Movado didn’t seem to have any issues selling watches in the second quarter as the company beat profit forecasts and increased sales. Movado delivered earnings of 50 cents a share, much better than the Zack’s estimate of 42 cents a share.
Net income was $12.1 million, compared to $12.2 million in the second quarter of fiscal 2015. The luxury watchmaker also reported that revenue came in at $145.6 million, higher than the FactSet estimate of $142 million.
Efraim Grinberg, chairman and chief executive officer, stated, “We are pleased with our second quarter results which included increased sales, expansion in gross margin and operating income above last year, despite a challenging retail environment and significant currency headwinds. Our Movado and licensed brands continue to outperform the overall watch category.”
Following the disappointments from Swatch and the introduction of the Apple iWatch, many investors have been worried about Movado’s ability to weather the difficult watch environment. The stock has dropped 39 percent for the past year.
However, Movado will be introducing it own first connected timepiece during the fourth quarter and the company believes it is well positioned for the second half of the year. Movado reaffirmed guidance for fiscal year 2016 in the range of $2 to $2.10.
Movado also increased its gross profit in the second quarter to $79 million compared to last year’s $77.6 million. Movado was able to take selective price increases, sourcing improvements and favorable foreign currency exchange rates.
Even though the company was positive about the back half of the year, it made cautionary statements alluding to the recent turmoil in financial markets.
Rick Coté, vice chairman and chief operating officer, stated, “While we are maintaining our guidance at this time, we do believe there is uncertainty in the global economic environment as we enter the second half of the year.”
Movado stock closed higher by 4.2 percent to $22.32 on Wednesday ahead of its earnings.