Movado Group Plunges 10% Despite Better Than Expected Q4, Share Buyback Announcement & Dividend Hike

Shares of Movado Group, Inc MOV plunged more than 10 percent on Thursday after the company reported a better than expected fourth quarter print but issued a weak guidance. Movado Group said that it earned $0.40 per share in the fourth quarter on revenue of $143.3 million. Wall Street analysts were expecting the company to earn $0.39 per share on revenue of $140.7 million. Gross profit for the quarter rose to $75.4 million from $67.4 million in the same quarter a year ago. Movado Group also announced that its Board of Directors approved a new $50 million share repurchase program in addition to an 18 percent increase in it quarterly dividend to $0.13 per share. Efraim Grinberg, Chairman and Chief Executive Officer, stated, "We are very pleased to end fiscal 2016 with a solid fourth quarter and to have delivered on the annual revenue and earnings targets that we set at the beginning of the year. Our sales increase of 5.5% on a constant currency basis, gross margin expansion and adjusted operating income growth of 3.7% in fiscal 2016 reflect our ability to navigate and execute in a challenging retail environment. Both our fourth quarter and fiscal 2016 performance demonstrate the strength of our Movado brand and licensed brand portfolio, which continue to outperform the overall watch market, as well as the early success of our new collection launches. We are proud of the strong execution by our teams around the world." In addition, the company announced that its Vice Chairman and Chief Operating Officer, Rick Cote, will retire after 16 years with the company and a career in the consumer products industry that spans 31 years. The executive will serve as a non-management member of the Board of Directors and continue advising the company. Finally, Movado Group provided full year fiscal 2017 guidance and expects to earn $1.85 to $2.00 per share on revenue of $585 million to $600 million. Both of these figures fell short of the $2.27 per share and $615 million Wall Street analysts were expecting.
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Posted In: EarningsNewsConsumer ProductsMovado GroupRick CoteWatch Companies
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