Movado Q4 Adj. Profit Tops View, Ups Dividend; Sees FY15 Results Above Estimates

(RTTNews) - Luxury watchmaker Movado Group, Inc. (MOV) reported Wednesday a decline in fourth-quarter profit, hurt by higher charges. Adjusted earnings topped analysts' estimates, while top line missed their view. The company also announced higher dividend, and said it sees fiscal 2015 earnings and sales above analysts' current estimates.

In pre-market activity, Movado shares gained $2.41 or 5.73 percent, and traded at $44.44.

For the fourth quarter, net income attributable to the company declined to $7.19 million or $0.28 per share from last year's $7.92 million or $0.31 per share.

The latest quarter results included a pre-tax charge of $8.3 million or $0.20 per share, relating to the company's strategy of reducing the presence of ESQ Movado while expanding the Movado brand offering in certain retail doors. The results also included a $0.05 per share charge related to a charitable contribution.

The prior year's charges were $4.9 million or $0.13 per share related to a sales allowance, partly offset by a benefit of approximately $0.8 million or $0.03 per share, related to various tax adjustments.

Adjusted net income, which excluded items, was $12 million or $0.46 per share, compared to $10.5 million, or $0.41 per share a year ago. On average, six analysts polled by Thomson Reuters expected earnings per share of $0.30 for the quarter. Analysts' estimates typically exclude one-time items.

Quarterly net sales grew 7 percent to $132.26 million from $123.59 million last year, led by growth in the licensed brand category. Adjusted net sales went up 9 percent year-on-year to $140.1 million. Three analysts estimated revenues of $143.50 million for the quarter. On a constant dollar basis, adjusted net sales improved 8.4 percent.

Adjusted gross margin was 53 percent, compared to 52.6 percent last year. Adjusted operating income increased 43.5 percent to $14.4 million.

Further, Movado said its Board of Directors approved a 25 percent increase in its quarterly cash dividend to $0.10 for each share of the company's outstanding common stock and class A common stock. This dividend will be paid on April 21 to all shareholders of record as of the close of business on April 7.

Looking ahead to fiscal 2015, the firm sees net income to increase to about $63.5 million or $2.44 per share, and net sales to increase nearly 10.7 percent to $640 million. Analysts project annual earnings per share of $2.38 on sales of $638.10 million.

In fiscal 2014, net income was $50.9 million or $1.97 per share and net sales were $570.3 million.

The company also projects gross margin percent to be approximately flat to this year, and operating profit to grow about 19 percent to $90 million.

President and Chief Operating Officer Rick Coté stated, "Looking at fiscal 2015, our strategies are in place to continue this momentum with the ESQ reallocation strategy announced today, as well as continued benefit from Coach and Ferrari."