Post Earnings Coverage as Movado Reported Q4 and Annual Results for FY17; Announces Dividend

Upcoming AWS Coverage on Brunswick

LONDON, UK / ACCESSWIRE / March 30, 2017 / Active Wall St. announces its post-earnings coverage on Movado Group, Inc. (NYSE: MOV). The Company reported its financial results for the fourth quarter fiscal 2017 (Q4 FY17) and full year 2017 (FY17) on March 20, 2017. The Paramus, New Jersey-based Company’s quarterly net sales was down by 8.7% y-o-y. Register with us now for your free membership at:

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One of Movado Group’s competitors within the Recreational Goods, Other space, Brunswick Corp. (NYSE: BC), is estimated to report earnings on April 27, 2017. AWS will be initiating a research report on Brunswick following the release of its earnings results.

Today, AWS is promoting its earnings coverage on MOV; touching on BC. Get our free coverage by signing up to:

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Earnings Reviewed

In Q4 FY17, Movado’s net sales fell to $130.79 million from $143.26 million reported in Q4 FY16. Net sales for the reported quarter lagged behind market expectations of $137.11 million. Moreover, on a constant dollar basis, net sales declined 7.5% y-o-y in Q4 FY17.

The watchmaker reported net income attributable to Movado of $5.23 million, or $0.22 per diluted share, in Q4 FY17 compared to $7.89 million, or $0.34 per diluted share, in Q4 FY16. Wall Street had expected the Company to report net income of $0.23 diluted per share. Meanwhile, in Q4 FY16, the Company’s adjusted net income, excluding $1.33 million of expenses, net of tax, related to operating efficiency initiatives and other items, came in at $9.22 million, or $0.40 per diluted share.

For full year FY17, Movado’s net sales were $552.75 million, down 7.1% from $594.92 million reported in FY16. The Company reported net income attributable to Movado of $35.06 million, or $1.51 per diluted share, in FY17 compared to $45.09 million, or $1.90 per diluted share, in FY16. Additionally, the Company’s adjusted net income attributable to Movado for FY17 came in at $37.06 million, or $1.59 per diluted share, versus $48.96 million, or $2.06 per diluted share, recorded in FY16.

Operating Metrics

During Q4 FY17, Movado’s gross profit was $64.69 million, or 49.5% of sales, compared to $75.35 million, or 52.6% of sales, in previous year’s same quarter. The Company had reported adjusted gross profit of $75.28 million, or 52.5% of sales, in Q4 FY16. The Company attributed the decline in adjusted gross margin to unfavorable shift in channel and product mix, partially offset by the favorable impact of changes in foreign currency exchange rates.

In the reported quarter, operating income declined to $7.44 million from $11.54 million in Q4 FY16. Furthermore, the adjusted operating income during Q4 FY16 which excludes $1.33 million of expenses, net of tax, related to operating efficiency initiatives and other items, came in at $12.87 million.

Cash Flow & Balance Sheet

During the year ended on January 31, 2017, Movado’s cash provided by operating activities totaled $58.42 million compared to $74.59 million in in the year ago same period. The Company had cash and cash equivalents balance of $256.28 million as on January 31, 2017, compared to $228.19 million at the close of books on January 31, 2016. Furthermore, the Company’s long-term loans payable to bank decreased to $25.00 million as on January 31, 2017, from $35.00 million as on January 31, 2016.

Dividend and Share Repurchase

In its earnings press release, Movado’ Board of Directors declared cash dividend in the amount of $0.13 for each share of the Company’s outstanding common stock and class A common stock, payable on April 14, 2017, to shareholders of record at the close of business on March 31, 2017.

During Q4 FY17, the Company repurchased approximately 20,000 shares under its share repurchase program. Furthermore, as on January 31, 2017, the Company had $46.1 million remaining under the $50.0 million share repurchase authorization which expires on September 30, 2017, subject to extension or earlier termination by the Board.

Outlook

In its guidance for full year FY18, Movado’ management expects net sales to be in the range of $515.0 million to $530.0 million. Operating income for FY18 is forecasted to be between $50.0 million and $55.0 million. Additionally, the Company projects net income during FY18 to be in the range of $33.0 million to $36.3 million, or $1.40 to $1.55 per diluted share. The Company also informed Wall Street that FY18 outlook excludes the pre-tax charge of approximately $7.0 million to $10.0 million related to cost savings initiatives, and the Company expects the majority of this charge to be recorded in Q1 FY18.

Stock Performance

At the close of trading session on Wednesday, March 29, 2017, Movado Group’s stock price rose slightly by 0.41% to end the day at $24.30. A total volume of 72.08 thousand shares were exchanged during the session. The Company’s share price has gained 13.84% in the past six months. The Company’s shares are trading at a PE ratio of 16.11 and have a dividend yield of 2.14%. Additionally, the stock currently has a market cap of $572.02 million.

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