Shares of Movado Trade at 5 year Highs Following Significant Earnings Beat

MavadoMOV, a designer of fine watches, posted an impressive second-quarter earnings beat Tuesday morning, causing its shares to trade at a five year high. The company reported a second-quarter EPS of $0.32, higher than the $0.18 that investors anticipated. Revenues were reported at $118M, lower than the expected $122M, but it was the profit of $0.32 per share that investors were excited about. Further fueling margins, Movado reported that it had decreased its operating expenses by 1.6 percent. Movado also updated their fiscal year 2013 guidance in light of the earnings beat. The company placed its new guidance for fiscal year EPS at about $1.40, much higher than its previous prediction of $1.15, and above investor estimates of $1.24. Efraim Grinberg, Movado's Chairman and Chief Executive Officer, stated, “Our positive momentum continued in the second quarter driven by the ongoing success of our strategic initiatives, which fueled a solid increase in net sales, expansion in gross margin and a more than doubling of operating income as compared to the second quarter last year. He went on to comment that the company's expansion strategies and frugal management of expenses helped drive the earnings beat. The company also stated that the third-quarter holds a re-launch of its Ebel and ESQ collections, which are expected to help fuel continued growth. Movado commented that its brands such as Tommy Hilfiger and Concord have added to the gain, giving the company extended reach. Shares of Movado have been performing exceptionally over the past year, up over 100 percent since September 2011. Following a similar trend to that of Tiffany & Co.TIF, it would seem that luxury brands have managed to adapt their strategies to an economy that some analysts would say isn't hospitable to their high price points. Shares of Movado traded up over 16 percent Tuesday around $35.05.