According to the law firm press release, Movado, one of the world’s leading watchmakers, designs, sources, markets and distributes fine watches.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements touting the purportedly attractive business prospects and strong growth expected for the Company’s flagship Movado brand as well as its portfolio of licensed brands, which includes Lacoste and Scuderia Ferrari watches. Defendants also materially misled investors regarding their initiative to boost the Movado brand by cannibalizing one of the Company’s other brand’s shelf space at various retailers. As a result of defendants’ materially false and misleading statements and omissions, Movado common stock traded at artificially inflated prices during the Class Period, reaching a high of $46.39 per share and allowing the Company’s Chairman and CEO to sell over $8.6 million worth of his Movado shares at artificially inflated prices.
Then, on November 14, 2014, Movado issued a press release preliminarily announcing disappointing third quarter financial results and lowering the Company’s financial outlook for its 2015 fiscal year (ending January 31, 2015). Specifically, the Company reported that: (i) it expected third quarter earnings in a range of $0.86 to $0.87 per share, far less than analysts’ estimates of $1.13 per share; (ii) it expected net sales between $188.6 million to $189.7 million for the third quarter, well below the consensus estimate of $218.32 million; (iii) certain brands, including Movado, Lacoste, and Scuderia Ferrari, had not performed as well as expected; and (iv) as a result, the Company would be lowering its fiscal year 2015 guidance. In contrast to the sales growth of 11% and operating income growth of 19% discussed throughout the Class Period, defendants now expected sales growth of only 1% to 2% and a decrease in operating profit of 7% to 10% compared to fiscal 2014. On this news, the price of Movado stock declined, falling from $38.51 per share to $26.25 per share, a decline of nearly 32%.
This case was voluntarily dismissed on June 30, 2015.