $3.9 million and $9.5 million, respectively, as a result of the Company’s cost savings initiatives. | |||||
[3] | The United States operating income included $15.8 million and $14.3 million of unallocated corporate expenses for the three months ended October 31, 2017 and 2016, respectively. The United States operating income included $29.2 million and $33.0 million of unallocated corporate expenses for the nine months ended October 31, 2017 and 2016, respectively. | |||||
[4] | The International operating income included $15.7 million and $14.0 million of certain intercompany profits related to the Company’s supply chain operations for the three months ended October 31, 2017 and 2016, respectively. The International operating income included $31.2 million and $30.5 million of certain intercompany profits related to the Company’s supply chain operations for the nine months ended October 31, 2017 and 2016, respectively. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Jan. 31, 2017 | Oct. 31, 2016 |
Inventory Net [Abstract] | |||
Finished goods | $ 129,981 | $ 112,297 | $ 122,721 |
Component parts | 37,920 | 38,482 | 43,326 |
Work-in-process | 1,965 | 2,388 | 3,355 |
Inventories | $ 169,866 | $ 153,167 | $ 169,402 |
Debt and Lines of Credit (Detai
Debt and Lines of Credit (Details Textual) | 9 Months Ended | |||||
Oct. 31, 2017USD ($)CreditFacilityBankSubsidiary | Oct. 31, 2017CHF (SFr)CreditFacilityBankSubsidiary | Jan. 31, 2017USD ($) | Oct. 31, 2016USD ($)BankSubsidiary | Oct. 31, 2016CHF (SFr)BankSubsidiary | Jan. 30, 2015USD ($) | |
Debt Instrument [Line Items] | ||||||
Outstanding balance under facility, current | $ 5,000,000 | $ 5,000,000 | $ 3,000,000 | |||
Number of issued standby letter of credit | CreditFacility | 2 | 2 | ||||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated Earnings Before Interest Tax Depreciation And Amortization | $ 50,000,000 | |||||
Secured Debt | Credit Agreement Due on January 30, 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Letter of credit outstanding amount | $ 300,000 | |||||
Secured Debt | Credit Agreement Due on January 30, 2020 | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated leverage ratio | 2.50% | 2.50% | ||||
Unsecured Debt | Swiss subsidiary | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 6,500,000 | SFr 6,500,000 | 6,400,000 | SFr 6,500,000 | ||
Outstanding borrowing amount | $ 0 | $ 0 | ||||
Revolving Credit Facility | Secured Debt | Credit Agreement Due on January 30, 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |||||
Uncommitted increase to borrowing capacity | 50,000,000 | |||||
Credit facility matures date | Jan. 30, 2020 | |||||
Loan drawn under the facility | $ 30,000,000 | |||||
Line of credit facility remaining borrowing capacity | 69,700,000 | |||||
Outstanding balance under facility, current | $ 5,000,000 | |||||
Revolving Credit Facility | Secured Debt | Credit Agreement Due on January 30, 2020 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rate | 1.25% | |||||
Revolving Credit Facility | Secured Debt | Credit Agreement Due on January 30, 2020 | LIBOR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rate | 1.25% | |||||
Revolving Credit Facility | Secured Debt | Credit Agreement Due on January 30, 2020 | LIBOR | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rate | 1.75% | |||||
Revolving Credit Facility | Secured Debt | Credit Agreement Due on January 30, 2020 | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rate | 0.25% | |||||
Revolving Credit Facility | Secured Debt | Credit Agreement Due on January 30, 2020 | Base Rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rate | 0.25% | |||||
Revolving Credit Facility | Secured Debt | Credit Agreement Due on January 30, 2020 | Base Rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rate | 0.75% | |||||
Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility matures date | May 31, 2018 | |||||
Outstanding borrowing amount | $ 300,000 | |||||
Letter of Credit | Secured Debt | Credit Agreement Due on January 30, 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 15,000,000 | |||||
Line of Credit | Unsecured Debt | Swiss subsidiary | ||||||
Debt Instrument [Line Items] | ||||||
Number of European banks guaranteed obligations to third parties | Bank | 2 | 2 | 2 | 2 | ||
Number of foreign subsidiaries under guaranteed obligation | Subsidiary | 2 | 2 | 2 | 2 | ||
Guaranteed obligations to third parties | $ 1,100,000 | $ 1,200,000 | ||||
Restricted deposit relates to lease agreement | $ 500,000 | $ 600,000 |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Earnings Per Share [Abstract] | ||||
Weighted basic average shares outstanding | 23,079,000 | 23,055,000 | 23,080,000 | 23,074,000 |
Increase in number of shares outstanding for diluted earnings per share | 194,000 | 175,000 | 181,000 | 185,000 |
Dilutive common stock equivalents were excluded from the computation of diluted earnings per share | 798,000 | 862,000 | 803,000 | 790,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Dec. 31, 2016 | Jul. 31, 2017 | |
Loss Contingencies [Line Items] | ||
Underpaid duty charges due to alternative duty methodology | $ 5.1 | |
Underpaid duty methodology period covered by statute of limitation | 5 years | |
Other Current Assets | ||
Loss Contingencies [Line Items] | ||
Restricted cash deposits released | $ 1 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 7,490,000 | $ 9,286,000 | $ 10,341,000 | $ 14,450,000 |
Effective tax rate for continuing operations | 30.10% | 31.50% | 35.60% | 32.60% |
Income tax benefit from foreign operations | $ 0 | $ 0 | $ 0 | $ 0 |
U.S. statutory tax rate | 35.00% | 35.00% | 35.00% | 35.00% |
Derivative Financial Instrume51
Derivative Financial Instruments (Details Textual) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Oct. 31, 2017USD ($) | Oct. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Oct. 31, 2017CHF (SFr) | Oct. 31, 2017EUR (€) | Oct. 31, 2017GBP (£) | ||||
Derivatives Fair Value [Line Items] | |||||||||
Maximum length of time hedged in cash flow hedge | 24 months | ||||||||
Amounts reclassified from accumulated other comprehensive income | [1] | $ 894 | $ (46) | ||||||
Net Unrealized Income (Loss) On Hedging Contracts | |||||||||
Derivatives Fair Value [Line Items] | |||||||||
Amounts reclassified from accumulated other comprehensive income | $ 400 | 894 | [1] | $ (46) | [1] | ||||
Accumulated other comprehensive income, tax | $ 100 | $ 200 | |||||||
Foreign Exchange Forward | |||||||||
Derivatives Fair Value [Line Items] | |||||||||
Net forward contracts hedging portfolio | SFr 23,000,000 | € 12,800,000 | £ 11,300,000 | ||||||
Maximum | |||||||||
Derivatives Fair Value [Line Items] | |||||||||
Expiry dates ranging | Apr. 10, 2018 | ||||||||
[1] | Amounts reclassified to earnings in the Consolidated Statements of Operations. |
Derivative Financial Instrume52
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Jan. 31, 2017 | Oct. 31, 2016 |
Designated as Hedging Instrument | |||
Fair value and presentation of derivatives | |||
Asset Derivatives | $ 67 | $ 110 | |
Designated as Hedging Instrument | Foreign Exchange Contract | Other Current Assets | |||
Fair value and presentation of derivatives | |||
Asset Derivatives | 67 | 110 | |
Not Designated as Hedging Instrument | |||
Fair value and presentation of derivatives | |||
Asset Derivatives | $ 145 | 31 | |
Liability Derivatives | 685 | 211 | 391 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Other Current Assets | |||
Fair value and presentation of derivatives | |||
Asset Derivatives | 145 | 31 | |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | |||
Fair value and presentation of derivatives | |||
Liability Derivatives | $ 685 | $ 211 | $ 391 |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2017 | Oct. 31, 2017 | Oct. 31, 2016 | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | $ 473,993 | |||||
Other comprehensive income / (loss) before reclassifications | 4,502 | $ 8,506 | ||||
Amounts reclassified from accumulated other comprehensive (income) loss | [1] | (894) | 46 | |||
Net current-period other comprehensive income / (loss) | 3,608 | 8,552 | ||||
Ending Balance | $ 487,441 | 487,441 | 470,097 | |||
Currency Translation Adjustments | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | 76,569 | 68,265 | ||||
Other comprehensive income / (loss) before reclassifications | 3,583 | 8,513 | ||||
Net current-period other comprehensive income / (loss) | 3,583 | 8,513 | ||||
Ending Balance | 80,152 | 80,152 | 76,778 | |||
Available-for-sale securities | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | 197 | 189 | ||||
Other comprehensive income / (loss) before reclassifications | (12) | 8 | ||||
Net current-period other comprehensive income / (loss) | (12) | 8 | ||||
Ending Balance | 185 | 185 | 197 | |||
Hedging Contracts | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | 14 | 51 | ||||
Other comprehensive income / (loss) before reclassifications | 931 | (15) | ||||
Amounts reclassified from accumulated other comprehensive (income) loss | (400) | (894) | [1] | 46 | [1] | |
Net current-period other comprehensive income / (loss) | 37 | 31 | ||||
Ending Balance | 51 | 51 | 82 | |||
Accumulated Other Comprehensive Income | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning Balance | 76,780 | 68,505 | ||||
Ending Balance | $ 80,388 | $ 80,388 | $ 77,057 | |||
[1] | Amounts reclassified to earnings in the Consolidated Statements of Operations. |
Treasury Stock (Details Textual
Treasury Stock (Details Textual) - USD ($) | Aug. 29, 2017 | Oct. 31, 2017 | Oct. 31, 2016 | Mar. 31, 2016 |
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program, total cost of shares repurchased | $ 3,004,000 | $ 3,263,000 | ||
New Share Repurchase Program | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program, number of shares authorized | $ 50,000,000 | |||
Stock repurchase program expiration date | Aug. 29, 2020 | |||
Previously Authorized Repurchase Plan | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program, number of shares authorized | $ 50,000,000 | |||
Stock repurchase program, number of shares repurchased | 137,499 | |||
Stock repurchase program, total cost of shares repurchased | $ 3,300,000 | |||
Stock repurchase program, average per share price of shares repurchased | $ 23.73 | |||
New and Previously Authorized Repurchase Plans | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program, number of shares repurchased | 120,507 | |||
Stock repurchase program, total cost of shares repurchased | $ 3,000,000 | |||
Stock repurchase program, average per share price of shares repurchased | $ 24.93 | |||
Surrender of Shares by Employee | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program, number of shares repurchased | 36,843 | 47,310 | ||
Movado Group Foundation | Previously Authorized Repurchase Plan | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program, number of shares repurchased | 15,000 | |||
Stock repurchase program, total cost of shares repurchased | $ 400,000 | |||
Stock repurchase program, average per share price of shares repurchased | $ 27.67 | |||
Movado Group Foundation | New and Previously Authorized Repurchase Plans | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program, number of shares repurchased | 20,000 | |||
Stock repurchase program, total cost of shares repurchased | $ 500,000 | |||
Stock repurchase program, average per share price of shares repurchased | $ 22.90 |
Operating Efficiency Initiati55
Operating Efficiency Initiatives and Other Items (Details Textual) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Jan. 31, 2016 | |
Restructuring And Related Activities [Abstract] | ||
Pre-tax charges | $ 4 | |
Operating efficiency initiatives and other items, completion date | Jan. 31, 2016 |
Operating Efficiency Initiati56
Operating Efficiency Initiatives and Other Items (Details) $ in Thousands | 9 Months Ended |
Oct. 31, 2017USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Balance at January 31, 2017 | $ 408 |
Cash payments | (100) |
Foreign exchange | 3 |
Accrued balance at October 31, 2017 | 311 |
Severance | |
Restructuring Cost And Reserve [Line Items] | |
Balance at January 31, 2017 | 78 |
Cash payments | (1) |
Foreign exchange | 1 |
Accrued balance at October 31, 2017 | 78 |
Occupancy charges | |
Restructuring Cost And Reserve [Line Items] | |
Balance at January 31, 2017 | 330 |
Cash payments | (99) |
Foreign exchange | 2 |
Accrued balance at October 31, 2017 | $ 233 |
Cost Savings Initiatives (Detai
Cost Savings Initiatives (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Oct. 31, 2017 | ||
Restructuring Cost And Reserve [Line Items] | |||||
Cost savings initiative | $ 13,437 | ||||
Cost Savings Initiatives | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Cost savings initiative | $ 7,000 | $ 100 | $ 6,300 | $ 13,437 | [1] |
[1] | The United States and International locations of the Wholesale segment include a pre-tax charge of $0.1 million and $6.9 million, respectively, for the three months ended October 31, 2017. The United States and International locations of the Wholesale segment include a pre-tax charge of $3.9 million and $9.5 million, respectively, for the nine months ended October 31, 2017. |
Cost Savings Initiatives (Det58
Cost Savings Initiatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Oct. 31, 2017 | Jan. 31, 2017 | |||
Restructuring Cost And Reserve [Line Items] | |||||||
Fiscal 2018 Charges | $ 13,437 | ||||||
Cash payments | (100) | ||||||
Foreign exchange | 3 | ||||||
Balance in Accrued Liabilities at October 31, 2017 | $ 311 | 311 | $ 408 | ||||
Occupancy charges | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Cash payments | (99) | ||||||
Foreign exchange | 2 | ||||||
Balance in Accrued Liabilities at October 31, 2017 | 233 | 233 | $ 330 | ||||
Cost Savings Initiatives | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Fiscal 2018 Charges | 7,000 | $ 100 | $ 6,300 | 13,437 | [1] | ||
Cash payments | (5,371) | ||||||
Non-cash adjustments | (5,577) | ||||||
Foreign exchange | 67 | ||||||
Balance in Accrued Liabilities at October 31, 2017 | 2,556 | 2,556 | |||||
Cost Savings Initiatives | Severance and Payroll Related | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Fiscal 2018 Charges | [1],[2] | 6,061 | |||||
Cash payments | [2] | (5,276) | |||||
Non-cash adjustments | [2] | (401) | |||||
Foreign exchange | [2] | 67 | |||||
Balance in Accrued Liabilities at October 31, 2017 | [2] | 451 | 451 | ||||
Cost Savings Initiatives | Fixed Assets | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Fiscal 2018 Charges | [1],[2] | 5,105 | |||||
Non-cash adjustments | [2] | (5,105) | |||||
Cost Savings Initiatives | Other | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Fiscal 2018 Charges | [1],[2] | 2,172 | |||||
Cash payments | [2] | (73) | |||||
Non-cash adjustments | [2] | (71) | |||||
Foreign exchange | [2] | (6) | |||||
Balance in Accrued Liabilities at October 31, 2017 | [2] | 2,022 | 2,022 | ||||
Cost Savings Initiatives | Occupancy charges | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Fiscal 2018 Charges | [1],[2] | 99 | |||||
Cash payments | [2] | (22) | |||||
Foreign exchange | [2] | 6 | |||||
Balance in Accrued Liabilities at October 31, 2017 | [2] | $ 83 | $ 83 | ||||
[1] | The United States and International locations of the Wholesale segment include a pre-tax charge of $0.1 million and $6.9 million, respectively, for the three months ended October 31, 2017. The United States and International locations of the Wholesale segment include a pre-tax charge of $3.9 million and $9.5 million, respectively, for the nine months ended October 31, 2017. | ||||||
[2] | The total severance and payroll related charges of $0.1 million, fixed assets charges of $5.1 million and other charges of $1.8 million are included in SG&A in the Consolidated Statement of Operations for the three months ended October 31, 2017. The total severance and payroll related charges of $6.1 million include $4.7 million in SG&A and $1.4 million in Cost of Sales in the Consolidated Statement of Operations for the nine months ended October 31, 2017. The fixed assets charges of $5.1 million, other charges of $2.2 million and occupancy charges of $0.1 million are included in SG&A in the Consolidated Statement of Operations for the nine months ended October 31, 2017. |
Cost Savings Initiatives (Det59
Cost Savings Initiatives (Details) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Oct. 31, 2017 | Jan. 31, 2016 | |
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | $ 4 | ||
Cost Savings Initiatives | United States | Wholesale | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | $ 0.1 | $ 3.9 | |
Cost Savings Initiatives | International | Wholesale | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | 6.9 | 9.5 | |
Cost Savings Initiatives | Severance and Payroll Related | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | 6.1 | ||
Cost Savings Initiatives | Severance and Payroll Related | SG&A | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | 0.1 | 4.7 | |
Cost Savings Initiatives | Severance and Payroll Related | Cost of Sales | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | 1.4 | ||
Cost Savings Initiatives | Fixed Assets | SG&A | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | 5.1 | 5.1 | |
Cost Savings Initiatives | Other | SG&A | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | $ 1.8 | 2.2 | |
Cost Savings Initiatives | Occupancy charges | SG&A | |||
Restructuring Cost And Reserve [Line Items] | |||
Pre-tax charges | $ 0.1 |
Acquisitions (Details Textual)
Acquisitions (Details Textual) £ in Millions | Jul. 03, 2017USD ($) | Jul. 03, 2017GBP (£) | Oct. 31, 2017USD ($) | Oct. 31, 2017USD ($) | Oct. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||
Business acquisition, net of cash acquired | $ 78,991,000 | ||||
Goodwill | $ 56,316,000 | $ 56,316,000 | 56,316,000 | ||
Trade Name | |||||
Business Acquisition [Line Items] | |||||
Business combination recognized intangible assets | $ 12,800,000 | ||||
Intangible asset amortization period | 10 years | 10 years | |||
Customer Relationships | |||||
Business Acquisition [Line Items] | |||||
Business combination recognized intangible assets | $ 8,600,000 | ||||
Intangible asset amortization period | 6 years | 6 years | |||
United States | Wholesale | |||||
Business Acquisition [Line Items] | |||||
Expenses primarily related to transaction costs and adjustments in acquisition accounting | 200,000 | ||||
International | Wholesale | |||||
Business Acquisition [Line Items] | |||||
Expenses primarily related to transaction costs and adjustments in acquisition accounting | 5,700,000 | ||||
Expenses primarily related to amortization of acquired assets | 1,400,000 | ||||
Olivia Burton Brand | |||||
Business Acquisition [Line Items] | |||||
Inventories step-up adjustment | $ 800,000 | ||||
Inventories step-up adjustment expensed over sell-through cycle | 3 months | 3 months | |||
Business combination recognized intangible assets | $ 21,415,000 | ||||
Goodwill | 55,322,000 | 56,316,000 | 56,316,000 | 56,316,000 | |
Net sales since acquisition date | 12,100,000 | ||||
Operating income since acquisition date | 4,400,000 | ||||
Estimated amortization expense, remainder of fiscal year 2018 | 700,000 | 700,000 | 700,000 | ||
Estimated amortization expense, fiscal year 2019 | 2,700,000 | 2,700,000 | 2,700,000 | ||
Estimated amortization expense, fiscal year 2020 | 2,700,000 | 2,700,000 | 2,700,000 | ||
Estimated amortization expense, fiscal year 2021 | 2,700,000 | 2,700,000 | 2,700,000 | ||
Estimated amortization expense, fiscal year 2022 | 2,700,000 | 2,700,000 | 2,700,000 | ||
Estimated amortization expense, fiscal year 2023 | 2,700,000 | 2,700,000 | 2,700,000 | ||
Estimated amortization expense, total in the years thereafter | $ 6,300,000 | $ 6,300,000 | $ 6,300,000 | ||
Olivia Burton Brand | JLB Brands Ltd | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, purchase price in cash subject to working capital and other closing adjustments | 78,200,000 | £ 60 | |||
Business acquisition, net of cash acquired | 79,000,000 | 60.7 | |||
Business acquisition, cash acquired | 5,900,000 | £ 4.5 | |||
Business acquisition, debt assumed | $ 0 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Jul. 03, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 56,316 | |
Olivia Burton Brand | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | $ 5,909 | |
Trade receivables, net | 3,106 | |
Inventories | 4,164 | |
Prepaid expenses and other current assets | 913 | |
Property, plant and equipment, net | 131 | |
Goodwill | $ 56,316 | 55,322 |
Trade name and other intangibles | 21,415 | |
Total assets acquired | 90,960 | |
Accounts payable | 608 | |
Accrued liabilities | 844 | |
Income taxes payable | 643 | |
Deferred and non-current income taxes payable | 3,965 | |
Total liabilities assumed | 6,060 | |
Total purchase price | $ 84,900 |
Acquisitions (Details 1)
Acquisitions (Details 1) - Olivia Burton Brand - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Business Acquisition [Line Items] | ||||
Net sales | $ 190,693 | $ 184,749 | $ 430,002 | $ 432,885 |
Net income | $ 18,479 | $ 21,146 | $ 24,885 | $ 30,814 |
Net income per share attributed to Movado Group, Inc. | $ 0.80 | $ 0.92 | $ 1.08 | $ 1.34 |
Net income per share attributed to Movado Group, Inc. | $ 0.79 | $ 0.91 | $ 1.07 | $ 1.32 |
Acquisitions (Details 2)
Acquisitions (Details 2) $ in Thousands | 9 Months Ended |
Oct. 31, 2017USD ($) | |
Business Combination Segment Allocation [Line Items] | |
Ending Balance | $ 56,316 |
Olivia Burton Brand | |
Business Combination Segment Allocation [Line Items] | |
Acquisition of the Olivia Burton brand | 55,322 |
Foreign exchange impact | 994 |
Ending Balance | $ 56,316 |
Acquisitions (Details 3)
Acquisitions (Details 3) - Olivia Burton Brand $ in Thousands | 9 Months Ended |
Oct. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |
Gross carrying amount | $ 21,364 |
Accumulated amortization | (919) |
Foreign exchange | 419 |
Net | 20,864 |
Trade Name | |
Business Acquisition [Line Items] | |
Gross carrying amount | 12,766 |
Accumulated amortization | (433) |
Foreign exchange | 251 |
Net | 12,584 |
Customer Relationships | |
Business Acquisition [Line Items] | |
Gross carrying amount | 8,598 |
Accumulated amortization | (486) |
Foreign exchange | 168 |
Net | $ 8,280 |
Net Income Attributed to Mova65
Net Income Attributed to Movado Group, Inc. and Transfers to Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Schedule of net income attributable to non controlling interest | ||||
Net income attributed to Movado Group, Inc. | $ 17,360 | $ 20,215 | $ 18,683 | $ 29,829 |
Transfers to the noncontrolling interest | ||||
Decrease in Movado Group, Inc.’s paid in capital for purchase of 10% of MGS common shares | (1,011) | (1,011) | ||
Net transfers to noncontrolling interest | (1,011) | (1,011) | ||
Change from net income attributed to Movado Group, Inc. and transfers to noncontrolling interest | $ 17,360 | $ 19,204 | $ 18,683 | $ 28,818 |
Net Income Attributed to Mova66
Net Income Attributed to Movado Group, Inc. and Transfers to Noncontrolling Interest (Details) (Parenthetical) | Aug. 04, 2016 |
MGS | |
Minority Interest [Line Items] | |
Percentage of common shares purchased | 10.00% |
Net Income Attributed to Mova67
Net Income Attributed to Movado Group, Inc. and Transfers to Noncontrolling Interest (Details Textual) - JV Agreement - USD ($) $ in Millions | Aug. 04, 2016 | Jan. 30, 2013 | Oct. 31, 2017 |
Schedule Of Equity Method Investments [Line Items] | |||
Agreement termination date | Aug. 4, 2016 | ||
Joint venture termination description | On August 4, 2016, Movado Group, Inc. and Majorelle Limited, an English company (“Majorelle”), voluntarily terminated the joint venture agreement they had entered into on January 30, 2013 (the “JV Agreement”) relating to MGS Distribution Limited, an English company (“MGS”). | ||
MGS | |||
Schedule Of Equity Method Investments [Line Items] | |||
Percentage of ownership controlled | 90.00% | ||
Ownership interest in wholly-owned entity | 100.00% | ||
Co-venturer | |||
Schedule Of Equity Method Investments [Line Items] | |||
Percentage of ownership controlled | 10.00% | ||
Majorelle | MGS | |||
Schedule Of Equity Method Investments [Line Items] | |||
Purchase price | $ 1.7 |
Subsequent Event (Details Textu
Subsequent Event (Details Textual) | Nov. 06, 2017 |
Subsequent Event | Hugo Boss Trade Mark Management GmbH & Co. KG | |
Subsequent Event [Line Items] | |
Extended expiration date of license agreement | Dec. 31, 2023 |