Watchmaker Movado Group Inc.’s (NYSE:MOV) shares climbed more than 17% on Tuesday after the company reported better-than-expected second-quarter profit while raising its earnings outlook for the full-year, thanks to healthier gross margins and sustained demand for its both namesake and other licensed brands.
The maker of globally renowned brands such as Lacoste Watches, Hugo Boss Watches and Juicy Couture Watches, Movado Group went public back in 1993, and has been consistently rolling out new products with the help of strong marketing techniques to expand its target customer base.
Besides, the company also implements stringent operations management. It keeps a tight control over inventory level including operating expenses, in order to bolster its earnings.
Commenting over Movado’s earnings outlook, Oamr Saad, an analyst at ISI Group wrote, “We view this (forecast raise) as another positive data point supporting the aspiring designer watch category, of which Fossil and Movado have a virtual monopoly.”
Just few days ago, Fossil Inc. (NASDAQ: FOSL) also posted quarterly results which surpassed Wall Street’s expectation; besides the company also raised its full-year guidance as it expects strong wholesale business in the APAC region while performance in the Europe is also expected to improve.
For the quarter which ended on July 31, Movado reported a profit of $8.1 million, or 32 cents a share, up $4.4 million, or 18 cents a share, in the year earlier quarter.
In the previous year quarter, earnings per share also included a pretax benefit of 2 cents a share from the sale of an asset.
Sales increased by 4.2% to $118 million. The company also announced that it will be re-launching its Ebel and ESQ brands. “As we begin the third quarter, we are excited about our upcoming re-launch of our Ebel and ESQ collections and expect continued strength within our Movado and licensed brands,” said the Company’s Chief Executive Efraim Grinberg while speaking at the conference call.
Analysts polled by Thomson Reuters had forecasted earnings of 18 cents a share on revenue of $122 million.
Gross margin stood at 55.7%, up from 53.8% in the year earlier quarter as the company reduced its fixed costs.
Movado Group also upwardly revised its full-year outlook on Earnings to $1.40 a share from earlier estimation of $1.15 a share. Sales are also expected to climb by 10% to $510 million, in fiscal 2013.
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