Time Stands Still for Movado Group, Inc (MOV)

Movado Group, Inc (MOV) 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.

Movado Misses on Earnings 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 27 cents per share versus the consensus of 31 cents per share.

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.”

Movado Cuts 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 after 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, Movado 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 MOV Shares Cheap?

Shares are up off the lows despite the cut in the full year guidance.






Yet, they’re not exceptionally cheap either. Movado trades with a forward P/E of 16.

Investors will get a 13 cents per (quarterly) dividend for their patience, however, currently yielding 2.3%.

The rest of the jewelry industry doesn’t look much better for investors. It’s competitor Fossil Group Inc (FOSL) also has had its estimates cut. Earnings are expected to decline 67% this year.

More Stocks to Sell. Now.

Beyond our Bear Stock of the Day, today’s list of 220 Zacks Rank #5 Strong Sells demand even more urgent attention.

If any are lurking in your portfolio or Watch List, they should be removed immediately. Many appear to be sound investments but, since 1988, such stocks have actually performed more than 11X worse than the S&P 500.

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