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RAPAPORT... Movado Group reported that revenue rose 4.2 percent year on year to $118 million for the second quarter that ended on July 31. The retailer held cost of sales flat at $52.3 million, which helped boost income 78 percent year on year to $8.2 million. Sales growth was partially offset by the group's planned reduction in sales of the ESQ and Ebel brands ahead of their fall re-launch. Gross profit improved to 55.7 percent of sales compared with 53.8 percent one year ago. Movado recorded a tax provision of $2.5 million, which equates to an effective tax rate of 23.6 percent compared with 16 percent one year ago. Movado held no recorded debt at the close of its quarter. Movado increased its guidance slightly for fiscal year and now anticipates revenue will rise 10 percent year on year to $510 million, while income would jump approximately 45 percent to a range of $35.5 million to $36 million. Efraim Grinberg, the chairman of Movado, said, “Our expansion strategies and strong operating infrastructure combined with the disciplined management of expenses and inventory has provided us with a sustained platform to continue our growth during the balance of fiscal 2013 and in the future. As we begin the third quarter, we are excited about our upcoming re-launch of our Ebel and ESQ collections and expect continued strength within our Movado and licensed brands.” Rick Coté, the company's president, added, “We are pleased to deliver another strong quarter that included a 7.6 percent increase in net sales on a constant dollar basis. More reflective of the strength of our business and the growing importance of our brands is our 15.1 percent increase in constant dollar sales, excluding the planned sales reduction in anticipation of our re-launch of Ebel and ESQ this fall.”
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