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Movado announces job cuts as watchmaker reports drop in quarterly earnings
Luxury watchmaker Movado Group Inc. (NYSE:MOV) today announced plans to cut jobs as it reported a drop in fourth quarter earnings and issued a downbeat outlook.
Net income fell 34% to US$5.2mln, or 22c per diluted share, in the three months to 31 January, from US$7.9mln, or 34c per share, in the year-ago period.
Net sales declined 8.7% to US$130.8mln from $143.3mln with Movado citing a “challenging holiday selling season”.
Movado warned that it expects the market to remain difficult in fiscal year 2018.
“We are seeing a significant shift from brick and mortar to e-commerce and a continuing challenged fashion watch market in the United States,” said chairman and chief executive, Efraim Grinberg.
“As a result, we are taking a more conservative view for fiscal 2018 compared to fiscal 2017 and are implementing certain cost savings initiatives.”
Movado plans to consolidate certain operations and implement cost savings initiatives to boost profitability.
The company will reduce its workforce, mainly in North America and Switzerland.
The restructuring efforts are expected to cost between US$7mln and US$10mln, with most of the charges to be reflected in the first quarter results.
Movado is also shifting its investment to focus on the development of its online offering to respond to the growing trend towards digital.
To keep up with the times, the company recently announced a partnership with Google to launch new smartwatch collection, Movado Connect, to expand its products beyond traditional watches.
Shares fell 4.47% to US$22.50 in early US trading.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/175082/movado-announces-job-cuts-as-watchmaker-reports-drop-in-quarterly-earnings-175082.html
