Oppenheimer Remains Sidelined on Fossil Group (FOSL) as Bear Case Appears to Play Out
Oppenheimer reiterated a Perform rating on Fossil Group (NASDAQ: FOSL) after lowering estimates as Bear case appears to be playing out. Oppenheimer cut 2016 sales 1.5%-2.5% yielding $1.00 trim to EPS could translate to additional risk to 2H16.
Analyst Anna Andreeva commented, "Bear case on FOSL appears to be playing out: ~50% market share in traditional watches <$1,000 is unraveling (wholesale sell-through saw sharp decel in Americas and now Europe in the last two months of 1Q16, own retail comped negative) while company has yet to win in the wearables push. Annual '16 guide was lowered by 40% ($1.00) just three months after first provided in February, albeit high end of sales guidance still assumes recovery in 2H16 which could be aggressive (40-50% watches/wearables annual sales take place in December). Lowering estimates with wide range of EPS outcomes possible (modeling down earnings in '17); '16 sales haircut of just 1.5%-2.5% yielding $1.00 trim to EPS could translate to additional risk to 2H16."
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Shares of Fossil closed at $28.44 yesterday.