Movado's Stock Drops After Disappointing Results And Outlook, Job Cuts
Shares of Movado Group Inc. dropped 1.3% in light premarket trade Monday, after the luxury watch maker reported fiscal fourth-quarter results that missed expectations, announced plans to cut jobs and provided a profit and sales outlook that was below expectations. For the fiscal fourth quarter of 2017, which ended Jan. 31, net income fell to $5.2 million, or 22 cents a share, from $7.9 million, or 34 cents a share, in the same period a year ago. The FactSet consensus for earnings per share was 23 cents. Sales declined 8.7% to $130.8 million from $143.3 million, missing the FactSet consensus of $136.9 million. For fiscal 2018, Movado expects adjusted EPS of $1.40 to $1.55, below the FactSet consensus of $1.60, and revenue of $515.0 million to $530.0 million, compared with expectations of $575.7 million. Because the company expects the retail environment to remain "difficult" this year, amid a shift from brick and mortar to e-commerce and a continuing challenging fashion watch market, Movado said it would reduce its workforce, primarily in North America and Switzerland. The company expects to record a charge of $7 million to $10 million, primarily in the fiscal first quarter, as a result of the job cuts and other streamlining initiatives, which are expected to reduce expenses by $12 million this year. The stock has plunged 18% year to date through Friday, while the S&P 500 has gained 6.2%.
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