MOV - Earnings call 3 2021 | Movado Group, Inc.

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Operator

Good day, everyone, and welcome to the Movado Group, Inc.'s Third Quarter 2021 Earnings Conference Call.

As a reminder, today's call is being recorded and may not be reproduced in whole or in part without permission from the company. At this time, I would like to turn this conference over to Ms. Rachel Schacter of ICR. Please go ahead.

Rachel Schacter

Thank you. everyone. morning, Good the Executive on Efraim Chairman Grinberg, With and call Sallie Chief Officer; Officer. DeMarsilis, and me is Chief Financial

a in of get non-GAAP on Litigation with. such information with statements to statements of those of are The not as this financial like of may constitute would the contained in call, company's release. If forward-looking which this started, facts, our Reform any comparable results uncertainties, call, due described you Private provided supplemental press XXXX. financial company's statements release. sure today's differ the to we which all are conference of a I'm financial familiar filings the presentation Actual in non-GAAP language, safe includes the meaning measure may directly to number to which measure most financial all within from used you're historical and Act the this of is in future GAAP Securities be harbor Before remind which SEC, I materially will be the deemed risks measure press suggested

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

Efraim Grinberg

season, holiday any our as answer then then of might highlights third some Good of welcome glad financial would Rachel. some we share selling will and the COO morning, is as you Thank and and be you, cover questions initiatives Sallie important the our details you call. to quarter quarter Movado and have. results With Group's conference DeMarsilis, for today Sallie will the on our to me CFO. with well I

in in accounted million sales investing which trends, last strong in operational revenues delivered $XXX.X well-being been was world management the year, our of operating with our adjusted XX.X%, working deliver Margin were that million We brands. year, even expense saw decline experiencing strict the global very per warehouses and share share. is improvement our results of how approximately the the we adjusted which now of earnings to a sales in and Europe year. and the year gross last versus we States. margin and led for able associates and are with from keep this safety customers to stores have point pleased third prioritized $XX.X basis quarter that have teams of context, million amid pandemic, per We $X.XX gave to Within world. Within operating XXX sequential on a of have higher from us continue safety the to of the our Most home, a a programs around $XX.X expectations. $X.XX last quarter. operate and expansion income we we a environment, We front improvement been tax and and and product have around during rate while our able versus Adjusted to this the $X.XX third the United on that which protocols. resurgence support teams innovation been our marketing exceeded for

operating digital continue the cash great our to discipline flow. year's progress, portfolio. management expense on net strengthened over front, Operationally, strength our another make sheet. And end, and doubling balance especially we quarter quarter also XX%. $XXX $XX.X by strong million, cash We was contributed across declined where almost saw already further we At inventory last our cash and to positive million, of

doubling. the results quarter, also growth. quarter migrated sales in growing brand channels marketplaces, the XX% gained we during we XXX%. In MVMT, align the the Salesforce.com partners saw platforms our with solution had onto of infrastructure. with our our with a brick-and-mortar acceleration brand the experienced than digital we e-commerce In OB, and our cloud brand better other sales The business, synergies strong over significant movado.com our over trends During an deliver to our and oliviaburton.com our those business, across in Movado U.K., more in

X fine-tuned final holiday to the weeks Over the of the the website mvmt.com season. we for prepare quarter, order in

improved important are business and pleased website front. A particularly company it stores. our our We international very with are direct-to-consumer seeing the the already are performance of dividends, Movado on very pay part

and we our were conversion in down increase saw on by reduced quarter stores traffic for hours, sales XX% While the lower XX%. store

have the an from and Coach. markets. on America our for economically excellent sales stores, has key value. brick-and-mortar region a Europe have consumers our closed to in shift have significant more results and of both the sales e-commerce strong our brick-and-mortar they see the more saw an from challenging a while our for The sales partners we East, department and wholesale our e-commerce in has brick-and-mortar as our the the hopeful at been to curve, improving margins, provide stores, November a improvement we and will been has sales are In store reopen our place led also portion stores as sales doubling important in profits. suffered Tmall gross important business very challenging double-digit to that shopping in month their trends our of Our trends to been experiencing trends driving sites we strong, Latin E-commerce COVID. China, U.K. focus U.K. France in products sales prior of seen that their both season. well to our outstanding also a flatten holiday and have France in products. In Movado than Middle increase In our of to we the seen saw as Europe, Germany, improve through more has and and for which marketplaces. In buy with in results December, in retail online try in

particularly our are season, by our excited across introductions product the we of enter As brands. new holiday we portfolio

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Our with new theme as sets consumers gift-giving allowing own the gift as fall for gift their to holiday is online. around create well guide

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multifunction portfolio that received an have pleased our are brands, programs to licensed as collection businesses. In during steel Mason, accents. been our reception also we and red results to our and at in look bracelet to we support seeing excellent spring, bank innovative strong across product strong white Hilfiger, blue we stainless the from with our brand sell-through Tommy consumer new we a the introductions are and very our with place experienced in we've the introduced Tommy As new collection iconic response has marketing and quarter, third

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campaign. be We have jewelry, Coach, C strong and iconically by around in quickly our has Arden Arden strong support the signature we sell-through with seen get Tommy which China. are which a world. At off in digital U.S. crown platforms excited also strong will Tommy across protector. very our Coach Hilfiger numerous the results is with will Hilfiger the featured also holiday for taken collection,

We Chronograph. have our we will further iconic BOSS, this behind will HUGO support Skymaster across develop the In portfolio. element strong

with digital bezel. we Sport France. In to our in television new iconic addition stainless Lacoste, L.XX.XX And Lacoste are our campaigns, a to Boston HUGO campaigns green holiday and with continues watch Germany will in iconic BOSS supporting Chronograph, be introducing perform, our steel and we an

None you As our very truly executed people see, ever stepped about operated has ways. team and in how us around can of world our I has during creative pandemic, the circumstances. a challenging have up am under excited

and our our cost have learned structure while continuing to our a on to brands, leaner businesses. products operate invest in We

development, digital our advances We sheet balance penetration increasing e-commerce the strong strengthened our world. around and on our made have further

their customers businesses reopened. success to have our since our with partnered drive We wholesale mutual have help

we're carefully. manage to As we look our to the finish the year, continuing expenses of

While longer, we ever stores how place with with of with for much we at more world are many recognize that in and safety seen, are to season. will be holiday the our coronavirus brick-and-mortar restrictions optimistic have brands will a very different year's of out resurgence this than shopping shopping about a and greater any season, online, the people spread parts the shopping the of cognizant we around holiday perform extent

to of our now business will turn like move and we the call we over As to would Sallie. put forward, the safety continue to employees, first. I customers

Sallie DeMarsilis

and Thank you, everyone. good morning, Efraim,

For This earlier included refer and focus update will release today and quarter of the financial highlights and of will period the provide the results GAAP key and includes period today's results. fiscal and call, XXXX fiscal to position. My measures. items then morning. all issued all a will of description year-to-date for of of non-GAAP XXXX, press year-to-date this our of our Please on our the XXXX table I and special quarter I address our third adjusted reconciliation third in fiscal on comments an

of e-commerce while the Our retail performance improved a the own initiatives of strong significant highlighted quarter and strength quarter ended our quarter store-based progress the continued from sequentially in our impact with strategic balance We by was sales, management the and second navigating sheet on and in on expansion COVID-XX disciplined our gross made margin expenses. sales. and third partner

second $XXX.X of quarter $XXX.X million last end impact of and stores year, For XXXX, fiscal and of retail wholesale compared third reopened. throughout the the were stores to our had our quarter, as By the pandemic. customers majority by sales driven all third COVID-XX the the of of the the million of the quarter

impacted and at by However, these in been have traffic retail many a locations. stores decrease reduced hours

COVID-XX this of wholesale its During began partners the trends in enabling improved stages across company's traffic as some and wholesale foot the -- return easing sales those world, in restrictions of the stores time, various retail customers.

or the taken in The and percent brands third-party by both company nonessential quarter $XX.X exchange million retail, the lower businesses, driven product profit to were on of in sales. savings brick-and-mortar due increase foreign and operating digital However, income gross all rightsizing XXXX. favorable third driven Operating down of and to margin did last spending to in fiscal million million as million $XX.X focus compared both costs, decrease share revenue diluted to in costs, to e-commerce the $X per quarter compared period. in $X.XX as third a the lower $XX.X quarter expenses including as $XX.X recorded third tax those same on U.S. and favorable fixed primarily segments. the maintaining strong of year. million income ago million compared The sales Owned $XX in decrease of expense the stores of third diluted an licensed quarter compared to and We over we quarter websites $X.XX of marketplaces. Gross income change international acquisitions mix Net marketing fiscal last XXXX. in on all and in $XX.X were income albeit gross and year increase minimize income as overall $X.X was expenses. Strong compared and customer an our of year. per expense XXXX sales, of restrictions a channel or to was third margins yet actions currency XX.X% by on the net period fiscal was million rates, have the to million of controlled XX.X% expenses across was an affecting in of a the sales while quarter a in the share declined e-commerce the base brands, owned in tax third operating our drove payroll-related in to

was of year. Now primarily million turning profit attributable net last XX, results. the million million to for The X-month was ended XX.X% period or by first X-month of rates. period. $XXX last was partially to or were channel ongoing gross X product sales exchange year-to-date changes our and $XXX.X compared Sales in The XX.X% as impact sales to compared the the in months to in the October unfavorable decrease currency pandemic. favorable to decrease sales the of $XXX.X XXXX, in Gross rate mix, million as COVID-XX for $XXX.X margin year's the foreign due offset

months ago operating the million compared $X.X share in to million per year income per X October $X.XX $XX income net million in of was $X.X or was million the share ended $X.XX For Net $XX.X XXXX, XX, of fiscal to diluted income XXXX. income or as compared period. operating diluted

turning Now to balance our sheet.

maintaining a balance sheet minimizing a priority. has top been strong addition In expenses, to nonessential

relatively million. reduced as on have million $XXX.X initiatives. million in was a at decrease to the million, Cash from end in near-term of a million sales. same down with as generally are the the Inventory We to third only Accounts $XX.X was digital is taken providing due capital million of of certain working actions in of closely This $XXX quarter the $XX.X inventories, expenditures, quarter capital. the $XXX.X down closely we projects the last manage compared primarily receivable prior such compared decrease XX.X% to the year, period $XXX.X as to period, return allowing year our year. investment, was and managing last the end to million, at due $XXX.X debt

the included by the X amortization months of the million million and of X result of first which months in acquired expense as to related amortization operating the our for period year. to a $X.X as MVMT. year $XX.X the million, X $X.X intangible flow was lower the $X.X $XX million and million discussed. Olivia cash compared year assets this remaining of than same fiscal improved Capital of first over were just last Burton fact, months Depreciation disciplined expenditures last the of actions and In are

outlook dynamic In terms pandemic. today given an nature of outlook, we providing COVID-XX are not of the the

As we are are believe challenging and progress to pleased taking we have our actions the in Efraim the this we right environment mentioned, made drive with business.

United markets. I questions. call the remain cautious to of the our States, the do now and X to continued like duration we around However, due resurgence and COVID uncertainty biggest the pandemic the in would Europe for open the up

Operator

[Operator Instructions] with from question Cowen. line comes Chen the Our of Oliver first

Oliver Chen

gross say Regarding just which by continue and may quarters? through exposure, which performance the more the which revenues And risk factors regions you the were forward? what geographic most impressed and were encouraging, regions Also, have next underpinned would going margins there? you

Efraim Grinberg

with and anything So to has to turn then add. I'll over start Sallie she and if it that see

France quarter, at And Germany, say X terms of I and brand biggest of third did probably Europe, we resurgence In was our particularly strength in really we're many the licensed the increased with in now performance, are geographically. Europe, markets that Europe. so a our in COVID see performance despite would of occurring pleased markets in end still sell-through of the which

our gross the especially On lot of saw the and business, important grew forward, we move our as becoming gross site, our also a well digital of front, of in strengthening stores during movado.com a the I a U.S., outlet of believe, that performance profitability margin margin contributed strength we really as as to that's part in the really quarter. and overall our that and

if to something So Sallie I'll see add. has

Sallie DeMarsilis

margin the gross talked direct-to-consumer that. a absolutely in margin, Efraim, our big mix concur and you. the contributed business, definitely improvement a was that that with of of we growth thank to about, outlet in gross I and larger So having The component sales as

Oliver Chen

in... Okay

Sallie DeMarsilis

follow-up, I we business the a think then is larger as generally And quarter, anyway taking gift-giving quarter fourth to direct-to-consumer have Oliver, in fourth place.

for it started Now but fourth which this margin generally with we in gross a know us. we that that quarter the would stronger do earlier quarter, year, is continue

Oliver Chen

it times a big the prepared remarks. is Okay. mentioned And and a e-commerce you topic, in few

also e-commerce and big partners should wholesale get will we implications, business over know have own about e-commerce your how I think you how the time? So well. that as margin And

Efraim Grinberg

for us, performing, think are how our should I ultimately, a on an of we but be own We're think pleased think significant a combination our lot part and really be, well, I really powerful operating and customers' also our much years next our still there's margin both is websites that more in customers that margin of accretive within basis. with also, combined gross And the opportunity and So as will and business number be basis, obviously, that of ahead websites websites segment. a for the a combination. of then will that our on

Oliver Chen

Okay.

And would others. seeing comments negative also were some have at we traffic, thought your less of we're than encouraging what some and with

do continue it's also, fairly now? trends other. crisis holiday and to to with to what's dynamics the happening traffic promotion proceeded is expect your relative continue has And volatile? So starting any interpretation it other you competitors? be And season Efraim, are earlier, the all along how the The unlike of you're this that seeing

Efraim Grinberg

Yes.

would much think we're I as really So on from are has been still browse. that's conversion better going the What the significantly expected, of seeing higher front, to people intention getting that, products, think traffic for is going and pleased they're last with I stores down purchasing, good. think say, I traffic our who much a seeing have year. to I you're the so And not demand than we're you're

so we're that. And really pleased with

Black the in the Fridays you department will is holiday or time. the that to fact that you're don't channel be have of period the past. unknown in shopping longer a brick-and-mortar I for have season store people had I think going this think the

be will very see that go so And on, different. you'll just it

think then anyway. probably some our it get or later be expensive, in People will of it stores. forward, options options. I we some to more -- will we'll as, up and end, of And came people end will cases, that second-day at next-day shipping the choose those actually shipping products go add as giving our in Some

from it's number. think traffic but obviously, not I have was, now, very which going a to So resurgence seem be still it And right negative very, it dramatically does impacted to different. a is there's where

Oliver Chen

inventory as Okay. of versus seem are some of earlier And flowing the particularly in clean, think our about of States, newness context as in well question, your your level wholesale your that how sellouts right Your how do the and partners, last the you comments? freshness on United sell-ins but and very position you flow? generating and inventory

Efraim Grinberg

Yes.

So us, even and with doing the whole, with how a department in front as pleased making front we better the retail partners than the think especially And our that just a becoming to on we of meaningful executed expected on a channel, and especially terms their digital -- I'm return store innovation the teams brick-and-mortar our business. of significant on really delivering impact overall at and our are time, inventory. really have in same front on our part

out a quickly, out it we think, see continue opportunity lot and holiday we bestseller of to there, stores than we so which strategies. a deliver earlier, of think a So is good on very there now I just our inventories as in season. are, ready month our at the already as is -- this for look going to in we bestseller SE, less in really a be shape, our if And Movado you newness a really said and lot

Operator

this closing and back to today's call question-and-answer Grinberg I Efraim reached Mr. for end Ladies session. would to we like over turn remarks. gentlemen, of the have

Efraim Grinberg

a next for again to and like Thanksgiving, and look on you return call, a you and very our would Again, wish forward are very we to participating of and everybody I year. so obviously that to you happy normal. year, can today's hoping thank thank much, Thanksgivings unusual to next all talking

Operator

today. joining today's for you concludes Thank us conference. This

this at disconnect may lines time. You your

Movado (MOV) 24 Nov 202021 Q3 Earnings call transcript