Movado slashes its full year outlook as demand for watches falls; shares plunge

Markets Associated Press

Slowing sales of its watches prompted Movado to warn Friday that its third- and fourth-quarter results are likely to come in below Wall Street expectations. The company also cut its outlook for the full year, and its shares fell 20 percent in premarket trading.

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Movado said its namesake watches are not selling well overseas. And some of the watches it makes for other fashion brands, including Lacoste and Scuderia Ferrari, are also underperforming.

"I am disappointed in our third quarter performance and our expectations for this trend to continue into the fourth quarter," Movado CEO Efraim Grinberg said in a statement.

For the third quarter, the company expects earnings between 86 cents per share and 87 cents per share. Analysts expected $1.13 per share, according to FactSet. Movado expects revenue of $188.6 million for the same quarter, while analysts expected $216.6 million.

For the fourth quarter, it expects earnings between 18 and 23 cents per share. Analysts had expected 50 cents per share. Movado expects revenue between $132 million to $137 million. Analysts had expected $154.1 million.

Due to the lower-than-expected results for those two quarters, Movado cut its full-year outlook. For the full fiscal year, which ends Jan. 31, Movado now expects earnings between $1.80 and $1.85 per share. That's down from its previous forecast of $2.44 per share. Revenue is now expected to be between $585 million and $590 million, down from its previous forecast of $640 million. Analysts expected earnings of $2.40 per share and revenue of $635.2 million for the full year, according to FactSet.

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Shares of Movado Group Inc. fell $7.75 to $30.76 in trading before the market opened Friday. As of Thursday's closing price, its shares are down 12.5 percent since the beginning of the year.