Movado Group Inc (MOV) Aligns with EPS Projections, Net Sales Dip in FY2024

• Net Sales: Fiscal 2024 net sales reached $672.6 million, a decrease from the previous year.

• Earnings Per Share (EPS): FY2024 reported EPS at $2.06, adjusted EPS at $2.13, in line with quarterly estimates.

• Fourth Quarter Performance: Q4 net sales were $179.6 million with an EPS of $0.53 and an adjusted EPS of $0.55.

• Dividend: Board declares a quarterly dividend of $0.35 per share.

• Future Outlook: Fiscal 2025 net sales projected to be $700 million to $710 million with an EPS of $1.20 to $1.30.

Movado Group Inc (NYSE:MOV) released its 8-K filing on March 26, 2024, detailing its financial performance for the fourth quarter and the full fiscal year of 2024. The company, known for designing, developing, sourcing, marketing, and distributing fine watches, reported net sales of $672.6 million for the fiscal year 2024, marking a decline from the previous year's sales. Despite a challenging retail environment, the company's earnings per share (EPS) for the fiscal year aligned with analysts' estimates, reporting a GAAP EPS of $2.06 and an adjusted EPS of $2.13.

Movado Group Inc operates primarily through its Watch and Accessory Brands segment, which includes the design, manufacturing, and distribution of owned and licensed brand watches. The company also runs retail outlet locations in the United States and Canada through its Company Stores segment. The majority of its revenue is generated internationally, with a significant contribution from the Watch and Accessory Brands segment.

Fiscal Year and Fourth Quarter Highlights

For the fourth quarter, Movado Group Inc reported net sales of $179.6 million with a GAAP EPS of $0.53 and an adjusted EPS of $0.55. The company's Chairman and CEO, Efraim Grinberg, highlighted the success of holiday marketing initiatives and new product introductions, which resonated well with consumers despite retail challenges in the U.S. and Europe. Grinberg also emphasized the company's strategic investments in marketing and product innovation, which are expected to drive long-term growth.

The fiscal year 2024 saw Movado Group Inc navigate through a complex retail landscape, with a focus on evolving its strategy to leverage its brand portfolio. The company's investment in growth strategies, particularly in marketing and product innovation, is a significant move to build brand equity and market share in a competitive industry.

Financial Achievements and Challenges

Despite the decrease in net sales, Movado Group Inc's ability to maintain its EPS in line with estimates is a testament to its financial resilience. The company's strategic focus on marketing investments, especially in the U.S. and Europe, is expected to temporarily constrain earnings but is aimed at fostering sustained growth in the long term.

The company also announced a quarterly dividend of $0.35 per share, reflecting confidence in its financial stability and commitment to shareholder returns. Additionally, Movado Group Inc repurchased approximately 26,000 shares during the fourth quarter under its share repurchase program, indicating a proactive approach to capital management.

Looking Ahead

For fiscal 2025, Movado Group Inc anticipates net sales to range between $700 million and $710 million, with a projected gross profit of approximately 55% of net sales. Operating income is expected to be between $32 million and $35 million, with an EPS forecast of $1.20 to $1.30. The company plans to invest an incremental $25 million in marketing to drive long-term top-line growth, expecting the majority of revenue growth in the second half of the fiscal year.

As Movado Group Inc embarks on its investment growth strategy, the company's financial performance will be closely watched by investors and stakeholders. The balance between strategic investments and financial outcomes will be crucial for Movado's success in the competitive retail-cyclical industry.

For more detailed financial information and the company's full earnings release, please refer to the attached tables and the full 8-K filing.

Explore the complete 8-K earnings release (here) from Movado Group Inc for further details.

This article first appeared on GuruFocus.