Movado Group Inc. MOV shares are trading lower after the company reported first-quarter results.
The company reported quarterly earnings per share of 13 cents, beating the street view of 12 cents.
Quarterly revenues of $136.669 million missed the analyst consensus of $145.200 million.
Net sales decreased 5.7% (decreased 6.1% on a constant dollar basis), owing to declines in wholesale customers’ brick and mortar stores and Movado Company Stores.
Movado generated a gross margin of 55.3% in the quarter under review, as compared to 56.6% in the year-ago period. The decrease in gross margin percentage was primarily the result of unfavorable changes in channel and product mix, along with the decreased leverage of certain fixed costs as a result of lower sales.
The company generated operating income of $3.3 million, compared to $10.9 million in the prior year period.
“As planned, we will begin to ramp up our marketing investments during the second quarter to support our strategic growth opportunities, including an exciting new Movado campaign that will launch in the fall,” Efraim Grinberg, Chairman and Chief Executive Officer, stated.
“We expect our amplified marketing messaging to grow brand awareness and deliver a return to sales growth in the second half of the year,” Grinberg added.
Dividend: Movado approved a cash dividend of $0.35 per share, which will be paid on June 26 to shareholders of record as of the close of business on June 12.
Outlook: The company continues to expect fiscal 2025 net sales of approximately $700 million – $710 million versus the $700.8 million estimate and EPS of $1.20 – $1.30 against the consensus of $1.12.
Movado sees gross profit of approximately 55% of net sales, and operating income of approximately $32 million to $35 million.
Price Action: MOV shares are trading lower by 1.61% to $26.33 at last check Thursday.
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