Movado Group Q4 Profit Down; Issues FY15 Guidance; Dividend Up 25% - Quick Facts

(RTTNews) - Luxury watchmaker Movado Group, Inc.'s (MOV) fourth-quarter net income slid to $7.2 million, or $0.28 per share, from $7.9 million, or $0.31 per share, reported a year before. The company's adjusted net income amounted to $12.0 million, or $0.46 per share during the recent quarter. On average, 6 analysts polled by Thomson Reuters expected earnings per share of $0.30 for the quarter. Analysts' estimates typically exclude one-time items.

However, on a GAAP basis, quarterly net sales came in at $132.3 million, higher than $123.6 million in the fourth quarter of fiscal 2013, led by growth in the licensed brand category. Three analysts estimated revenues of $143.50 million for the quarter.

Adjusted net sales went up by 9.0% year-on-year to $140.1 million. This excludes the impact of the $7.8 million charge in the fourth quarter of fiscal 2014 for anticipated sales returns related to the ESQ reallocation strategy, as well as the $4.9 million charge related to the Coach repositioning initiative in the fourth quarter of fiscal 2013. On a constant dollar basis, adjusted net sales improved 8.4% year-over-year.

In the fourth quarter of fiscal 2014, Movado Group recorded a pre-tax charge of $8.3 million, or $0.20 per share, relating to its strategy of reducing the presence of ESQ Movado while expanding the Movado brand offering in certain retail doors. The company said it expects to reallocate certain of the ESQ Movado retail space in the second quarter of fiscal 2015 to drive incremental sales of its more productive Movado brand watch families and will continue to offer ESQ Movado in select retail locations as well as its direct-to-consumer outlet stores and at Movado.com.

Looking ahead to fiscal 2015, the firm sees net sales to increase nearly 10.7% to $640 million, gross margin percent to be approximately flat to this year, operating profit to grow about 19% to $90 million. Fiscal 2015 net income is projected to increase to about $63.5 million or $2.44 per share, reflecting a 28% anticipated effective tax rate. The company's forecast also assumes no unusual items for fiscal 2015. Analysts project annual earnings per share of $2.38 on sales of $638.10 million.

Additionally, the board approved a 25% increase in the company's quarterly cash dividend to $0.10 for each outstanding share of the company's common stock and class A common stock, paayable on April 21, 2014 to all shareholders of record as of the close of business on April 7, 2014.