Q3 sales up 16% for Movado

Sales climbed 16 percent in the third quarter for Movado Group Inc., the company reported Thursday.

Sales in the third quarter of fiscal 2012 were $142.6 million, up from $123.0 million in the third quarter of fiscal 2011.

Gross profit was $81.0 million, or 57 percent of sales, up from $68.9 million, or 56 percent of sales, in the third quarter of last year. Movado said the increase in gross margin percentage was due to a shift in channel and product mix and leverage gained on certain fixed costs, partially offset by the unfavorable effect of fluctuations in foreign currency exchange rates.

“We continued to build on our momentum during the third quarter, achieving broad-based sales growth again across all of our brand categories,” Movado Chairman and CEO Efraim Grinberg. “In particular, we remain pleased with the strong sell-through of our Movado and licensed brands, which continue to resonate very well with consumers and validate our strategic positioning in the marketplace.”

Year-to-date, sales are up 23 percent to $345.7 million for Movado. Gross profit is $190.6 million, or 55 percent of sales, compared to $151.8 million, or 54 percent of sales, at this time last year.

Movado designs, sources and distributes Movado, Ebel, Concord, ESQ by Movado, Coach, Tommy Hilfiger, Hugo Boss, Juicy Couture and Lacoste watches worldwide and operates Movado company stores in the United States, including its flagship store in New York City and outlets throughout the country.

-National Jeweler

Tiffany's 3Q Sales +21%, Earnings +63% to $90M

Tiffany & Co. reported third quarter sales rose 20.5 percent year on year to $821.8 million for the three months that ended on October 31. Same-store sales rose 16 percent globally on a constant exchange rate basis. Cost of sales rose by 22 percent to $345.9 million, allowing gross profit to increase 19 percent. Gross margin fell to 57.9 percent from 58.5 percent one year ago. Net earnings, though, jumped 62.8 percent to $89.7 million or 70-cents per diluted share.

Tiffany lowered its long-term debt by 9 percent to $539.7 million and increased net inventory to $2.1 billion from nearly $1.7 billion one year ago. Cash and equivalents, however, fell 44 percent to $297.4 million.

Net sales in the Americas rose 17 percent year on year while comparable store sales rose 15 percent. On a constant exchange rate basis, sales rose 40 percent in the Asia Pacific region with same-store sales increasing by 36 percent, while Japan had an overall sales increase of 3 percent and same-store sales increase of 4 percent. Tiffany's European division recorded a sales increase of 15 percent in local currency and a same-store sales improvement of 6 percent year on year.

Michael J. Kowalski, the chairman of Tiffany & Co., said, ''Increased sales in all regions contributed to the continuation of strong worldwide sales growth in the third quarter. We were also pleased to achieve an improved operating margin by leveraging the sales growth against fixed costs. Tiffany is extremely well-positioned to serve growing numbers of discerning customers around the world with extraordinary product offerings and superior shopping experiences.

''We are, of course, mindful of continued short-term economic challenges and uncertainties in some markets. Worldwide sales-to-date at this relatively early stage of our November-December holiday season are tracking in-line with our current expectations despite recent sales weaknesses in Europe and in the eastern part of the U.S.,'' he said.

Looking ahead to Tiffany's fourth quarter, the company expects a low-teens percentage increase for worldwide sales and an operating margin increasing more than one point. Tiffany anticipates net earnings to jump almost 30 percent or within a range of $1.48 to $1.58 per diluted share, up from $1.44 per diluted share in 2010.

In a client note yesterday, Margaret Whitfield of Sterne Agee estimated Tiffany's comparable-store sales would increase nearly 15 percent and a 20 basis point improvement in gross margin to 58.7 percent. ''Tiffany has met little resistance raising prices to offset higher raw material costs so far, which we expect to continue,'' Whitfield wrote. ''We maintain our 'Buy' rating with a target price of $90, based on 19.1x our fiscal year 2013 EPS estimate. We expect Tiffany will benefit from healthy global demand from high-end consumers.''

-Rapaport