Movado Group, the watch conglomerate known for brands like Ebel and MVMT, experienced a significant drop in sales during the second quarter of the fiscal year. As a result, the company has revised its outlook for the year, expressing concerns about continued weak demand due to consumers scaling back on discretionary purchases.
Stock Price Takes a Hit
The news of the sales decline had an immediate impact on the company’s stock, with shares falling nearly 12% to $23 during premarket trading. This adds to the already substantial decline of more than 19% seen in shares this year up until Wednesday’s close.
Sales and Profit Plunge
Movado Group reported a 12% decrease in sales for the second quarter, indicating a significant decline in consumer demand. Additionally, profits suffered a major blow, dropping to $8 million, or 36 cents a share, compared to $24 million, or $1.05 a share, from the previous year.
Bleak Outlook for the Future
In light of these disappointing results, the company has also revised its outlook for the fiscal year. CEO Efraim Grinberg acknowledged that consumers are holding off on purchasing Movado-made watches and expects this challenging environment to persist throughout the second half of the year.
Movado Group’s poor performance reflects the broader trend of decreased discretionary spending by consumers.