Movado Group, Ethan Allen Interiors and Netflix highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – January 19, 2017 – Zacks Equity Research highlights Movado Group, Inc. (NYSE: MOV – Free Report ) as the Bull of the Day and Ethan Allen Interiors, Inc. ( NYSE:ETH – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix (NASDAQ: NFLX – Free Report ).

Here is a synopsis of all three stocks:

Bull of the Day :

Movado Group, Inc. (NYSE:MOV – Free Report ) has struggled to find itself as watches went out of favor and wearables came in. But is this Zacks Rank #1 (Strong Buy) finally finding its groove?

Movado Group makes watches in its Switzerland manufacturing facilities under the brands Movado, Ebel, Concord, ESQ Movado, Coach, Tommy Hilfiger, Hugo Boss, Juicy Couture, Lacoste and Ferrari. It also operates about 38 Movado retail stores globally.

Big Third Quarter Beat

On Nov 22, 2016, Movado reported its fiscal third quarter results and surprised by 20 cents on the Zacks Consensus Estimate. Earnings were $0.91 versus the consensus of $0.71.

Net sales still fell, but only by 3.1% to $179.8 million from $185.6 million in the year ago period. Net sales on a constant dollar basis only fell 1.4%.

Gross profit, however, rose by 90 basis points to 54.8% of sales compared to 53.9% in the third quarter of fiscal 2016. The increase was primarily due to the result of the favorable impact of channel and product mix and some sourcing improvements.

Is the Worst Over?

Movado has been in the unfortunate position of not just being a watchmaker as watches are becoming less popular, but also a luxury watchmaker.

But in November, it maintained its outlook for fiscal 2017 with earnings expected to be between $1.40 and $1.55 per share.

The Zacks Consensus Estimate has actually risen in the last 30 days to $1.55 from $1.51, which is the high end of the company's range. That indicates the analyst is more bullish on the holiday quarter.

While that is a still a 25% earnings decline from fiscal 2016, the analyst is more bullish about fiscal 2018. Earnings are expected to be $1.69 which is a 9% increase over fiscal 2017.

Bear of the Day :

Ethan Allen Interiors, Inc. (NYSE:ETH – Free Report ) isn't feeling the optimism in 2017. This Zacks Rank #5 (Strong Sell) recently warned on its fiscal second quarter results.

Ethan Allen operates 300 Design Centers in the United States and abroad that sell home furnishings. It also operates 9 manufacturing facilities including 6 manufacturing plans and 1 sawmill in the United States and one plant each in Mexico and Honduras.

About 70% of its products are made in its North American plants.

A Challenging Retail Environment

On Jan 11, Ethan Allen commented on its results for the fiscal second quarter.

It described the second quarter retail environment, which ended Dec 31, as "challenging".

Written retail orders fell 3.6% compared to a record increase of 15.3% in the year ago quarter. Delivered sales fell 6.2% as well.

As a result, its adjusted operating income is projected to be about 8.8% of sales compared to 12.2% of sales in the prior year's quarter.

Earnings per share are also expected in the range of $0.38 to $0.39.

That was well under the Zacks Consensus Estimate of $0.59. It made $0.55 in the year ago quarter.

Estimates Cut for the Quarter, Fiscal 2017 and Fiscal 2018

As a result, the analysts cut estimates across the board.

Given the new guidance, the second quarter estimates were cut to $0.38, which is the low end of the company's new guidance.

Full year fiscal 2017 was also dut to $1.92 from $2.05. That means flat earnings growth compared with last year.

But even fiscal 2018 estimates were cut. The Zacks Consensus Estimate is now $2.20, down from $2.33 just 7 days ago.

Additional content:

Netflix Soars to All-Time Highs on Q4 Earnings

Streaming content giant Netflix (NASDAQ: NFLX – Free Report ) has put out an earnings beat after the closing bell Wednesday, topping estimates on both earnings and sales. A bottom-line of 15 cents per share beat the Zacks consensus by 2 cents while revenues slightly passed expectations to $2.48 billion.

Yet in every important metric, Netflix simply knocked the cover off the ball: total membership has now reached 93.8 million (the company had guided to 91.94 million), domestic net additions in Q4 hit 1.93 million (1.45 million guided) and total net income went to $154 million (guidance had $125 million). Domestic strength in particular may come as a surprise to most analysts, who saw this group as the most saturated of Netflix's market, as well as price increases expected to have staunched growth.

Further, Netflix's Q1 guidance is now for the company to earn 37 cents per share, more than double the 18 cents in the current Zacks consensus estimate. Much of the company's strength is stemming from global streaming revenue growth, which was up 35% year over year in Q4.

Netflix almost never misses earnings estimates: its only miss in the last 5 years was in Q3 of 2015. Netflix stock took a hit and stayed range-bound for most of last year, only briefly glimpsing a new all-time high earlier this week before zooming off into the stratosphere after the bell today. Now trading at $144.40, shares have bid up nearly 8.4% after-hours, following a late swing to positive territory as the closing bell approached.

Valuation may be a problem at these levels, however. The stock had already been trading at 145x 2017 earnings, and now that's being left in the dust. International buildouts -- especially in places like Brazil, now Netflix's largest market outside the English-speaking world -- are clearly having their desired effect. And if the company's guidance is indication, expect to see Netflix off to the races for the foreseeable future.

Before the earnings report, Netflix had a Zacks Rank #3 (Hold), but was straight up flunking the Zacks Style Score, with Value, Growth and Momentum reads of F across the board. Expect analyst revisions in the coming days to augment these figures, perhaps somewhat drastically.

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Movado Group Inc. (MOV): Free Stock Analysis Report
 
Ethan Allen Interiors Inc. (ETH): Free Stock Analysis Report
 
Netflix Inc. (NFLX): Free Stock Analysis Report
 
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