Fossil (FOSL) Reports Q1 Growth But Reduced Outlook on European Weakness Weighs
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Price: $5.61 +0.54%
Financial Fact:
Diluted weighted average common shares outstanding: 48.29M
Today's EPS Names:
BTTX, VAXX, ELYS, More
Financial Fact:
Diluted weighted average common shares outstanding: 48.29M
Today's EPS Names:
BTTX, VAXX, ELYS, More
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Investors in Fossil (Nasdaq: FOSL) are hitting the exits en masse Tuesday morning following a concerning first-quarter report and FY12 guidance which was lowered. The company cited weakness in Europe. The stock last traded just over $97, down more than 20 percent from Monday's close.
Net sales rose 9.8 percent from $537 million in the first quarter of 2011 to $589.5 million. Analysts were expecting sales of $617.64 million. The company cited watch and leather product sales increases. Global watch sales made the most significant contribution, increasing 13.7 percent, or $50.9 million, while Fossil's Leathers business generated sales increases of 15.8 percent, or $14.3 million. Eyewear sales fell 25.6 percent while Jewelry sales were down 4.8 percent.
Sales to North America were up 9.3 percent, sales to Europe were up 4.7 percent, and sales to Asia-Pacific were up 18.8 percent.
Operating income was down 10.5 percent to $82.9 million, while net income was up 4.2 percent to $58.1 million. Earnings per share totaled 93 cents, better than the 92 cents expected by analysts on the Street.
Fossil's Exec VP, CFO and Treasurer, Mike Kovar, said, "While our First Quarter earnings were on target with our guidance, net sales came in slightly below our expectations. We experienced a sequential quarter improvement in sales growth from our Asia Pacific wholesale business, continued strength across our North American watch business and strong same store sales comps across our global retail base, especially when considering the strong double-digit comp performance in the prior fiscal year first quarter. However, in Europe, a softening macro environment toward the end of the First Quarter and changes in our merchandising and assortment strategies across certain categories negatively impacted both our wholesale and retail sales in that region. While we are cautious about the European economy and its impact on our financial results, we remain confident that continued strength in watch sales, same store sales and square footage growth in our retail business, the continued rollout of concessions in Asia Pacific and the integration of Skagen Designs, Ltd., the purchase of which was effective April 2nd, will result in double-digit sales and earnings growth for fiscal 2012."
Fossil said it is expecting second-quarter earnings of 77-79 cents, which compares to the Street estimate of 94 cents.
FY12 earnings will likely be in the range of $5.30-$5.40, down from the company's prior guidance of $5.40-$5.50. Analysts are currently anticipating EPS of $5.56.
Net sales rose 9.8 percent from $537 million in the first quarter of 2011 to $589.5 million. Analysts were expecting sales of $617.64 million. The company cited watch and leather product sales increases. Global watch sales made the most significant contribution, increasing 13.7 percent, or $50.9 million, while Fossil's Leathers business generated sales increases of 15.8 percent, or $14.3 million. Eyewear sales fell 25.6 percent while Jewelry sales were down 4.8 percent.
Sales to North America were up 9.3 percent, sales to Europe were up 4.7 percent, and sales to Asia-Pacific were up 18.8 percent.
Operating income was down 10.5 percent to $82.9 million, while net income was up 4.2 percent to $58.1 million. Earnings per share totaled 93 cents, better than the 92 cents expected by analysts on the Street.
Fossil's Exec VP, CFO and Treasurer, Mike Kovar, said, "While our First Quarter earnings were on target with our guidance, net sales came in slightly below our expectations. We experienced a sequential quarter improvement in sales growth from our Asia Pacific wholesale business, continued strength across our North American watch business and strong same store sales comps across our global retail base, especially when considering the strong double-digit comp performance in the prior fiscal year first quarter. However, in Europe, a softening macro environment toward the end of the First Quarter and changes in our merchandising and assortment strategies across certain categories negatively impacted both our wholesale and retail sales in that region. While we are cautious about the European economy and its impact on our financial results, we remain confident that continued strength in watch sales, same store sales and square footage growth in our retail business, the continued rollout of concessions in Asia Pacific and the integration of Skagen Designs, Ltd., the purchase of which was effective April 2nd, will result in double-digit sales and earnings growth for fiscal 2012."
Fossil said it is expecting second-quarter earnings of 77-79 cents, which compares to the Street estimate of 94 cents.
FY12 earnings will likely be in the range of $5.30-$5.40, down from the company's prior guidance of $5.40-$5.50. Analysts are currently anticipating EPS of $5.56.
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