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Operator
Good day, everyone, and welcome to the Movado Group, Inc., Second Quarter 2021 Earnings Conference Call. As a reminder, today's call is being recorded and may not be reproduced in whole or in part without permission from the company. At this time, I would like to turn the conference over to Rachel Schacter of ICR. Please go ahead.
Rachel Schacter - SVP
Thank you. Good morning, everyone. With me on the call is Efraim Grinberg, Chairman and Chief Executive Officer; and Sallie DeMarsilis, Chief Financial Officer.
Before we get started, I would like to remind you of the company's safe harbor language, which I'm sure you're all familiar with. The statements contained in this conference call, which are not historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release. If any non-GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release.
Now I'd like to turn the call over to Efraim Grinberg, Chairman and Chief Executive Officer of Movado Group.
Efraim Grinberg - Chairman & CEO
Thank you, Rachel. Good morning, and welcome to Movado Group's second quarter conference call. This morning, I will share some highlights for the quarter and the strategic initiatives that we are focused on as we begin the second half of the year. Sallie will then review our financial results in detail. We would then be glad to take questions.
For the last 2 quarters, we have been operating amid a global pandemic, which has greatly curtailed consumer discretionary retail businesses, led to significant business closures around the world and caused dramatic economic dislocations globally. We remain focused on ensuring the safety and health of our employees, customers and the communities where we operate. Within that context, I am proud of how our teams have reacted and the results that we have delivered for the second quarter.
In the challenging environment that we continue to operate in, our teams delivered sales better than our internal expectations, strong gross margins and close to breakeven results on an adjusted basis. We cut expenses by almost $30 million, reduced our inventories by more than $27 million year-on-year and finished the quarter with over $170 million of cash while paying back $37 million of debt. During the quarter, we took a number of actions that will enable us to weather the climate that we are operating in and position the company to emerge strongly as we have done during previous crises.
While very painful to do, we have reduced the size of our corporate headcount by 24% and lowered our estimated current year operating expenses by $90 million as we evolve into a more consumer-facing company. We currently are running our business with many of our teams operating in remotely and have prepared ourselves to be able to continue to do so until the effects of the pandemic subside. We have reopened all of our stores and are achieving high levels of productivity despite reduced operating hours. We've continued to invest in our digital initiatives and are seeing strong results, both for our own sites and our wholesale partner sites. Movado.com sales ran up 128% for the quarter, and we continue to see those trends accelerate.
Our oliviaburton.com business in the U.K. grew by approximately 100%. And movement.com significantly improved profitability during the quarter as a result of improved return on ad spends.
At wholesale, our department store channel continues to perform well in a difficult environment, and we have seen markets like Germany and France exceed last year's sales results. In China, we had a 16% increase in sales for the quarter, with trends continuing to accelerate. We continue to spend very carefully. Our marketing expense is highly variable and is being allocated as close to the time of execution as possible, so that we can incorporate current sales trend information into our level of investment.
Driven by product innovation, we have strong brands within both our owned and our licensed brand portfolios that provide an advantage as we have seen continued demand for them across our digital platform and in our brick-and-mortar locations. I am very pleased that we were able to announce our partnership with Calvin Klein, a tremendous global brand for watches and jewelry beginning in 2022. We believe that the Calvin Klein brand has potential -- has tremendous potential in our categories, and we are extremely excited about this partnership.
As we look to the second half of the year, we are operating in a highly uncertain environment, and we are prepared to continue to focus on controlling our expenses and our inventory purchases. We expect the decline in sales during the next 2 quarters to improve each quarter, and we are focused on delivering profitability during the second half, while continuing to maintain a very strong balance sheet.
Across our brands, we are developing our digital efforts and introducing strong innovation on the product front. In Movado, we will introduce a new Movado Museum SE, a sport luxury collection starting at $995 that will be supported in our holiday television campaign. We will also be expanding our Movado jewelry collection featured exclusively on movado.com.
At Olivia Burton, we will be featuring Sparkle Florals, a glittery interpretation of iconic florals. In Movement, we'll be introducing our new legacy slim collection, opening at $115 and the minimal sport automatic, a limited edition of 500 units and a $350, our most expensive Movement watch ever. This August, we introduced our Lucky 7 limited edition honoring Movement's seventh anniversary and our 500 watches sold out on our website in under 5 minutes.
Within our licensed brand portfolio, we expect to drive results with a number of new product introductions this fall. Including our Tommy Hilfiger Mason collection, featuring branded rubber straps and a sporty look. In HUGO BOSS, we will be featuring globe charter, a new 46-millimeter Athleisure Chronograph collection with bold pops of color. In Coach, we are introducing Arden, a beautiful new design with a signature C crown protection and C001, a new analog digital design for men that will be supported with a strong social media campaign. For Lacoste, we are introducing Boston, a sport-inspired collection, featuring Lacoste's iconic Green Dial.
As the world evolves in an accelerated manner, we continue to believe that great brands, innovative design and compelling values will continue to generate demand from consumers, and we are focused on reaching them in an increasingly digital environment wherever they choose to shop, whether that be on our own website, in our brick-and-mortar locations through our wholesale partners' stores and websites or e-commerce marketplaces.
I would now like to turn the call over to Sallie to review our financial results.
Sallie A. DeMarsilis - Executive VP, CFO, COO & Principal Accounting Officer
Thank you, Efraim, and good morning, everyone. For today's call, I will address the key highlights of our second quarter and year-to-date period of fiscal 2021. And then I'll provide an update on our financial position. My comments today will focus on adjusted results. Before I begin, I will point out the new matters which impacted the GAAP results for the second quarter of fiscal 2021.
Please refer to the description of all of the special items included in our results for the first half of fiscal 2021 and fiscal 2020 in our press release issued earlier today, which also includes the reconciliation table of the GAAP and non-GAAP measures.
In the second quarter of fiscal 2021, the company took a $7.4 million pretax charge, which equates to $5 million after-tax or $0.22 per share related to a restructuring plan as part of the company's corporate initiatives to reduce operating expenses across all functional areas. Also during the second quarter of fiscal 2021, the company recorded a $1.3 million pretax gain, which equates to $800,000 after tax or $0.04 per share on the sale of a nonoperating asset in Switzerland. Once again, the balance of my remarks will focus on adjusted results.
For the second quarter of fiscal 2021, sales were $88.5 million as compared to $157.8 million last year. During the first quarter of fiscal 2021, the impact of COVID-19 resulted in the closure of the company's retail stores and the majority of the stores of the company's wholesale customers. During the second quarter of fiscal 2021, many worldwide regional and local governments lifted or modified restrictions. By the end of the second quarter, all of the company's retail stores and the majority of the stores of the company's wholesale customers had reopened. However, these stores have been impacted by a decrease in retail traffic and reduced hours at many locations.
As we progressed through the second quarter, sales trends improved as COVID-19 restrictions began easing in various stages across the world, enabling some return of foot traffic in the company's retail stores and those of its wholesale customers. However, due to the closure of the stores during most of the quarter, most of the second quarter, sales declined across all segments. Owned brands, licensed brands and company stores were down in both our U.S. and international businesses, despite strong e-commerce sales, both on our own websites and those of third-party marketplaces.
Gross profit was 51.2% of sales compared to 54.1% in the second quarter of last year. The decrease in gross margin was primarily driven by unfavorable channel and product mix, the unfavorable change in foreign currency exchange rates and additional special U.S. tariffs. These are partially offset by considerable savings on fixed costs, albeit on lower sales.
Operating expenses were $45.9 million as compared to $75.1 million over the same period of last year. The decrease is driven by actions taken to minimize all nonessential operating costs, including rightsizing marketing expenses to the lower revenue base while maintaining a focus on digital and e-commerce customer acquisition. The furloughing of employees and temporary salary reductions for a portion of the period followed by permanent staff reductions.
The controlled spending in the second quarter contributed to a nearly breakeven quarter with a small operating loss of $600,000 for the second quarter of fiscal 2021. We reported an income tax expense of $600,000 in the second quarter of fiscal 2021 as compared to an income tax expense of $1.8 million in the second quarter of fiscal 2020. Net loss in the second quarter was $1.7 million or a loss of $0.07 per share as compared to net income of $8.3 million or $0.36 per share in the year ago period.
Now turning to our year-to-date results. Sales for the 6-month period ended July 31, 2020, were $158.2 million as compared to $304.4 million last year. The decrease in net sales was primarily attributable to the ongoing COVID-19 pandemic and the temporary closure of our retail stores and the majority of the stores of our wholesale customers. Gross profit was $80.8 million or 51% of sales as compared to $164.4 million or 54% of sales last year. The decrease in gross margin rate for the first 6 months was the result of the reasons similar to the second quarter just discussed. For the 6 months ended July 31, 2020, operating loss was $18.2 million compared to an operating income of $17.4 million in fiscal 2020. Net loss was $14.7 million or a loss of $0.63 per diluted share as compared to net income of $13.9 million or $0.60 per diluted share in the year ago period.
Now turning to our balance sheet. In addition to minimizing nonessential expenses, maintaining the company's strong balance sheet has been a top priority. We are closely managing inventories, and we have reduced capital expenditures, primarily allowing only projects providing a return on investment, such as certain digital initiatives. As previously announced, we suspended our quarterly cash dividend and share repurchase program until further notice.
Cash at the end of the second quarter was $170.2 million after repaying $37 million on a revolving credit facility during the second quarter. This compares to $134.9 million in the prior year period. Accounts receivable was $60.1 million, down $33.6 million from the same period of last year, primarily due to a decrease in sales. Inventory at the end of the quarter was $173.4 million as compared to $201 million last year. The reduction is due to the actions taken to closely manage our working capital. In fact, we had positive operating cash flow of over $14 million in the second quarter of fiscal 2021. Capital expenditures for the 6 months were $1.9 million and are lower than the first half of last year by over $5 million as a result of the disciplined actions just discussed.
Depreciation and amortization expense was $7.2 million, which included $1.9 million related to the amortization of the remaining acquired intangible assets of Olivia Burton and Movement. In terms of outlook, we are not providing specific guidance. While we expect results to continue to be below last year, we expect trends to sequentially improve in the second half of the year.
I would now like to open the call up for questions.
Operator
(Operator Instructions) Our first question comes from the line of Oliver Chen with Cowen.
Oliver Chen - MD & Senior Equity Research Analyst
The digital momentum has been impressive. Where do you expect penetration to go over time? And on the wholesale side, what are you seeing with distribution footprint there in terms of points of distribution relative to productivity? And how you're handling regionally different aspects of closures and markets? I would love insights there.
Efraim Grinberg - Chairman & CEO
Sure. So obviously, the performance of retail varies around the world, and as I said earlier, we've seen Germany and France basically returned to normal, the U.K. progressing really nicely. But then other markets like Latin America and India are more challenging. China, we've seen very strong momentum. And we're happy both digitally, and now we're starting to see it in brick-and-mortar as well. As we look at the U.S., you're seeing the best performance of retailers that have street side entrances at malls. And I think that, that's why department stores are doing better from a brick-and-mortar perspective. And department stores generally also have very good digital penetration. So we're seeing their digital businesses also growing exponentially. So I think digital will obviously have a significant growth in the future for the company, but it will be both through our own and through our wholesale partners and then digital marketplaces really all over the world. So we're seeing growth in Amazon in Europe and in Zalando in Germany. And I think those have a tremendous amount of potential.
Oliver Chen - MD & Senior Equity Research Analyst
So from -- how do we dimensionalize how big digital may become in those manifestations? And any guidance you could provide on relative margins that would help aid our modeling?
Efraim Grinberg - Chairman & CEO
Sure. I think it's -- for us, we look at it and try to maintain an equal sense of profitability from digital. When it's our own, it can have a higher rate of profitability than if it's a wholesale account. But I just think it's the natural evolution of where retail was going anywhere just on an accelerated basis due to the pandemic. So -- and one of the things that we've taken the opportunity to do, and I think is really evolved in an accelerated manner from a wholesale-focused company to a consumer-focused company, so serving the consumer wherever they want to shop. And I think that's really what the future is all about.
Oliver Chen - MD & Senior Equity Research Analyst
And Sallie, on the gross margin line, how might that trend going forward in terms of mix shifts and dynamics that you're seeing? And cash flow has been encouraging. A second quarter positive cash flow is sustainable throughout the year? I would also love your overall take on inventory. I mean, some retailers don't have enough inventory, some have too much. What's the cleanliness of your inventory relative to what you're seeing now? Supply chain hasn't been easy for people to deal within this dynamic environment.
Sallie A. DeMarsilis - Executive VP, CFO, COO & Principal Accounting Officer
Okay. So let's take -- we'll take it step-by-step, and I'm sure Efraim will pipe in, especially on the inventory and supply chain side. So gross margin, we're doing -- we're managing that very well, especially in light of what Efraim was talking about with things like the e-com and wholesale mix. So we've been -- we're very happy of how strong our gross margin is at over 50%, and we will continue to look at that. And obviously, part of that was taking a look at the fixed cost portion of any type of gross margin. So we're not being highly promotional or anything like that, that's going to deteriorate our margin because of being on sale or anything like that.
From a cash flow perspective, we're managing it very closely. We are thrilled with how this quarter was, having positive cash flow in the second quarter that was significantly impacted by a global pandemic is really a tribute to this whole organization with managing how we're doing things. We do have some seasonality to cash flow with third quarter is generally where we would be a little thicker with inventory and so forth as we head into holiday. So I would expect that we're going to be managing it very closely, but I would also expect that you do have some seasonality built in for cash flow. And I think on inventory, I know -- I'll have Efraim speak a few words and then I'll jump in, but we are watching that very closely.
Efraim Grinberg - Chairman & CEO
Yes. So internally, we're watching it really carefully. And I think our teams have been really reactive and planning ahead in terms of being able to manage our inventories. And our objective is obviously to continue to bring them down by the end of the year. I would think that the third quarter, we always -- is as we prepare for our fourth quarter shipments. So -- but I think they should be in pretty good shape. In retail, we feel pretty comfortable with where our inventories are and retail varies by brand and by channel. And especially as we see better-than-expected sales in brick-and-mortar locations, we see inventories beginning to decline and people needing replenishment. So that's a good sign. And retailers that have started up more slowly are in a heavier inventory position, and that's to be expected. But my expectation is that throughout the year, it'll continue to balance itself out and by the end of the year be in a really good balance.
Oliver Chen - MD & Senior Equity Research Analyst
Our last question is about Calvin Klein. Congrats on that deal. How do you see the distribution footprint there and the magnitude of this business? Also, where might the price points be? And how does it fit into your current portfolio to minimize cannibalization risk?
Efraim Grinberg - Chairman & CEO
Sure. So we actually feel really comfortable that it really has its own place in our portfolio as a minimalist iconic brand and we don't really have anything like that. It is a mega brand of any of the fashion brands. It's one of the top, I would say, 3 or 4 American designers, and we have a few of those now. And -- but also has a great global footprint, which is where our licensed brand business is really strong is on the international side, especially in Europe and has great, great opportunities in Asia, where the brand has been really strong in China. So we see it as a long-term partnership. We obviously partner with PVH on our Tommy Hilfiger brand as well, and we're thrilled to have this opportunity. Price points are probably within the $150 to $500 price range. And what we're also really excited about is that it includes both watches and jewelry, and jewelry for us is a growth opportunity. Today, we have Tommy Hilfiger jewelry, which is now becoming a meaningful business, especially in Europe. We launched HUGO BOSS jewelry in the U.K. in -- at the beginning of the year and it's gotten a very good reaction, and both Olivia Burton, Movement and Movado have jewelry. And so we believe that that's a growth opportunity for the company in the next several years.
Operator
We have no additional questions at this time. So I'd like to pass the floor back to management for closing comments.
Efraim Grinberg - Chairman & CEO
Okay. I would like to thank everyone for participating with us today and wish everybody a safe and a safe balance of the summer, as it comes to an end. And hopefully, everything in the world from a health point of view will continue to improve. Thank you very much.
Operator
Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time.