Movado Group EPS Grows over 90%; Shares Jump 14.3%

Movado Group (NYSE: MOV) shares jumped 14.3% on May 26 after the American watchmaker delivered a blowout first-quarter results and also provided upbeat FY2023 guidance.

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The quarterly beat was driven by increased net sales aided by the growth in wholesale customers’ brick and mortar stores, as well as Movado company stores.

Q1 Beat

Adjusted earnings of $0.82 per share almost doubled year-over-year and massively beat analysts’ expectations of $0.46 per share. The company reported earnings of $0.43 per share for the prior-year period.

Further, net sales jumped 21.2% year-over-year to $163.4 million and exceeded consensus estimates of $144 million.

Regionally, U.S. net sales grew 6.6% year-over-year, while international net sales jumped 35.3%.

On top of that, gross margin expanded 420 bps year-over-year to 59.2%, driven by favorable changes in channel and product mix, partially offsetting increased shipping costs.

FY2023 Outlook

Based on robust Q1 results, management issued financial guidance for FY2023.

The company now forecasts net sales to be in the range of $780 million to $800 million, versus the consensus estimate of $789 million.

Operating income is expected to be in the range of $125 million to $130 million while gross profit is expected to come in at 58.0%.

CEO’s Comments

Movado Group CEO, Efraim Grinberg, commented, “As we look ahead, we believe our Company is well-positioned to advance our strategic priorities in an increasingly uncertain environment.”

He further added, “We remain confident about our growth prospects and expect to continue to benefit from our compelling product innovation and diversified brand portfolio, including the recent successful launch of Calvin Klein watches and jewelry.”

Wall Street’s Take

The stock has picked up a rating from one analyst in the past three months. Cowen & Co. analyst Oliver Chen has a Hold rating on the stock with a price target of $43 (17.45% upside potential).

Bloggers Weigh In

TipRanks data shows that financial blogger opinions are 100% Bullish on MOV stock, compared to a sector average of 65%.

Conclusion

Notably, shares of the watchmaker have gained over 22% over the past year, significantly outperforming the benchmark indices.

The company was able to deal with the ongoing macro-headwinds aided by a strong balance sheet as well as a diversified business model with popular global brands.

Robust international growth coupled with strong momentum bodes well for the stock in the coming months.

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