- Movado Group Inc MOVEMENT Shares plunge over 17% during Thursday’s trading session after the company received a disappointing FY24 outlook and warnings of difficult retail market conditions.
- MOV reported a 5.7% decline in revenue in the fourth quarter of FY23 year-over-year to $194.27 million, beating the estimate of $184.40 million.
- The decrease in net sales reflected a decrease in wholesale sales, partially offset by an increase in Movado Company stores.
- US net sales declined 6.3% and international net sales declined 5.0%.
- Gross margin for the quarter decreased 250 basis points to 56.2%, reflecting unfavorable changes in channel and product mix and the unfavorable impact of foreign exchange rates.
- Operating margin was 13.4% and operating income for the quarter fell 31.6% to $26.1 million.
- The Company held $251.6 million in cash and cash equivalents as of January 31, 2023.
- Inventories at the end of the fourth quarter increased 16.2% to $186.2 million.
- Adjusted earnings per share of $1.03 beat analyst estimates of $0.86.
- dividends: The Company’s Board of Directors authorized a special dividend of $1.00 per share in addition to the regular quarterly dividend of $0.35 per share. Both dividends are payable on April 19, 2023 to shareholders of record on April 5, 2023.
- As of January 31, 2023, the Company had $21.0 million remaining under the stock repurchase program.
- “Looking ahead, we believe we will continue to face a difficult retail market in our largest regions, the US and Europe,” said CEO Efraim Grinberg.
- outlook: Movado posts FY24 revenue of $725-$750 million, missing Street View’s $814 million and falling short of FY23 revenue of $751.9 million.
- The company expects FY24 earnings per share to be in the range of $2.70 to $2.90, down from the estimate of $4.61. The company’s earnings per share for FY23 were $4.12 and adjusted earnings per share were $4.22.
- For the first half of fiscal 2024, the company expects revenue to decline by 9% to 12% from the prior-year period.
- Price promotion: MOV shares trade 17% lower at $27.42 on the last day
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