Movado Group announced second quarter results for the period ended July 31, 2015. Gross profit was $79 million, or 54.3% of sales, compared to $77.6 million, or 54% of sales, in the second quarter last year.
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Net sales increased 1.4% to $145.6 million compared to $143.6 million in the second quarter of fiscal 2015. Net sales on a constant dollar basis increased 6.1% compared to net sales in the second quarter of fiscal 2015.
Gross profit was $79 million, or 54.3% of sales, compared to $77.6 million, or 54% of sales, in the second quarter last year. The increase in gross margin percentage was due to channel and product mix, selective price increases and certain sourcing improvements, partially offset by the unfavorable impact of changes in foreign currency exchange rates.
Operating expenses increased $0.4 million, or 0.6%, to $60.8 million. This increase was primarily the result of an increase in compensation and benefit expenses as well as higher marketing expenses, partially offset by the favorable impact of foreign currency exchange rates.
Operating income increased to $18.2 million, or 12.5% of net sales, compared to operating income of $17.2 million, or 12% of net sales, in the second quarter of fiscal 2015.
The Company recorded a tax provision of $6.1 million, which equates to an effective tax rate of 33.8%, compared to an effective tax rate of 28.7% in the second quarter of fiscal 2015. The increase in the effective tax rate was primarily due to not recognizing tax benefits on losses incurred by certain foreign operations.
Net income was $12.1 million, or $0.50 per diluted share, compared to $12.2 million, or $0.47 per diluted share, in the second quarter of fiscal 2015.
There were no unusual items recorded during the second quarter of fiscal 2016. During the first quarter of fiscal 2016, the Company recorded a $2.7 million pre-tax charge, or $0.10 per diluted share, related to operating efficiency initiatives and other items in fiscal 2016. There were no unusual items recorded in the first half of fiscal 2015. ■