Movado Group Q2 Profit Rises; Boosts Outlook, Dividend; Shares Up

(RTTNews) - Luxury watchmaker Movado Group, Inc. (MOV) reported Tuesday a profit for the second quarter that increased from last year, reflecting improved operating margins and double-digit sales growth driven by the strength across all Movado and licensed brands. Adjusted earnings per share topped analysts' expectations.

The company also raised its earnings and sales forecast for the full-year 2014, citing strong results in the first half of fiscal 2014, while boosting quarterly cash dividend by 60 percent.

Following the announcement, the company shares are currently gaining more than six percent in pre-market deals.

"We continued our positive momentum from the beginning of the year reporting a 17% increase in sales and a 59% rise in operating income in the second quarter. Our topline strength was fueled by strong innovation across our Movado and licensed brands and included the continued successful introduction of our Scuderia Ferrari watch brand and our newly repositioned Coach watch brand into the fashion watch category," Chairman and CEO Efraim Grinberg said in a statement.

The Paramus, New Jersey company reported net income of $12.45 million or $0.48 per share for the second quarter, higher than $8.06 million or $0.32 per share in the prior-year quarter.

Excluding a $1 million or $0.04 per share tax benefit, adjusted net income for the latest quarter was $11.5 million or $0.44 per share.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.32 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter grew 17.2 percent to $138.30 million from $118.03 million in the same quarter last year.

The company noted that operating margin improved 320 basis points to 12.3 percent from last year's 9.1 percent, while gross margin contracted 160 basis points on increased operating expenses.

Additionally, the company's board has approved a 60 percent increase in its quarterly cash dividend to $0.08 per outstanding common stock and class A common stock, payable on September 20 to all shareholders of record as of the close of business on September 6, 2013.

Looking ahead to fiscal 2014, Movado raised its earnings guidance to about $1.90 per share from the prior forecast of about $1.80 per share, and now projects revenues between $575 million and $580 million, up from the prior expectation of $570 million to $575 million.

Street is currently looking for full-year 2014 earnings of $1.82 per share on annual revenues of $570.55 million.

MOV closed Monday's regular trading session at $38.00, down $1.00 on a volume of 0.29 million shares.