Movado Group, Inc.
(MOV - Snapshot Report
) continues to struggle in a depressed luxury retail environment. This Zacks Rank #5 (Strong Sell) recently cut its full year guidance for the second time this year.
Movado Group makes watches in its Switzerland manufacturing facilities under the brands Movado, Ebel, Concord, ESQ Movado, Coach, Tommy Hilfiger, Hugo Boss, Juicy Couture, Lacoste and Ferrari. It also operates about 38 Movado retail stores globally.
Earnings Miss and Sales Fall
On Aug 25, Movado reported fiscal second quarter 2017 results and missed on the Zacks Consensus Estimate by 4 cents. Earnings were $0.27 versus the consensus of $0.31.
It was the first earnings miss in the last 5 quarters.
Net sales fell 12% to $128.1 million from $145.6 million in the year ago quarter. On a constant dollar basis, they fell 11.2%.
The company called it a "challenging retail and economic environment."
Cutting Full Year Guidance Again
Given the market conditions in both the fashion watch market and in luxury retail, in general, it's not surprising that Movado cut its full year guidance for the second time this year.
It cut its full year EPS guidance last quarter by 30 cents.
Net sales for the year are now expected to be in the range of $550 million to $560 million.
However, it is optimistic about the upcoming holiday season, including increasing its television advertising to support Movado in the United States.
The analysts aren't optimistic, however.
Fiscal 2017 earnings estimates were cut in the last 30 days. The Zacks Consensus Estimate has fallen to $1.41 from $1.61 just 90 days ago. Earnings are expected to decline 31% in fiscal 2017. The company made $2.06 last year.
Estimates are trending lower for fiscal 2018 as well. The fiscal 2018 Zacks Consensus has fallen to $1.54 from $1.73 over the last 30 days.
Are Shares Cheap?
Shares are up off the lows despite the cut in the full year guidance.
They're not exceptionally cheap either. Movado trades with a forward P/E of 16.
Investors will get a dividend for their patience. It's currently yielding 2.3%.
The rest of the jewelry industry doesn't look much better for investors. It's competitor Fossil Group, Inc. (FOSL - Analyst Report) also has had its estimates cut. Earnings are expected to decline 67% this year.
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