Movado Q2 Results Miss Estimates, Backs FY Outlook - Update

(RTTNews) - Luxury watchmaker Movado Group, Inc. (MOV) Tuesday reported a decline in second-quarter profit, reflecting higher tax provision, despite about 4 percent rise in sales. Earnings per share, as well as revenues missed analysts' expectations. The company backed its outlook for the fiscal year.

Looking ahead, the firm anticipates sales growth to accelerate during the second half of the year.

For the second quarter, net income attributed to the company slightly decreased to $12.15 million or $0.47 per share from $12.45 million or $0.48 per share in the prior year. Adjusted net income for the prior-year quarter was $11.5 million or $0.44 per share, excluding a tax benefit.

On average, seven analysts polled by Thomson Reuters expected the company to report profit per share of $0.54 for the quarter. Analysts' estimates typically exclude special items.

Provision for income taxes increased to $4.91 million from $4.29 million in the preceding year.

Net sales for the quarter grew 3.8 percent to $143.59 million from $138.30 million a year ago. The company said its revenue growth was driven by growth in the Movado brand and the licensed brand and retail categories. Analysts expected revenue of $152.99 million for the quarter.

Efraim Grinberg, chairman and chief executive officer of the company said, "With the second quarter, we have achieved 18 consecutive quarters of increased operating performance, attributed to the disciplined execution of our growth strategies and supported by powerful innovation and compelling owned and licensed brands."

For fiscal 2015, the company still expects net income to increase to about $63.5 million or $2.44 per share, and anticipates net sales to increase around 10.7 percent to $640 million.

Analysts expect the company to report fiscal 2015 profit per share of $2.46, on revenue of $640.17 million.

Further, the board has approved payment of a cash dividend of $0.10 per share, on September 19, 2014, to shareholders of record on September 5.

MOV closed Monday's regular trading at $44.04 on the NYSE. In the pre-market activity on Tuesday, the shares are down 5.36 percent.