Growing sales among Movado Group’s licensed brand business saw the company’s revenue increase 10% in Q1 of 2014 based on the previous year to $120.9million (£72.2million).
However cost of sales increased 10 percent to $55.7 million, with gross margin as a percentage of sales slipping to 53.9% compared with 54.5% during Q1 2013. Group profit dropped 9% to $7.4 million (£4.4million).
Efraim Grinberg, Movado Group chairman and chief executive officer, commented: "We remain excited about the year ahead and believe the first quarter positions us for a strong fiscal 2015. This is further evidenced by the reiteration of our annual guidance and we believe we remain on track to achieve our multi-year strategic plan,”
Movado’s fiscal 2015 guidance predicts sales will grow 10.7% to $640 million (£382million) with operating income up 19% to $90 million (£53.7million). The company also expects profit to reach $63.5 million (£37.9million).
On April 30, the end of the Q1 period, Movado Group reported $137.8million (£82.2million) in cash while the value of the company’s stock inventory grew 5.3% year on year to $184.4 million (£110.1million).
Movado president Rick Cote pointed out that momentum in the business was being driven by customer response to the company’s Movado and licensed brands, especially the reintroduction of Coach watches and the continued strength of Ferrari-branded products, which celebrated its one year anniversary in April.