Paramus, New Jersey–Movado Group, Inc. has released its third quarter fiscal year 2017 results for the period ending Oct. 31.
The company reported a 3 percent decrease in net sales from the third quarter of fiscal year 2016, from $185.6 million to $179.8 million.
Gross profit as a percentage of sales increased from 54 percent, or $100.1 million, to 55 percent of sales, or $98.6 million. Movado said the increase was “primarily the result of the favorable impact of channel and product mix, and certain sourcing improvements partially offset by the reduced leverage of certain fixed costs.”
Operating expenses increased in the third quarter by $0.8 million, or about 1 percent, to $67.5 million from last year’s $66.6 million. This was due to increases in employee compensation, but was offset by a lower marketing budget and favorable foreign currency exchange rates.
Operating income decreased from $33.5 million in Q3 of last year to $31.1 million in this year’s third quarter, while net income was $20.2 million, compared with last year’s $21.5 million.
The company said it is maintaining its outlook for fiscal year 2017, with net sales predicted to fall between $550 million and $560 million.
“We are pleased to report third quarter financial results at the high end of our internal expectations driven by the disciplined execution of our strategy,” said Movado Group CEO and chairman Efraim Grinberg.
“In a challenging retail environment, which pressured sales growth, we delivered a 90-basis-point expansion in gross margin, demonstrating the ongoing power of our portfolio of brands and the strength of our innovation. We believe we are well positioned for the holiday season with a strong product pipeline of traditional and connected watches.”
Grinberg also said Movado will collaborate with fashion and accessory brand Rebecca Minkoff on women’s and men’s watches in spring 2017.