Aug. 28 (Bloomberg) -- Movado Group Inc. surged the most in more than a year and a half after raising its forecast for profit this fiscal year as sales of its branded watches gained.
The shares climbed 17 percent to $35.36 at the close in New York, for the biggest gain since December 2010. Paramus, New Jersey-based Movado has advanced 95 percent this year.
Movado is benefiting from increased demand for its namesake branded watches as well as its licensed watch brands, said Mike Richardson, an analyst with Sidoti & Co. in New York. Fossil Inc., owner of Skagen watches, surged earlier this month after it forecast profit that exceeded analysts’ estimates.
“Movado Bold, Sport Chronograph and Series 800 have been particularly strong,” Richardson, who recommends buying the shares, wrote in an e-mail. “On the licensed side Coach Boyfriend, Classic Signature, Hugo Boss Aviator, Tommy Hilfiger Windsurf and Lacoste Advantage and GOA collections have been strong.”
After the shares’ jump today, Movado’s valuation remained attractive given its growth prospects, solid balance sheet and controlled costs, Richardson wrote in a note to clients.
Profit this fiscal year will be about $1.40 a share, up from a previous forecast of $1.15, the company said today in a statement. The average of three analysts’ estimates compiled by Bloomberg was $1.24.
Second-quarter sales 4.2 percent to $118 million, the company said. Movado’s gross margin, the portion of sales left after the cost of goods sold, widened to 55.7 percent from 53.8 percent a year earlier.
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