Movado Group (NYSE: MOV) reported fiscal 2018 third-quarter earnings on Oct. 31. The luxury-watch maker is enjoying strong growth in its international markets, making management optimistic that the company can close out the year on solid ground.
Movado Group results: The raw numbers
Adjusted operating income
Data source: Movado Group Q3 2018 earnings press release.
What happened with Movado Group this quarter?
Net sales rose 6% year over year to $190.7 million, and 5.4% when excluding the impact of foreign currency fluctuations.
"This performance was delivered even as the U.S. retail environment remains challenged," Chairman and CEO Efraim Grinberg said in a press release. "International sales growth led our performance with particular strength in Europe, Latin America, China, and the Middle East."
Strong international sales are powering Movado's results. Image source: Getty Images.
Movado also continues to shed costs to strengthen its profitability. Adjusted gross margin -- which excludes acquisition-related charges -- improved 1 basis point to 54.9%. And adjusted operating margin improved to 17.6%, up from 17.3% in the prior-year period.
All told, adjusted net income -- aided by a lower effective tax rate -- jumped 15% to $24.3 million, or $1.04 per share.
During the third quarter, Movado repurchased 49,000 shares for a total of approximately $1.3 million. The company's board of directors approved a $0.13 cash dividend to be paid on Dec. 15, to shareholders of record as of Dec. 1.
"We have a strong balance sheet with $155.5 million of cash, affording us the ability to continue to reinvest in our business while returning value to shareholders," Grinberg said.
Movado's solid third quarter performance led it to boost its fiscal 2018 full-year guidance, which now includes:
- Net sales of $550 million to $555 million, up from a previous estimate of $530 million to $545 million.
- Adjusted operating income of $58 million to $60 million, up from $53 million to $58 million.
- Adjusted net income of $39.7 million to $41 million, compared with $35.5 million to $38.8 million.
- Adjusted EPS of $1.70 to $1.75, versus $1.50 to $1.65.
"We believe we are well positioned as we enter the final quarter of the year," Grinberg added. "Our strong product innovation and marketing programs will allow us to capitalize on the holiday season."
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