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Operator
Good day, everyone, and welcome to the Movado Group, Inc. First Quarter Fiscal 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'd 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, and thank you all for joining us this morning for Movado Group's first quarter conference call. I want to open my comments by recognizing how upsetting I found the recent senseless deaths of George Floyd, Ahmaud Arbery and Breonna Taylor. Over the last 10 days, we have had numerous discussions with our associates over the issues of racial discrimination. And as a company, we have tried to do what we can to support the continuation of the discussion. Racism exists and it has no place in our society, our country or our world.
As a company, we have been focused on having the difficult discussions surrounding race, diversity, inclusion and the biases that exist within all of us. We all need to do better. Our support goes out to the peaceful protesters who are focused on eliminating racism and discrimination from our planet. As a company, we have an obligation to take a position, and I know our employees feel very strongly about that.
As we entered this year, we had a solid strategy in place, focusing on growing our profits and preparing ourselves for continued growth in an evolving landscape for retail and the watch category. For the month of February and the beginning of March, we were exceeding our internal plan, efficiently managing our expenses even while continuing -- even while we were continuing to experience supply constraints due to the effects of COVID-19 in China. Then by the middle of March, COVID-19 began making its way throughout the rest of the world. With the safety of our colleagues and customers at the forefront, we acted swiftly to close most of our operations around the world, including our retail stores. Most of our wholesale customers began doing the same.
Our teams acted quickly to manage our expenses and our cash flow. We drew down approximately $30 million on our revolver and slowed the inflow of inventory into our warehouses. We began to manage our business remotely. I am proud of how proactively and effectively our teams executed around the world as can be seen by the strength of our balance sheet and the 26% reduction in adjusted operating expenses during the first quarter. We ended with almost $188 million in cash and with inventory slightly down from the same period last year despite significantly lower sales due to the pandemic. All of this was accomplished while seeing a reduction in our accounts payable and accrued liabilities of 29% from last year.
Our leadership team has developed a plan to optimize our results for the balance of the year, while continuing to build and prepare ourselves for the future. It is widely believed that the pandemic and the closure of many global businesses will accelerate trends already in progress, such as videoconferencing, work from home, the digitalization of marketing, and of course, the growth of e-commerce. While we had invested in these areas for a number of years, we recognize that the pandemic would provide for a sea change in the retail industry and our selling channels. Satya Nadella, the CEO of Microsoft, has said that they had seen 2 years worth of digital transformation in just 2 months.
In aligning with this belief, we know we have to adapt our company and our management structure to this new environment. To that end, today, we announced a significant realigning of our leadership team to make ourselves a truly consumer-focused company for this evolving environment.
We have elevated Behzad Soltani, our Chief Digital Officer and President of our Direct-to-Consumer business to Executive Vice President in charge of our whole commercial organization, including both our wholesale and Direct-to-Consumer businesses as well as our Digital Center of Excellence and our IT group.
We believe that we will now be able to place the consumer first wherever they choose to shop around the world from our own e-commerce sites to our wholesale accounts, their websites, our own retail doors and digital marketplaces. We will also see a much closer integration of our website and our ERP system, focusing on servicing our customers.
In addition, we have elevated Sallie DeMarsilis, our CFO, to Executive Vice President and Chief Operating Officer. In this role, she will add our end-to-end value chain and our global distribution operations to her responsibilities. Not only are these 2 proven executives within our team, but they will be supported by a seasoned and proven management team. Our company has been all about building and partnering with strong brands, connecting effectively with the consumer and designing beautiful products for them at compelling values.
We also have established tremendous collaborations with our wholesale partners around the world who we'll continue to support. We believe that the pandemic will have a sustained effect on global economies and markets, and we are bringing our expense infrastructure in line to maximize results while ensuring that we continue to support and build our brands through innovation and effective marketing.
As we operate in an economic environment with a higher level of uncertainty, we will maximize the variability of our operating expenses and commitments. We have always succeeded in adapting our organization to challenging environments. And I am confident that we will do that now. Our teams are energized by the challenge.
During this pandemic, we have seen a universal strengthening of our already strong e-commerce trends for both our own website as well as our customers' website. On movado.com, we saw double-digit growth despite the fact that our principal distribution warehouse in New Jersey was closed for the most of the month of April. Since reopening at the end of April, we have seen an acceleration in those trends.
Olivia Burton in the U.K. has also shown strong growth, and we have seen significant improvement in our MVMT website in both sales and profitability trends as we prepare to migrate them to the Salesforce e-commerce platform in July. We are encouraged by an improved performance in our customer acquisition metrics, and we are continuing to invest in our digital capabilities.
In China, which enjoyed the effects of the business closures related to the pandemic early in our quarter, we have seen strong demand in our e-commerce channel throughout and improving trends in our retail business. Today, all of our retail doors in China have reopened. As certain markets around the world have begun to reopen, many of our customers are exceeding both their own and our own sales expectations.
In Europe, our strongest performance has been in Germany, where May wholesale sales are approaching the prior year.
In North America, we have opened 14 of our 47 Movado company stores and expect to have 41 opened by June 17. In the 14 stores we have opened, we have performed better than expected, with sales down 10.6% when compared to the same period last year. In all of these stores, we have increased the safety measures to protect both our employees and our customers.
As a whole, we are seeing some green shoots as businesses reopen, but we are still planning conservatively with a focus on maximizing cash flow for the year. We are taking the necessary actions to rightsize our cost structure on an ongoing basis.
I am pleased that in a challenging quarter, we protected our gross margin, delivering 50.8% on an adjusted basis despite lower volumes and increased tariffs in the U.S. versus last year. While operating in an environment with limited visibility prevents us from being able to provide a specific outlook, we are focusing on maintaining a high level of flexibility in order to optimize our performance while maintaining a solid balance sheet. This has been a start to the year that no one could have anticipated or prepared for, but I am very proud of our team's resilience and how they embraced the challenge and how they embraced the challenges and they have put us on a solid footing to operate within the current environment as we continue to open our business operations around the world.
I would now like to turn the call over to Sallie, who will provide details on our financial results.
Sallie A. DeMarsilis - Executive VP, CFO, COO & Principal Accounting Officer
Thank you, Efraim, and good morning, everyone. For today's call, given our attention has been on navigating the disruption to our business created by the COVID-19 pandemic, my remarks will focus on the key highlights of our first quarter of fiscal 2021, and then I'll provide an update on our financial performance.
As reported in this morning's release, the first quarter of fiscal 2021, we recorded 2 charges related to the impact on our business of the COVID-19 pandemic. First, we recorded $155.9 million in goodwill and intangible asset impairment charges associated with recent acquisitions. This noncash charge was $131.1 million after-tax or $5.66 per share. The company revised its internal forecast, resulting in a reduction in both current and future expected cash flows due to the COVID-19 pandemic in the uncertain business environment. As a result, during the first quarter of fiscal 2021, the company recorded impairment charges related to goodwill of $133.7 million and intangible assets related to MVMT's trade name and customer relationships of $22.2 million.
Second, the company took a $7.2 million charge, $5 million after tax or $0.22 per share for costs due to the impact on our business of the COVID-19 pandemic. The $7.2 million included $3.5 million related to an additional inventory reserve, which impacted gross margin; and $3.7 million related to unfunded trade show deposits, additional reserves against accounts receivable and restructuring charges, which impacted SG&A.
For the first quarter of fiscal 2021 -- I'm sorry, the first quarter of fiscal 2021 was also impacted by $700,000 of pretax amortization of intangibles and deferred compensation for the MVMT acquisition recorded prior to the impairment and $700,000 of pretax amortization of the acquired intangible assets for Olivia Burton. The first quarter of fiscal 2020 had similar amortization of $1.5 million related to MVMT and $700,000 related to Olivia Burton.
Our press release also describes these items and includes a table of GAAP and non-GAAP measures. The balance of my remarks will exclude the special items just discussed. For the first quarter of fiscal 2021, sales were $69.7 million as compared to $146.5 million last year. Currency negatively impacted sales by approximately $700,000. As Efraim mentioned, for the first half of this quarter, we were exceeding our internal plan. The second half of our first quarter was adversely impacted as the company and the majority of our wholesale customers closed all of their retail stores as shelter-in-place orders were imposed. Sales declined across all segments, owned brands, licensed brands and company stores, and we're down in both our U.S. and International businesses. Although e-commerce sales were strong, they were not nearly enough to offset the declines in our wholesale and company stores businesses.
Gross profit was 50.8% of sales compared to 53.9% in the first quarter of last year. The decrease in gross margin was primarily driven by reduced leverage on fixed costs due to lower sales, additional special U.S. tariffs, unfavorable channel and product mix and the unfavorable change in foreign currency exchange rates.
As part of the swift actions taken to control spend, which I will discuss next, we were able to reduce a portion of the fixed cost and cost of goods sold. Operating expenses were $53 million as compared to $71.9 million over the same period of last year. The decrease is driven by actions taken to minimize all nonessential operating costs. This includes rightsizing marketing expenses to the lower revenue base while maintaining a focus on digital and e-commerce customer acquisitions and temporarily reducing the company's workforce, either through furloughs or other available government programs in various countries and temporarily reducing compensation for the company's management and salaried employees as well as its Board of Directors.
The reduction in sales resulted in an operating loss of $17.6 million for the first quarter of 2021. An income tax benefit of $4.8 million, a 27.1% effective tax rate, was recorded in the first quarter of fiscal 2021 as compared to an income tax expense of $1.3 million or 19.2% effective tax rate in the first quarter of fiscal 2020. The tax benefit was favorably impacted by the CARES Act, which enables the company to carry back U.S. net operating losses generated in fiscal 2021 into prior taxable years with a U.S. statutory rate of 35%, partially offset by the recording of valuation allowances on certain foreign deferred tax assets.
Net loss in the first quarter was $12.9 million or $0.56 per share as compared to net income of $5.6 million or $0.24 per share in the year ago period.
Now turning to our balance sheet. In addition to minimizing nonessential expenses, strengthening the company's balance sheet and enhancing financial flexibility has been a top priority. During the quarter, we drew down an additional $30 million under our credit agreement to add to cash balances. We are tightly managing inventories by delaying or canceling inventory receipts as deliveries are prioritized, and we have reduced capital expenditures, allowing only projects with short-term return on investment, such as certain digital initiatives.
As we announced with our year-end release, we have also suspended the company's quarterly cash dividend and share repurchase program until further notice.
Cash at the end of the first quarter was $187.8 million as compared to $150.7 million in the prior year period. Our total liquidity as of April 30, 2020, was $205 million, including the availability under our credit facility. Accounts receivable was $49.8 million, down $36 million from the same period of last year, primarily due to the decrease in sales. Inventory at the end of the quarter was relatively flat to the same period of last year at $177.8 million due to the actions taken to cancel or delay inventory receipts.
Capital expenditures for the quarter were just under $1 million and depreciation and amortization expense was $3.9 million, which included $1.2 million related to the amortization of acquired intangible assets of Olivia Burton and MVMT recorded prior to the impairment. As just mentioned, capital expenditures will be at a minimum this year, although we plan to complete the migration of MVMT's e-commerce platform, our largest e-commerce business, to our global platform.
As announced today, on June 5, the company amended its existing credit agreement to increase flexibility regarding its financial maintenance covenants in light of the impact of the COVID-19 pandemic. This amendment was effective as of April 30, 2020.
In terms of outlook, while we are not providing specific guidance, we would like to share that we expect our second quarter to continue to be significantly impacted by the crisis. Although we expect trends will improve in the second half of the year, our top line is expected to remain below last year.
As previously mentioned, we are implementing strategic cost reductions across all functional areas to better align our cost structure to the lower sales level to maximize our operating results.
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 and Company.
Ross A. Collins - Associate
This is Ross on for Oliver. I'm just wanting -- the 90% productivity of stores that have reopened is pretty impressive, definitely among the highest that we've heard in our coverage. Just can you talk about what you attribute the strength there to, whether you think it's pent-up demand or some sort of stimulus benefit or otherwise? It would be helpful.
Efraim Grinberg - Chairman & CEO
Sure. Okay. So I actually think that this pandemic has kind of, to a certain extent, really fortified the need for a certain amount of brick-and-mortar centers and especially outdoor ones. And so we're seeing that consumers like to shop, and they're coming to our stores and shopping at a pretty high level. And while traffic is generally down in those stores, about 40%, we're seeing higher conversion rates and higher average transactions, so both of those things. When people are going into stores, they're really going with the thought of buying. And so we're excited about that. Our people are excited to be back in the stores, and we're opening more every week.
Ross A. Collins - Associate
Got it. And then in terms of the digital prioritization, some that you already announced this morning, can you just talk about how you expect digital and physical to interplay kind of over the longer term versus how it does today?
Efraim Grinberg - Chairman & CEO
Sure. So we obviously expect digital to be a bigger part of our business, both in our direct-to-consumer business and our e-com businesses. So in that
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that over the last 2 -- 3 years, we've acquired Olivia Burton and MVMT, which are more digitally native brands and reach their consumers at a high level through digital aspects. And in addition to that, with our retailers, we're seeing a much more significant part of their business around the world become e-commerce oriented. And so in many cases, even during the first quarter, their sales performance penetrated to a much higher level on the digital front, obviously, but also made up for some of the losses in stores that were closed.
And then on the third front, you have marketplaces. People like Amazon and Tmall in China that, I believe, have a big future also for us. And we're seeing that around the world as well, Amazon in the U.S. and Europe, Tmall in China. So I think the idea of aligning to reach the consumer wherever they choose to shop, I think, will pay some significant benefits for the company.
Ross A. Collins - Associate
And just a follow-up on the cost side of that. I guess in terms of sequencing the investments, could you just talk about that in terms of building out the digital -- your digital presence, but also against the context of cash preservation? And then secondly, on the marketing side, just how the marketing strategy might evolve in terms of how you show up to your customers as you build out digital capabilities?
Efraim Grinberg - Chairman & CEO
Sure. So we've actually invested most of the cash resources that we've needed to invest in our digital initiatives over the last few years. So for example, what we're doing now with MVMT is rolling them on to our Salesforce -- on our Salesforce cloud solution for e-commerce. And so our whole company will be on one platform. The rest of the company is already on that platform. And we have all the support services in organization in place to support that. From a customer acquisition and digital investment point of view, we think also by really consolidating a lot of that effort also will gain significant efficiencies. We've already begun to experience that towards the end of the first quarter and as we enter the second quarter.
Operator
There are no further questions at this time. I'd like to turn the call back over to management for any closing remarks.
Efraim Grinberg - Chairman & CEO
So yes, really, I would like to thank everybody for participating with us today. I would like to thank our team for the fabulous job that I believe we've been -- they've been doing around the world in navigating this challenging environment. And while the world has been in a challenging place, I am optimistic that better days are ahead on many fronts and that progress will be made both on the racial initiatives that have been going on and protests that have been occurring as well as dealing with the pandemic and the world returning to a new normal. And we're preparing ourselves very diligently for that. So thank you very much.
Operator
Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.