Nov 6, 2012
Fossil quarterly sales miss Street as Europe pinches
Nov 6, 2012
Fossil Inc cut its current-quarter sales forecast after reporting weaker-than-expected third-quarter revenue, hurt by a drop in European wholesale revenue and a stronger dollar.
Fossil shares fell more than 9 percent in premarket trade.
The fashion accessories maker said it now expects fourth-quarter sales to increase by about 12 percent, not 16 percent as it had forecast earlier.
Net income attributable to Fossil rose to $76.8 million, or $1.26 per share, in the third quarter from $69.6 million, or $1.09 per share, a year earlier.
On an adjusted basis, the company earned $1.28 per share.
Fossil, which sells its namesake brand as well as Michael Kors, Armani Exchange and Marc by Marc Jacobs, said revenue rose 6.4 percent to $684.2 million.
Analysts on average had expected earnings of $1.16 per share on revenue of $713.1 million, according to Thomson Reuters I/B/E/S.
The Europe business, which accounted for about 35 percent of wholesale sales in fiscal 2011, brought in $163.5 million in the quarter, or about 32 percent of total wholesale revenue.
The weak economy in Europe and reduced shipments of leather products to the region hurt sales, the company said.
Fossil bought privately held Danish watch maker Skagen Designs earlier this year to expand in Europe..
The brand contributed $9.8 million to sales in the quarter. Excluding Skagen, European wholesale sales fell 5 percent.
A stronger U.S. dollar reduced sales by about $22.2 million, the company said.
The stock closed at $94.10 on Monday on the Nasdaq.
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