Why Movado Shares Surged


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Movado Group (NYS: MOV) soared 18% today after the luxury watchmaker's quarterly results and guidance topped Wall Street expectations.

So what: Movado's blowout second-quarter -- EPS of $0.32 versus the consensus of just $0.18 -- and upbeat full-year guidance reinforces optimism over the strength of its brands even in the weak economy. Additionally, the company's gross margin improved to 55.7% from 53.8% on a reduction in costs, giving investors plenty of confidence about profitable growth going forward.

Now what: Management now sees full-year 2013 EPS of $1.40, up nicely from its prior view of $1.15, and expects sales to grow 10% to $510 million. "Our expansion strategies, strong operating infrastructure combined with the disciplined management of expenses and inventory has provided us with a sustained platform to continue our growth during the balance of fiscal 2013 and in the future," said Chairman and CEO Efraim Grinberg. Of course, with the stock surging to a new 52-week high today -- now up a whopping 160% over the past year -- and trading at a 20-plus P/E, much of that optimism might already be baked into the price.

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The article Why Movado Shares Surged originally appeared on Fool.com.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Movado. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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Originally published