Why Movado Group Inc. Stock Popped Today

MarketsMotley Fool

What happened

Shares of Movado Group Inc. (NYSE: MOV) were up 15.8% as of 1 p.m. EDT Thursday, after the Swiss watchmaker announced stronger-than-expected fiscal fourth-quarter 2018 results and boosted its dividend.

Continue Reading Below

Movado's quarterly revenue grew 14.1% year over year (or 10.2% at constant currencies) to $149.2 million, well above the $132.5 million investors were expecting. That translated to adjusted earnings of $12 million, or $0.52 per share, up from from $0.22 per share in the year-ago period and far above consensus estimates for earnings of $0.26 per share.

So what

Movado chairman and CEO Efraim Grinberg credited the company's outperformance to strong momentum from its owned and licensed brands, including last year's roughly $84 million acquisition of Olivia Burton, as well as an acceleration in growth from subsidiaries in the U.K., France, and Germany. Movado's top line also included a solid 6.4% increase in comparable-store sales.

"Our fourth-quarter performance continues to demonstrate the power of our brands around the world and the strength of our organization," Grinberg concluded. "As we focus on expanding our online presence given an evolving retail landscape, we are encouraged by the progress made in the quarter with our digital initiatives in support of our global portfolio."

Now what

Looking ahead, Movado Group also increased its quarterly dividend by 54% to $0.20 per share -- a happy consequence of both Movado's strong balance sheet (with $214.8 million in cash at the end of the quarter) and expected benefits from recent tax reform.

Finally, for the full fiscal year of 2019, Movado expects net sales in the range of $605 million to $615 million, compared to Wall Street's estimates for full fiscal-year sales of just $571 million.

All things considered, there was nothing not to like about this stellar report from Movado. And it's no surprise to see the stock rallying in response.

10 stocks we like better than Movado GroupWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Movado Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of March 5, 2018

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Movado Group. The Motley Fool has a disclosure policy.