Fossil (FOSL) Earnings Could Spark a Relief Rally but Longer Term Structural Concerns Persist - Piper Jaffray
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Rating Summary:
3 Buy, 11 Hold, 10 Sell
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Fossil (NASDAQ: FOSL) is slated to report Q3 earnings on November 12th, and Piper Jaffray analyst, Erinn Murphy, has structural concerns regarding the watch industry. However, with the 24% short interest on FOSL and expectations for an inline Q3, she is recommending short money de-risk into the print.
Last week, KORS reported its September quarter with mixed results. While jewelry, eyewear & fragrances were all positive, growing categories within licensing, watches remained under pressure and the overall licensing segment posted an 8% decline in revenues--led by an 11% decline in NA and a 2% decline in Europe.
The weakness in watches started in the Dec quarter last year but KORS has seen no signs of stabilization yet and noted it could take several quarters still before the category stabilizes.
The analyst still sees risk to Street estimates for FY16, but does not expect management to provide its FY16 outlook until the Q4 call. No change to Underweight rating or $46 price target.
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 $53.70 yesterday.
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