We knew the luxury watch market was in bad shape; practically each and every watchmaking company has suffered financially in one way or another, but here comes some more bad news.
Movado, hoping that its third-quarter shares would meet its forecasts and provide good headway for the upcoming year, was way off target. Wall Street has reported that shares in Movado plummeted nearly 18% to $8.90 after closing at $10.85 a few days earlier.
How quickly things change. A year ago, during this same time, Movado reported a profit of $15.7 million, or 62 cents a share. These recent third quarter results made it so that Movado had to report a net loss of $20.9 million, or 85 cents a share. “Excluding one-time items, Movado said it earned 12 cents a share, significantly worse than analysts’ estimates for 65 cents.”
In addition to making Movado watches, the company, which also makes Concord and Tommy Hilfiger watches, said its sales dropped 20% to $129 million. This is bad news considering that stock analysts had forecasted revenue of $141.2 million.
In response to these numbers, Efraim Grinberg, Movado’s CEO, has said “we are very disappointed in our third quarter and year-to-date results. We experienced higher levels of de-stocking in the marketplace than originally anticipated as retailers continued to focus on very tight inventory control.”
One of the things that have negatively affected Movado, as well as other luxury watch brands, are the high levels of watch and jewelry retail store closures and the subsequent inventory liquidation.
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