Movado Group (MOV +0.55%) reported fiscal 2018 fourth-quarter earnings on March 29. The luxury watchmaker is enjoying strong growth in sales and profits, prompting it to boost its cash payout to shareholders.
Movado Group results: The raw numbers
|
Metric |
Q4 2018 |
Q4 2017 |
Year-Over-Year Change |
|---|---|---|---|
|
Net sales |
$149.214 million |
$130.785 million |
14.1% |
|
Operating income |
$13.346 million |
$7.441 million |
79.4% |
|
Adjusted earnings per share |
$0.52 |
$0.22 |
136.4% |
Data source: Movado Group Q4 2018 earnings press release.
What happened with Movado Group this quarter?
Net sales jumped 14.1% year over year to $149.2 million, and grew 10.2% on a constant currency basis. Movado's results were boosted by its recent acquisition of Olivia Burton. A 6.4% rise in comparable sales for its Movado Company Stores and a 53% jump in Movado.com sales also contributed to the increase.
"Our fourth quarter performance continues to demonstrate the power of our brands around the world and the strength of our organization," Chairman and CEO Efraim Grinberg said in a press release. "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."
Moreover, Movado's profitability is improving. Adjusted gross margin rose to 52.7% from 49.5% in the fourth quarter of fiscal 2017, while adjusted operating margin came in at 9.6%, up from 5.7%.
All told, adjusted operating income surged 95%, to $14.4 million. And adjusted net income soared 130%, to $12 million, or $0.52 per share.
Capital returns
Movado repurchased approximately $3.6 million of its shares in fiscal 2018. The company has about $48 million remaining under its existing share repurchase program.
Movado also announced a 54% increase in its cash dividend payout.
"Given our strong balance sheet, including $214.8 million of cash, combined with the expected benefit from tax reform, we are pleased that today our Board approved an increase in our regular quarterly dividend to $0.20 per share," Grinberg said.
Movado Group is boosting its cash payout to investors. Image source: Getty Images.
Looking forward
Movado issued a financial forecast for fiscal 2019, including:
- Net sales in the range of $605 million to $615 million, up from $568 million in fiscal 2018.
- Operating income of approximately $68 million to $71 million, up from $43 million.
- Net income of $50.5 million to $52.8 million, compared to a loss of $15 million.
- EPS of $2.15 to $2.25, compared to a loss of $0.66 per share.
"Looking to fiscal 2019, we expect the positive momentum in our business to continue, which is reflected in our outlook," Grinberg said. "We are excited about the innovative products we are launching this year and remain focused on executing against our strategic initiatives, including digital, while also investing in our brands ahead of the long-term sustainable growth we see for our business."
