Movado Group Inc (MOV) 2007 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Movado Group's first quarter earnings conference call. [OPERATOR INSTRUCTIONS] I would now like to introduce Ms. Suzanne Michalek of Movado Group.

Please go ahead.

Thank you.

Good morning everyone, and thank you for joining us today.

With me on call is Efraim Grinberg, President and Chief Executive Officer, Rick Cote, Chief Operating Officer, and Gene Karpovich, Chief Financial Officer.

Before we begin, I would like to note that this conference call contains forward-looking statements, which are made in pursuance to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Factors which could cause actual results to be materially different from any future results expressed or implied are discussed in our filings with the Securities and Exchange Commission.

Such forward-looking statements include statements regarding Movado's performance for the the remainder of fiscal 2007 and beyond.

We currently expect to update estimates; however the failure to update this information should not be taken as Movado's acceptance of these estimates on a continuing basis.

Movado Group may also choose to discontinue presenting future estimates at any time.

Let me now outline the order of speakers and topics for today's conference call.

Efraim will begin with the highlights of our first-quarter results.

Gene will then review the financial details, and Rick will provide you with an update on our operating initiatives along with our financial outlook.

We would then be glad to answer any questions you might have.

I would now like to turn the call over to Efraim.

Thank you, Suzanne and good morning, everyone.

We are very pleased with the overall strength of our first quarter performance.

This year in our seasonally smallest quarter, sales grew 11%, gross margin expanded to 61%, operating profit grew 60.5% while both net income and earnings per share more than doubled from the year-ago period.

These strong results reflect the appeal of our diverse portfolio of brands and the focused execution of our operating strategies.

Fiscal 2007 was jump-started by strong retailer replenishment and an excellent response from our retail partners to the powerful array of new products debuted at the Basel Watch Fair.

In our luxury category, Ebel posted a terrific performance in the first quarter, with sales more than doubling from the year-ago period.

Ebel sparked a tremendous amount of excitement at Basel this year with the introduction of Brasilia.

Brasilia is an important new collection for Ebel that began shipping immediately following Basel.

With the strong response -- with a very strong response during the first quarter, Brasilia propelled Ebel's results for the quarter and is already showing encouraging initial sell-through.

To support the new Brasilia women's collection, our advertising campaign and point-of-sale displays have been infused with fresh elements and feature top model Giselle.

For Ebel's male consumers, we've evolved the Architects of Time campaign to feature the work of Oscar Niemeyer, a key figure of 20th century architecture.

We expect Brasilia to be an important driver for Ebel throughout 2006 and a core collection for the brand going forward.

As you know, we are working towards transforming Concord into a solid, more profitable contributor to our company for the long term.

We've strengthened the leadership team for the brand and recently hired a new brand president.

We are in the process of developing our strategic plan for the rebirth of the Concord brand, and we look forward to sharing some of these details with you toward the end of the year.

Our accessible luxury segment fueled a very strong domestic performance in the first quarter.

At Basel, retailer response to new products in both Movado and ESQ is tremendous.

In Movado, we introduced a number of leadership products including the new SE, which will ship in the fall.

We also introduced the Sapphire collection, which was reinforced with new executions of our Art of Time advertising campaign, featuring Mikhail Baryshnikov and Wynton Marsalis.

Movado continues to dominate the $500 to $ 1,500 price category in North America by making innovation its number one priority across all of its products.

During the first quarter we introduced to the trade a very exciting new collection in Movado, the Series 800.

Key customers were invited to our headquarters in March to preview this powerful new collection and the response was incredible.

Series 800 is Movado's interpretation of a sports luxury watch with price points in the $700 to $1,500 price range.

A new category for Movado, the collection will appeal not only to existing Movado consumers but also attract an incremental consumer to the brand.

Series 800 will have a limited distribution this year, with approximately 500 doors worldwide, including our Movado Boutiques.

We will begin shipping the product in July, and a dedicated advertising campaign featuring two-time Super Bowl MVP, Tom Brady, will break in August publications to support this key new collection.

Our Movado Boutiques continue to elevate Movado's brand image in the marketplace.

For the first quarter, we delivered a 4.5% comparable store sales increase, partially impacted by a late Mother's Day which resulted in the shift of certain sales into May this year from April last year.

Sales of our proprietary Movado jewelry are being driven by the appeal of diamond fashion including our very successful Ono collection.

We are capitalizing on this trend by increasing the synergy between watch and jewelry design with our jewelry-inspired Ono watch collection.

We recently mailed our M125 catalogue, focused on the 125th anniversary of the Movado brand and featuring great ideas for Father's Day and graduations.

ESQ continues to benefit from very positive retailer response to new product collections and an integrated marketing campaign, which resulted in double-digit sales increases for the first quarter.

At Basel, ESQ received a great reception to new products including an exciting Air, Land, and Sea collection, launched to compelling price points from $295 to $595.

Our retail partners are seeing the growing momentum of ESQ and our continued commitment to the brand, with the ESQ&U advertising campaign.

Our licensed watch business is comprised of some some of the world's most powerful brands, Coach, Hugo Boss, Juicy Couture, Lacoste, and Tommy Hilfiger.

With this stable of brands, we have redefined the high end of the fashion watch category with strongly differentiated products, each clearly embodying the DNA of its parent brand.

With it's accessible luxury proposition of product innovation, relevance, and exceptional value, Coach continues to be one of the most powerful brands in the marketplace.

During the first quarter, we introduced the popular Scribble C pattern on our best selling Gallery Interchangeable watch.

We also introduced the Whitney collection, a bangle design inspired by the unique Coach hardware found on this handbag collection.

Looking ahead to the fall season, we continue our close partnership with the Coach design team, as we launch a compelling new watch, Legacy Sport, aimed at the Coach male consumer.

In line with the Coach philosophy, over the past 18 months, we have curtailed a number of doors to increase productivity of our remaining doors, which has proven to be a very successful strategy.

We are very pleased with the continued global momentum we are achieving in our Tommy Hilfiger watch brand.

Tommy Hilfiger showed very strong double-digit gains in the first quarter, with impressive growth particularly in our international markets.

In line with the Tommy Hilfiger Brand, our watches and marketing programs are aimed at lifting the brands to convey a premium American lifestyle image.

New product introductions in the first quarter included Bayhead, a men's sport classic piece and Bainbridge, a classic sophisticated tag featured in our current advertising campaign.

The complete relaunch of the Hugo Boss watch brand under Movado Group stewardship took place at Basel this year, and the feedback from retail and press has been extremely positive.

New packaging, point-of-sale material, catalogues, and advertising along with very strong, well differentiated product have given the Hugo Boss watch collection a strong and coherent identity.

During the second quarter, we will complete the rollout of Hugo Boss watches, with major new marketing openings such as Germany, the U.S., and the Middle East.

Rounding out our licensed brand portfolio, we look forward to the much anticipated launch of Juicy Couture in the fall of this year and Lacoste in the spring of 2007.

We previewed our Juicy watch collection to retailers in April to a tremendous response.

With whimsical detailing and fun, fashion-forward designs, the Juicy collection will be unmistakable in the marketplace and is already creating a buzz.

Overall, we are pleased with the very strong results our company achieved in the first quarter and our prospects for strong future growth.

Importantly, we are focused on maintaining the excellent operating disciplines that we have put in place over the past few years as we continue to grow.

I would now like to turn the call over to Gene, who will review our financial results in greater detail.

Gene?

Thank you, Efraim and good morning, everyone.

We recorded strong financial results in the first quarter ended April 30th, 2006, fueled by strong sales.

As a reminder, the first quarter is the smallest quarter and typically represents less than 20% of our annual sales.

Sales for the first quarter were $97.7 million or 11.4% above prior year, which benefited from the launch of the new Ebel Brasilia collection and the introduction of Hugo Boss watches.

Sales in the wholesale segment increased 11.6% to $81 million.

Our luxury category, comprised of Ebel and Concord, was above prior year by 29.4%.

Ebel more than doubled year-over-year, driven by strong global response at the Basel Watch Fair with the launch of the new Brasilia collection.

Concord was below prior year, as we expected.

Our accessible luxury brands, Movado and ESQ, were above prior year by 3.9%.

Movado continues to achieve very good sell-through at retail in our major chain and department store business.

ESQ continues to generate positive response from our retailers to the new model introductions and new marketing campaign.

Our license brands Tommy Hilfiger, Coach, and Hugo Boss were above prior year by 20%.

Tommy Hilfiger's growth was primarily in the international markets.

The domestic wholesale segment was up 5.5% from $52.9 million to $55.8 million.

The international wholesale segment was up 28% from $19.7 million to $25.2 million.

The retail business posted a 10.5% increase over last year.

The increase was driven by an overall 12.1% increase in Movado Boutique sales.

This was the result of a 4.5% comparable store sales increase, along with the addition of three new stores year-over-year.

The Company Outlet stores were above prior year by 8.9%.

This was the result of a 6.5% comparable store sales increase, along with the addition of two new stores year-over-year.

As of April 30, 2006, the company operated 27 Movado Boutiques and 28 Outlet stores.

Gross margin for the quarter was $59.6 million, or above last year by $6.8 million.

The increase in gross margin is primarily due to the sales increase.

Gross margin as a percent of sales is 61% versus 60.2% last year.

The increase of 80 basis points was driven by higher margins in our new product introductions and higher margins in our Movado Boutiques.

Our operating expenses were 56.2 million or 10.8% above last year.

The principle reasons for the in coos in expenses are higher marketing expense to support our growth initiatives, added spending resulting from the retail expansion, higher payroll and related expenses, reflecting general salary increases, as well as increased headcount to support the growth for both new and existing brands.

In addition, higher costs were incurred as a result of the consolidation of a majority-owned joint venture established to distribute our licensed brands in Germany and France.

Net interest expense was $52,000, below our prior year expense of $809,000.

As you'll recall in the fourth quarter last year, we repatriated $150 million in cash under the American Jobs Creation Act.

This resulted in more cash in the U.S.

And higher borrowings in Switzerland.

The increased cash invested in the U.S. generated significantly higher interest income than in prior years, more than offsetting the interest expense in the borrowings in Switzerland.

The average interest rate earned on our cash was 4.5%.

Our average debt for the quarter was $106.5 million or above prior year of $51.5 million.

Our average borrowing rate was 3.4% versus 5.7% prior year.

As you are aware, we established a joint venture with a European partner in the first quarter. 100% of the financial results of this joint venture are included in an overall results, with our partner's 49% interest reflected in the minority interest line on our P & L. For the quarter, the start-up of the joint venture resulted in an operating loss of approximately $160,000.

Income taxes were provided at a 17.5% effective tax rate versus a 25% rate prior year.

The lower effective tax rate is primarily the result of our ability to utilize a greater portion of our Swiss net operating loss carry-forward.

This lower effective tax rate had the effect of increasing diluted earnings per share by $0.01.

Net income was $2.9 million versus $1 million last year.

The earnings per diluted share was $0.11 versus $0.04 last year.

Now, taking a quick look at our balance sheet.

Our cash as of April 30, 2006, is $82.6 million versus $49.6 million last year.

Accounts receivable of $116.5 million is above prior year by $14.4 million.

Our daily sales outstanding were 99 days versus 98 days.

The slight increase in our DSO is due to the sales growth in Ebel, where longer payment terms are the norm for luxury brands.

Inventories of 213.8 million increased by 11.3 million from last year.

The increase is primarily in our luxury brands, Ebel and Concord.

Due to our tax planning initiatives implemented over the past few years, we have been able to utilize approximately 50% of of the 165 million Swiss franc NOL obtained in the Ebel acquisition.

As a result, we have reversed the entire $9 million in tangible assets originally established with the Ebel acquisition and lowered our effective tax rate for fiscal 2007.

Total debt ,consisting of both short and long term debt, was $102.3 million versus $63 million last year.

Capital expenditures for the quarter were $2.1 million and depreciation expense was $3.5 million.

We expect our capital expenditures for the year to be approximately $20 million and depreciation expense for the full year to be approximately [$16] million.

Overall, we are very pleased with the financial performance for the quarter in all respects, in delivering a very solid P&L performance and maintaining a sound balance sheet.

Now, let me turn the call over to Rick.

Thank you, Gene.

Good morning, everyone.

In addition to the robust sales performance in the first quarter, our global team demonstrated strong operating disciplines which translated into expanding gross margins and operating profit growth.

In our last conference call, I outlined three key operating initiatives for fiscal 2007.

First, we are focused on the expansion taking place in our existing businesses.

This includes the continued growth of our Movado Boutique business, as we move toward critical mass and convert this business into a profitable operation, our accelerated growth plan for ESQ, which calls for a doubling in the size of this North American business, the ongoing revitalization of Ebel to its historic stature as a global luxury watch brand, and the restoration of the health of the Concord brand.

Our second major initiative in fiscal 2007 is focused on our newest businesses, Hugo Boss, Juicy Couture, and Lacoste.

This includes establishing product development, sales, and marketing infrastructure, particularly for the Juicy and Lacoste brands, which will be launched over the next 12 months.

I would like to spend the next few minutes on our third major initiative, which is continued improvement of our financial metrics.

As we reap the benefits of the investments I've just outlined, this will allow us to grow our operating margin through a combination of gross margin improvement and the leveraging of our existing infrastructure.

Our goal is ultimately to expand our operating margin from the historic 10% level to the mid-teens.

To better understand how we're going to increase our operating margin to the mid-teens level, let me give you a sense of our current metrics by looking at our business in three different stages of development.

First, our established businesses.

Today, these businesses are already generating healthy operating margins of approximately 14%, with an expense infrastructure at about 46% of sales.

Clearly, this is a good example of how we've been able to leverage our infrastructure as we've grown the size of this business.

Looking ahead, we expect to raise this operating margin to an even higher level to the combination of further leverage and gross margin improvement.

Second, our investment businesses, Movado Boutiques and Ebel.

Here we are focused on converting our Movado Boutiques into a profitable operation, which we project will take place in fiscal 2008.

With Ebel having just turned profitable last year, we will continue toward expanding the brand and improving the image and financial performance.

Over the next several years, our focus will be on improving the operating margin of both of these businesses to be in line with our targeted mid-teen level.

We will seek to achieve this through increased scale and a combination of gross margin improvement and leverage.

Finally, our newest businesses, which consist of Hugo Boss, Juicy Couture, and Lacoste.

These businesses are truly in their infancy.

Hugo Boss just recently launched at Basel this year.

Juicy will launch in the fall of this year and Lacoste in the spring of 2007.

As each of our license businesses mature, we would expect sales in excess of $20 million, and ideally in the $30 million to $50 million range and obviously be significant profit contributors over the long term.

Here again, we will focus on growing these brands with the appropriate metrics and expanding their operating margins to our mid-teen target.

To reinforce our management's focus on achieving these targets, we've also directly linked our long-term equity incentive plan for key management personnel to a performance-based plan with operating margin improvement being the key performance measurement.

When you analyze the business the way I've just outlined, it is clear that we have a great opportunity to expand our operating profit as a percent to sales.

Significant investments made over the past number of years have temporarily hindered operating margin expansion and masked the very healthy metrics of our established businesses.

Now I'd like to turn to our financial outlook.

Due to the further utilization of our Ebel NOL, we now expect our tax rate for fiscal 2007 to be 17.5%.

With this tax benefit, along with improved operating performance, we have increased our diluted earnings per share guidance.

We now anticipate diluted earnings per share for fiscal 2007 to range between $1.53 and $1.58.

These projections compare with our previously issued guidance for diluted earnings per share to range between $1.35 and $1.39.

The new guidance continues to include an approximate $0.08 per diluted share expense associated with the adoption of FASB 123 R, and the shift in the composition of our equity-based compensation plan from options toward restrictive stock.

We now estimate fiscal 2007 year-over-year net sales growth to be at the higher end of our previously issued range of 9% to 11%.

Turning to our guidance for the second quarter of fiscal 2007.

We would expect Movado Group to deliver diluted earnings per share in the range of $0.35 to $0.39 compared to last year's $0.33.

This guidance includes an expense slightly in excess of $0.02 per diluted share, associated with equity-based compensation.

Second quarter earnings guidance is based on projected sales growth of approximately 9% from last year, due to the strong first quarter sales results.

Operating expenses are expected to grow in line with sales for the full year.

With that, I would now like to open up the call for your questions.

Thank you.

Ladies and gentlemen, at this time we will be opening up the call for the question-and-answer session. [OPERATOR INSTRUCTIONS] Our first question comes from Kristine Koerber of JMP Securities.

Yeah, hi.

Couple of questions.

First of all, can you talk about the doors you're in, especially with the Movado brand.

I know you have been pulling back on the number of doors, kind of where you stand now, and will we continue to see a reduction, and then secondly, talk about -- discuss the gross margin improvement.

It appears -- are you introducing -- is it more new products introductions, that's driving or that will drive the gross margin improvement, and are you increasing prices at all?

Thanks.

Sure.

Let's address the first one.

We continue to incrementally decrease the Movado distribution on a planned basis and predominantly, internationally where we focused on being in more productive distribution.

On the gross margin initiatives, our gross margins went up 80 basis points, predominantly driven by, new product introductions.

It's slightly higher gross margins and improved gross margin in our Boutiques as well.

Are you increasing prices on any of the existing watches to offset the commodity -- rising commodity prices?

We will be increasing some gold watch prices in this quarter to offset higher gold prices, but -- and those will be selective as we move forward.

Okay and then as far as Movado distribution, you said lowering the number or reducing the number of doors internationally.

Is there much more work to be done, or do you still need to bring down the number of doors you're in?

I think that we're pretty much there, and we've also continued to increasingly focus on productivity in the domestic market as well, so we have eliminated a number of doors, some in mutual agreement with our customers, where there has not been the level of productivity that we would like, increasing the productivity of other doors.

Thank you.

Thank you.

Our next question is coming from Pamela Brown of Gabelli and Company.

I just want to congratulate you on explaining the financial metrics.

I thought Rick, the way that you outlined the 3 business goals was phenomenal for you to be able to identify for other investors.

I've been hoping you'd do that for a while, so I'm really glad to see that happen.

But the one thing I wanted to ask you about is the interest going forward for the year.

I guess maybe I don't understand exactly how that should play out with the continuing usage of the NOL, and how that might affect your cash interest income going forward.

That's going to be a factor.

I would love to understand that better.

Well first of all thank you for the congratulations on the quarter, and I'm pleased that you like the break out of the business.

When we look at interest expense, obviously, a major impact this year is built into our plans because of the significant expatriation of cash to the U.S. last year.

On an overall [inaudible] basis we would expect interest expense in minority interest, which is a new phenomenon we have starting this year, which is basically the three lines that make up the difference between operating profit and profit before taxes, probably to be in the range of $2.5 to $3 million this year, and primarily because of, obviously, a minority interest, which will be reflected as an expense as we make profit in that joint venture, but also because, obviously, our interest income is going to be much higher than it has been in the past.

The first quarter is, by far, the strongest, because as you know, we basically increase inventory in our spend in the second and third quarter, as we're building inventory for the strong third and fourth quarter periods, so there's a greater utilization of cash in those two periods of time.

The NOL has no impact on interest expense or income or the minority interest.

The utilization of the Ebel-acquired net operating loss carry-forward gives us the opportunity of, as we're making profit in Switzerland, to be able to shelter that profit and not have to pay tax on it, and that comes through in our tax rate.

So as you know, we were planning on a 25% tax rate, but because of our tax planning initiatives, we're able to lower it this year to 17.5%.

That's where the NOL comes in and benefits us.

Right.

Sorry, I think I got confused between the American Jobs Creation Act and that.

And so, can you just explain to me is the American Jobs going to affect you for the rest of the year as well?

Sure.

When we're done as you know last year, we transferred from international operations about $150 million of cash.

Yes.

As a result, the cash balances that we have globally, have increased, and virtually all of our cash balances are now in the U.S. marketplace.

Okay.

In the past they have been around the world and in the U.S.

Marketplace, that's providing the benefit for the interest expense.

Okay.

That's great, and I just have one quick question.

Just looking back on my notes for the first quarter of '05, your Ebel sales were about $3.4 million so, in doubling, you're at about $7 million and then looking at the second quarter, I think it was about $9 million, I would assume that you're going to tell me that they're not going to double in the second quarter, but I would love to have any comment on that.

Sure and we're not going to comment on specific sales numbers, by brand, I think your numbers are a little off in terms, what did you say for the first?

It was significant.

It was more than that, and it more than doubled in the first quarter.

We expect actually to be around the same -- around flat for the -- to up a little bit for the second quarter, and obviously, we expect a significant increase for the year, and we have very exciting plans for the second half of the year as well in Ebel.

Okay.

Great.

I'll find out what my number's off on.

Sorry, thanks.

Okay.

Thank you.

Our next question is coming from Douglas Pratt of Stallion Group.

Thanks very much.

Let me also echo the congratulations on the presentation.

It was a great break out.

If you could -- and this may be something everyone else already knows -- the increase for CapEx, if I got that right, it was $2.1 million in the quarter, and you got 20 million for the full year, is there anything special now, or is that just a ramp-up of spending for the full year, and also, do you have a break out of sales by retail, wholesale, and U.S. and international, please?

Well, on the first one, on the CapEx, it's really this year it's the investment in three new stores in our Boutiques, some renovations, as well as some new Outlet stores that we'll be opening up in the second half.

And it's the timing of that spending.

Right.

Those will be built out throughout the balance of the year, as well as focus on continuing to improve our point-of-sale and shop-in-shops in major retailers throughout the world.

I'll turn it over to Gene, the segment information on our sales, which I think he gave in his comments, but he can repeat it.

No, if it's in the comments that's fine.

No need to repeat it.

Yeah, we put it in the comments.

And just a quick follow-up on that CapEx.

Have you got any budget or thinking in terms of the following year?

Does it fall dramatically from the 20, do you think, or is that a new base level?

I think the 20 is at a high level.

I expect it to be a little lower but on an ongoing basis it probably will be in that $16 to $18 million range, because, as you know, with our retail stores, we'll be at a critical mass at the end of the year, but obviously a lot of stores are 8 and 10 years old, and we start with renovations, as we expand the new leases there.

Okay.

I see.

Thanks very much.

Great quarter.

Thank you very much.

Thank you.

Our next question comes from David Taylor of David P. Taylor and Company.

Yeah, thank you.

I, too, am very impressed with the quarter, and I am impressed with the goals you announced, Rick, also, and I'm pleased to hear them.

I have a few assorted questions.

I was completely surprised by this joint venture.

As you know, I tend to be up on the details of the business, but I somehow missed it.

Could you tell me more about the joint venture?

We actually announced this joint venture on a previous conference call, and it is for distribution of our licensed brands in Germany and France, with -- was then our existing partner in, or distributor in France, and we also, I believe, filed an 8-K on the distribution, on this joint venture as well, so we look at it as a very promising venture to distribute our licensed brands that we are introducing in Germany and France, and that includes Hugo Boss, Lacoste, and Tommy Hilfiger.

So it gives rather than just go selling it to a distributor, being able to sell through a distributor, but also going directly to retail and having part of that sales and profitability.

Okay.

Okay.

Yeah, you expect the JV to be profitable for the year?

I mean, I know the first quarter is a light quarter.

Yes, we do expect it to be profitable for the year; however, as you have to realize, this is really the start-up year, and we're really starting off particularly, with Hugo Boss and opening new doors, so we have the infrastructure in place, and now it's getting the doors and the sales up to speed, so we would expect it to be slightly profitable this year, yes.

Okay. , Do you have any -- could you tell us how you're positioned in Belk, as you probably know there was announcement out of Finley yesterday that they are losing 75 doors to a privately owned Company that's selling out to Belk.

Are you in both operators' stores?

David, I have to be honest.

I have to look into that, but I know that Belk is not a significant -- a significant account for any of our brands right now.

It's more in the fashion brands and in the fashion brands we do do a business with Tommy Hilfiger, and we have done in the past, and that goes directly to the department store, not through license.

Not through a lease department.

Right.

Okay.

It's not significant at all.

Okay.

Thank you very much.

Thank you. [OPERATOR INSTRUCTIONS] Our next question comes from Arnold Brief of Goldsmith & Harris.

Two questions.

One, could you update us on what progress you've made, specifically, in China and general, what plans for expansion do you have in the Far East and, in addition to that, and the second question is I think that you've sort of done this in the past, but I'd like maybe just a summary of the whole situation, in terms of your license brands, the five brands, the price points that you are targeting, the product differentiation in terms of the consumer you're targeting, each of the license brands for, how you're approaching the marketing for each of those?

Sure.

First, China continues to be a major focus market for the company and Movado.

We continue to improve our position in China marketplace, specifically right now for Movado, and one of the things that we have done, and as we've strengthened, and this will not take place until the second half of the year, we will be strengthening our management team with hiring a senior executive who will be joining the company in the second half of the year to head up the Movado Far East marketplace, with specific focus on China and Hong Kong, so we're very excited about that and believe that the first major step to really strengthening our presence there is through strengthening our management team, and we have embarked on that.

In terms of our license brands, and I think I covered that in my comments as well, our focus is purely to tie in with the DNA of each of our licensing partners, and we believe that each one of them has a, specifically, very different DNA from Tommy Hilfiger to Juicy Couture to Hugo Boss, at least in our minds and in the consumers' minds, they have a very specific brand identity.

And you can see that from the modern lines of Hugo Boss to the very whimsical design lines of Juicy, and so it's actually quite, in our -- from our point of view, quite easy to focus specifically on what each brand stands for, and carry out, and execute those strategies in a highly differentiated way.

I know you've done this before, but can you just summarize the price points for each of the brands?

The price points, they're in our K and -- but I can, specifically, Coach is from $230 to $500, Tommy, from $65 to $125, Hugo Boss is from $195 to $695, and we're just launching Juicy between $200, $250 and $700, and Lacoste, we haven't launched yet.

Any indication at all?

Lacoste will be in the $100 to $500 price range.

Thank you very much.

Okay

Thank you.

Our next question is coming from Jason Asaeda of Standard & Poors.

Hi, good morning.

Great quarter.

I just had a question about the Juicy launch.

Will it be for both men and women or just women, initially?

No.

We are initially launching for just women.

Okay.

That will be launched in -- our deliveries to our customers will be towards the middle of the third quarter and will be launched at retail probably close to in time for holiday.

Great.

Thank you very much.

Thank you.

That does conclude today's question-and-answer session.

I'll now turn the floor back over to management for any closing comments.

I would like to thank all of you for participating today.

Clearly, we are very pleased with our first quarter results which reflect a very strong sales performance.

Our brands continue to perform well at retail, and we look forward to the opportunities that lie ahead for both our established brands and younger businesses.

Thank you for your participation and have a fabulous day!

I would like to thank all of you for participating today.

Clearly, we are very pleased with our first quarter results which reflect a very strong sales performance.

Our brands continue to perform well at retail, and we look forward to the opportunities that lie ahead for both our established brands and younger businesses.

Thank you for your participation and have a fabulous day.