Eroding financials and lowered guidance didn’t make for a beneficial combination.
Many of Movado Group‘s (MOV -14.66%) goods are quite attractive, but the company’s stock wasn’t looking too pretty on Thursday. On the back of dispiriting quarterly results, investors peeled away from the stock, leaving it nearly 15% down in price at market close. The benchmark S&P 500 index did much better by comparison, “only” shedding 0.3% during the session.
Revenue and profitability declines
Movado’s second quarter of fiscal 2025 saw the watch and fashion conglomerate post net sales of $159.3 million, down slightly from the $160.4 million of the same quarter the previous year. Net income according to GAAP standards fell much more precipitously, to $3.7 million ($0.16 per share) against Q2 2024’s more than $8 million.
Movado is not a stock closely followed by analysts, so consensus estimates were not available. The company did not meet its own expectations during the period; it quoted CEO Efraim Grinberg as saying that this was “due to the challenging consumer spending environment compounded by increased expenses to support future growth.”
The company also declared a fresh quarterly dividend. Matching its nine predecessors, this is to be $0.35 per share, payable Sept. 30 to investors of record as of Sept. 16. At the most recent closing share price, the payout would yield 7.3%, which is quite high for a company in the consumer goods sphere.
Guidance revised downward
With those conditions firmly in mind, Movado revised its full fiscal-year 2025 guidance. It now feels it will book net sales of $665 million to $675 million; previously it was guiding for $700 million to $710 million. The per-share earnings forecast also got a chop, to $0.90-$1 for the year, down from the preceding $1.20 to $1.30.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
