Movado posts narrower-than-expected Q1 loss
June 9 (Reuters) - Watch-maker Movado Group Inc (MOV.N) posted a narrower-than-expected quarterly loss, helped by lower expenses that offset drop in sales, and forecast a surprise profit for fiscal 2010.
The company also said it secured a new $50 million asset-based loan agreement with Bank of America Corp (BAC.N) that will be used to repay debt and finance its business on an ongoing basis.
Movado, which distributes watch brands like Concord, Ebel, Tommy Hilfiger and Hugo Boss, posted a first-quarter loss of $9.0 million, or 37 cents a share, compared with a profit of $1.2 million, or 5 cents a share, a year earlier.
Sales fell 33 percent to $67.6 million for the period ended April 30.
Two analysts were expecting a loss of 49 cents a share, before items, on revenue of $68.5 million, according to Reuters Estimates.
"The decisive cost savings initiatives we embarked upon last year are clearly materializing in our results, as first-quarter operating expenses declined 24 percent from the year-ago period," Chief Operating Officer Richard Cote said in a statement.
Cote expects the company to generate annualized cost savings of 50 million to $60 million, a big portion of which will be realized this year.
The company, which expects to be free cash flow positive this year, said it remains focused on cash flow management and is taking actions to lower inventory.
For fiscal 2010, the company forecast earnings of about 50 cents a share while analysts were expecting a loss of 14 cents a share.
Shares of Paramus, New Jersey-based Movado closed at $8.10 Monday 8 June on the New York Stock Exchange.
For related alerts double click (Reporting by Renju Jose in Bangalore; Editing by Anil D'Silva)