Normally, when you talk about watches, you end up talking about movements -- that is, the internal mechanics of the watch. Well, some of the more jittery shareholders of luxury watchmaker Movado
While the earnings side of things looked all right, sales were a bit soft -- mostly because of some weakness in sales of the Concord brand in some overseas markets -- and guidance seemed a bit conservative (which is not uncommon with this company).
Looking at the actual numbers, sales were up a modest-looking 5%, but margins expanded again and the company's adjusted operating profit grew nearly 30% from last year's level. The boutiques continue to do quite well (with comp-store sales up over 14%), and while Ebel and Concord brands were both down in the quarter, the Ebel business was profitable for the full year for the first time in quite a while.
The story here still revolves around the customer's appetite for luxury goods. Movado provides watches across a broad spectrum of price points, holds valuable licenses from Coach
Now, that's not to say that it's all easy sledding. For this next year, the Ebel brand faces tougher comps, the Concord business needs more work, and the company will continue to have to invest money in promoting new brands and rolling out more boutique locations. There's also a dual class structure in place here that gives the Grinberg family effective control of the whole enchilada.
If you believe that consumers can continue to shell out for high-end goods, or at least that upper-end concepts like Movado, Tiffany
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).