Mount Movado Group, Inc (MOV), a Swiss fine watch manufacturer and distributor which first integrated design, production and distribution, on Tuesday announced its second quarter earnings results. The company grew its quarterly earnings by 83% from a year earlier, topping the analyst estimates, thanks to the improvement of profit margin and sales growth.
As of the quarter ended July 31 this year, the company’s earnings were $8.1 million, or $0.32 per share, higher than the prior year same period’s $4.4 million, or $0.18 per share. The 2011 second quarter earnings included a pre-tax profit of 2 cents per share. The second quarter earnings report also showed revenue rose 4.2% from a year ago to $118 million. The total profit margin increased to 55.7% from 53.8% in the same period last year. Market analyst surveyed by Thomson Reuters had averagely expected the second quarter earnings would be 18 cents per share on revenue of $122 million.
Efraim Grinberg, president and CEO of Movado Group, said that they are very excited to re-launch Ebel and ESQ in the third quarter and expect continuous growth in business. Analysts on average estimate earnings per share of $0.59 for the third quarter.
Mount Movado also raised its guidance for the full year, and estimates to generate earnings of $1.4 per share and grow revenue by 10% to $51 million. The company previously expected earnings of $1.15 per share on revenue of $505 million. Analysts averagely estimate the company’s full year earnings of $1.24 per share on revenue of $508 million.
Stock price performance:
MOV stock price has cumulatively risen more than 94% this year, making it one of the best stocks this year. The stock traded up 17.44% after its second quarter report, hitting a 52-wek new high of $36.12. MOV stock crossed above the 50-day and 200-day moving averages earlier this month, which are currently standing at $25.28 and $22.7, respectively. On the basis of the latest closing price, Mount Movado’s market capitalization reached $888.97 million.
The slowdown in of economic growth in emerging markets and United States as well as the recession in Eurozone recession seem to indicate that the growth in sales of luxury items should be slowing, but the good financial results may evidenced that the situation is not as bad as we thought, especially for the relatively small group of people who can afford to buy luxury goods. In addition, other luxury goods manufacturers also recently released better-than-expected quarterly results and saw gains of their share prices. PVH Corp (PVH) stock was up 4.84% Tuesday and Warnaco Group Inc (WRC) rose 2.97%.This may indicate a cyclical comeback of the luxury consumer goods industry.
Analysts are also bullish on MOV stock, according to the data provided by FactSet, analysts averagely give a “BUY” rating on this stock, indicating it one of the best stocks worthy of consideration.
About the company:
Movado Group, Inc. designs, sources, markets and distributes fine watches, consisting the brands of Movado, Ebel, Concord, ESQ, Coach Watches, HUGO BOSS Watches, Juicy Couture Watches, Tommy Hilfiger Watches, Lacoste Watches and Ferrari Watches.