Movado Group, Inc. (NYSE: $MOV) is a renowned luxury watchmaker and designer of high-quality timepieces. Headquartered in Paramus, New Jersey, it boasts a portfolio of prestigious brands, including Movado, Concord, EBEL, and others. With a strong focus on innovation and craftsmanship, Movado Group has established itself as a leader in the luxury watch industry.
On April 2, 2024, Movado Group announced the appointment of Debbie Forman-Pavan as its new President of North America Sales. Forman-Pavan succeeds Alan Chinich, who has held the position for nearly two decades and will retire in July after a transition period as an adviser.
Forman-Pavan Joins Movado Group
Forman-Pavan brings extensive experience in the luxury and contemporary accessories sector, having previously served as Chief Commercial Officer at Renfro Brands and Executive Vice President of the accessories division at Global Brands Group, where she oversaw brands like Michael Kors, Calvin Klein, and Kate Spade.
“We are thrilled to have Debbie Forman-Pavan join the Movado Group family,” said Movado Group Chairman and CEO Efraim Grinberg. Her proven track record of success and wealth of experience make her an invaluable addition to our team.
Forman-Pavan Honored to Join Movado
Expressing her enthusiasm for the new role, Forman-Pavan stated, I am honored to join the organization and look forward to working with and becoming a part of the team. I have always admired the renowned, iconic global watch brands under the Movado Group portfolio. I am looking forward to building upon the existing platform in place to amplify our growth across North America.”
Movado Q4 Performance
In its fourth quarter fiscal 2024 results released on March 26, 2024, Movado Group exceeded analysts’ earnings expectations by 2.8%. Despite a 7.5% decline in fourth-quarter revenues compared to the previous year, totaling $179.6 million, the company still outperformed analysts’ predictions. The company reported fourth-quarter EPS of $1.00 and adjusted EPS of $1.03.
Net sales declined 5.7%, falling to $194.3 million from $206 million in the fourth quarter of 2022. The drop was mainly due to lower wholesale sales, partially balanced by increased sales at Movado Company stores.
In Q4, gross profit was $109.3 million (56.2% of net sales), down from $120.8 million (58.7% of net sales) in Q4 2022 due to unfavorable channel and product mix changes, plus fluctuating exchange rates. Operating expenses rose slightly to $83.1 million from $82.6 million, with adjusted expenses decreasing to $82.4 million from $82.9 million.
Operating income decreased to $26.1 million from $38.2 million, with adjusted operating income at $26.8 million from $37.9 million. The net income declined to $22.7 million, compared to $31.4 million in the same period of the prior year. Adjusted net income reached $23.3 million, a 25.32% decrease from the $31.2 million recorded in Q4 2022.
Strong FY24 for Movado: EPS & Revenue Beat
In fiscal 2024, Movado Group delivered a positive financial performance, achieving revenue of $673 million, which is in line with forecasts. The company attained an EPS of $4.12 and an adjusted EPS of $4.22, surpassing analyst expectations.
Net sales rose 2.7% to $751.9 million, driven by growth in International wholesale and Movado Company Stores. As a result, operating income increased slightly to $120.4 million, with adjusted operating income reaching $123.2 million.
Net income also experienced an uptrend, reaching $94.5 million, while adjusted net income climbed to $96.8 million, marking a 3.64% increase year-over-year. Operating expenses grew in fiscal 2023, primarily due to higher payroll and marketing costs associated with supporting the sales increase. However, lower performance-based compensation helped partially offset these expenses.
Movado Group ended the fiscal year with cash reserves of $251.6 million, slightly lower than the previous year. However, inventory levels increased significantly by 16.2% compared to the same period in the prior year.
Outlook for Fiscal 2025
Movado Group maintains a cautious outlook for fiscal year 2025 due to growing economic concerns, a weaker spending environment, and rising interest rates and inflation.
The company expects fiscal 2025 net sales of $725 million to $750 million, with first-half sales declining 9% to 12% compared to the prior year.
Projected gross profit is approximately 56.0% of net sales, and operating income is expected to range from $80 million to $85 million. The anticipated effective tax rate is 22%, and earnings are $2.70 to $2.90 per diluted share.
Movado Dividends & Share Repurchase
In recognition of its strong financial position, Movado Group announced a cash dividend of $0.35 f per share, both payable on April 23, 2024
In Q4 2023, the company repurchased around 26,000 shares under a share repurchase program authorized on November 23, 2021. As of January 31, 2024, Movado had $17.9 million remaining under the program.
MOV Stock Update
On Tuesday, April 1, 2024, MOV shares concluded at $27.34, reflecting a decrease of 1.58% compared to the previous day’s closing price of $27.78. As of midday on Wednesday, the stock was up 0.26%, trading at $27.41 per share.
The company’s market capitalization stood at $604.938 million. Over the past 52 weeks, Movado Group has experienced a positive change of 7.22%, indicating a gradual uptrend in its stock performance. In contrast, the S&P500 index witnessed a significantly higher 52-week change of 27.27%.
The 50-day moving average is $27.84, closely paralleled by the 200-day moving average at $27.80. This similarity indicates that both short-term and long-term stock price trends are nearly the same, suggesting consistent performance over both periods. With 15.64 million shares outstanding, Movado boasts a trailing P/E ratio of 13.27.
Is MOV Stock a Buy?
Movado Group’s recent appointment of Debbie Forman-Pavan as President of North America Sales and its performance in fiscal 2023 showcase resilience and potential within the company.
Despite challenges projected for fiscal 2024, including economic uncertainties, Movado Group maintains a solid financial position, evidenced by its dividends, share repurchase program, and stable stock performance. Investors may find Movado Group’s steady trajectory and strategic initiatives promising, potentially making MOV stock a buy.
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