Wall Street got wound up about Movado (MOV) after the maker of luxury watches warned that third-quarter results would sharply miss expectations because of slow growth in the industry and brand weakness overseas.
For the third quarter, Movado expects sales of $188.6 million, below the $189.7 million in the year-earlier period and the $218 million expected by analysts polled by Thomson Reuters. Movado also expects per-share earnings of 86 cents to 87 cents, below the Thomson Reuters estimate of $1.13.
As for full-year forecasts, Movado now expects to earn between $1.80 and $1.85 a share on revenue of $585 million to $590 million, vs its previous outlook of $2.44 a share on revenue of $640 million.
Movado is slated to post third-quarter results on Nov. 25.
Heading into the closing bell, the stock dropped 28.7% to $27.43 after earlier falling as much as 35% to $25.12, its lowest point in more than two years. At its lowest Friday, the stock was down 47% from its 12-month high.
As the WSJ reports:
Watchmakers have been pressured by a lackluster economy in Europe and slowing sales in Asia, which had been a source of strength. In particular, sales in Hong Kong—the world's biggest watch market—have weakened because of pro-democracy protests that shut much of the city.
Adding to the industry's headaches is the looming smartwatch from Apple Inc. which is expected to compete for consumer attention.
"The overall watch category is experiencing slower growth and retailers are focusing on driving improved productivity. Moreover, certain of our brands did not perform as well as planned, including Movado in international markets," Chief Executive Efraim Grinberg said.
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