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Movado's net sales up 5 percent in fiscal 2008

March 28, 2008

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Paramus, N.J.—Net sales for fiscal year 2008 at Movado Group Inc. increased 5 percent to $559.6 million, compared with fiscal year 2007, the company announced yesterday.

This included $31.2 million of excess discontinued product sales and a one-time accrual of a $15 million for product returns associated with the company's previously announced closing of approximately 1,400 wholesale doors selling the Movado brand in the United States.

"Considering the challenging economic and retail environment in the United States, particularly during the holiday season, we are pleased with our overall performance," Movado President and Chief Executive Officer Efraim Grinberg said in a media release.

Grinberg credits part of the company's success to its diversified business model from both a geographical and brand portfolio perspective.

"Today, approximately 50 percent of our wholesale revenue is generated outside of the United States," Grinberg said. "With our powerful brands and strong balance sheet, we are well positioned to weather these challenging times."

The company's fourth-quarter net sales were down 2.6 percent to $138.57 in fiscal 2008, compared with $142.26 million in fiscal 2007.

Gross margin, however, increased 120 basis points to 64.3 percent of sales in fiscal 2008, compared with 63.1 percent of sales in fiscal 2007.

Movado Executive Vice President and Chief Operating Officer Rick Cote said the company has significantly expanded its adjusted growth margins through new product introductions and a strong international performance in fiscal 2008.

For its fiscal 2009 guidance, Movado Group projects its net sales to be in the range of $555 million to $565 million. The guidance reflects a more cautious outlook on the U.S. economic environment, which the company believes could be offset by favorable foreign exchange rates.

Movado has also announced Sallie A. DeMarsilis as its new chief financial officer and principal accounting officer, effective March 31.

Eugene Karpovich, the company's current CFO, will remain an officer of the company and a senior member of its management team focusing on various corporate worldwide initiatives.

Movado Group designs, sources and distributes Movado, Ebel, Concord, ESQ, Coach, Tommy Hilfiger, Hugo Boss, Juicy Couture and Lacoste watches worldwide, and operates Movado boutiques and company stores in the United States.

For more information about Movado, visit the company's Web site, Movado.com.
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