MOV - Movado: Brand Weakness Is More Than Temporary
2024-06-19 05:16:30 ET
Summary
- Movado designs and sells watches through various owned and licensed brands.
- The company's brands seem to be performing weakly in the watch market, and the increased marketing spend in FY2025 to refuel growth seems like an unsustainable attempt at growth.
- License expirations also pose some risk as sales are declining, although I believe that the long relationships should still likely be renewed for Movado.
- Despite a strong balance sheet and still overall healthy cash flows, the valuation seems to be too high unless a brand turnaround is achieved.
Movado Group, Inc. ( MOV ) designs, sources and sells watches through the company’s Movado, Concord, Ebel, MVMT, and Olivia Burton brands , and owns some retail stores through which the company sells watches in addition to ecommerce. More of the company’s revenues come from licensed brands, which currently include Calvin Klein, Coach, Hugo Boss, Lacoste, and Tommy Hilfiger....
Movado: Brand Weakness Is More Than Temporary