Piper Jaffray Remains Bearish on Fossil Group (FOSL) Following 2Q Results and Guidance

August 10, 2016 8:37 AM EDT
Get Alerts FOSL Hot Sheet
Price: $32.69 -1.24%

Rating Summary:
    8 Buy, 14 Hold, 6 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 31 | New: 42
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Piper Jaffray reiterated an Underweight rating and $25.00 Price Target on Fossil Group (NASDAQ: FOSL) following the company's 2Q earnings report and conference call. Sales were reported at $685M vs. $673M estimates. EPS was at $0.12 vs. the Street's $0.09. Q3 was issued well-below expectations. Sales are forecasted to be down 6%-2% vs. former -0.7% estimates and EPS of $0.15-$0.40 compares the the Street's $0.68.

Analyst Erinn Murphy commented, "We remain concerned about the trajectory of FOSL's business following the Q2 call. While EPS bested expectations, some costs planned for Q2 were deferred (not quantified) and the Americas, despite a higher promotional cadence in outlets and a higher reliance on off-price, decelerated sequentially from Q1. Watch trends also moderated slightly on a sequential basis. In terms of Q3 guidance, sales are expected to be down 6%-2% and EPS in a range of $0.15-$0.40 (vs. Street of $0.68). We estimate 2H sales are supported by ~$110-$120M in revenue coming from wearables--offset by an on-going decline of traditional watches. We note the first wave of wearables will hit retail stores at the end of August but the vast majority of sell-throughs are planned to occur in December. In terms of our estimates, we are reducing our estimates and remain comfortable with our $25 PT."

For an analyst ratings summary and ratings history on Fossil click here. For more ratings news on Fossil click here.

Shares of Fossil closed at $30.36 yesterday.



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Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change

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Piper Jaffray, Earnings, Erinn Murphy

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