Please ensure Javascript is enabled for purposes of website accessibility

Movado Group Is Running Like a Finely Tuned Watch

By Steve Symington – May 30, 2018 at 2:23PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Swiss watchmaker just delivered a timely beat and raise. Here's what investors need to know.

Movado Group (MOV -0.11%) announced stellar fiscal first-quarter 2019 results on Wednesday morning, highlighting broad-based geographic strength as consumers continue to embrace the Swiss watchmaker's wares. Movado also boosted its full-year guidance, leaving shares up more than 16% in today's early trading.

Let's take some time, then, to better understand what drove Movado over the past few months, and what investors should be watching in the coming quarters.

Movado Museum Sport watch with brown leather band


Movado Group results: The raw numbers


Fiscal Q1 2019*

Fiscal Q1 2018

Year-Over-Year Growth


$127.1 million

$99.3 million


GAAP net income (loss)

$8.1 million

($4.2 million)


GAAP earnings (loss) per share




DATA SOURCE: MOVADO GROUP. *FOR THE QUARTER ENDED APRIL 30, 2018. GAAP = generally accepted accounting principles.

What happened with Movado this quarter?

  • On an adjusted (non-GAAP) basis, which notably excludes acquisition expenses, earnings were $8.7 million, or $0.37 per diluted share.
  • Movado's sales grew 22.2% on a constant currency basis.
  • The top line also included $2.2 million in sales related to the adoption of new accounting standards at the start of the fiscal year, namely from a slight timing shift between quarters for recognition of expected returns and markdowns.
  • Still, these results handily beat consensus expectations for earnings of $0.11 per share on revenue of $109.5 million.
  • Movado repurchased 30,500 shares this quarter, leaving $46.8 million remaining under the company's $50 million share-repurchase authorization.

What management had to say

Movado chairman and CEO Efraim Grinberg called it a "strong start to the year," crediting the company's "powerful portfolio of owned and licensed brands." The latter notably includes last year's roughly $78 million acquisition of Olivia Burton parent JLB Brands.

Grinberg elaborated in a press release:

Our first quarter results reflect the team's consistent ability to bring innovation to market that resonates with consumers around the world, which was further enhanced by the execution of our strategic growth priorities. We saw sales strength across regions and channels, generating strong results in our international markets as well as our outlet stores and e-commerce business. This top line momentum combined with gross margin expansion allowed us to deliver an increase in adjusted operating income of over 200%. We delivered these results while continuing to invest in our strategic growth initiatives including an increase in digital marketing and beginning to build out our digital center of excellence. Given our strong first quarter performance, we are raising our outlook for the year.

Looking forward

More specifically, Movado increased both ends of its previous full fiscal-year 2019 revenue outlook by $10 million, for a new expected range of $615 million to $625 million. Movado also anticipates operating income for the year in the range of $71 million to $73 million, and net income of $2.35 to $2.40 per diluted share. By contrast, most investors were only anticipating full fiscal-year earnings of $2.23 per share on revenue of $608.9 million.

All things considered, there was nothing not to like about this stellar quarter from Movado Group, especially given the increasingly crowded market for wearable technology. Even with Movado shares having nearly doubled in the year leading up to this report, it's no surprise that bullish investors are cheering once again today.

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

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Movado Group, Inc. Stock Quote
Movado Group, Inc.
$28.25 (-0.11%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.