Nov 12, 2014
Fossil profit rises 15.6 percent due to strong demand
Nov 12, 2014
Fashion accessories retailer Fossil Group Inc reported better-than-expected sales and profit for the third quarter due to strong demand for its watches and jewelry, sending its shares up 18.5 percent in extended trading.
The company, which sells watches under brands such as Fossil and Skagen, also said it has authorized a $1 billion share repurchase program, which will end in December 2018.
The Texas-based retailer said jewelry sales rose 23 percent in the quarter.
The company has been reaping the benefits of a revamp of its jewelry line to the "affordable luxury" image that it has managed to achieve for its watches and handbags.
Watch sales rose 12.4 percent to $696.3 million in the third quarter ended Oct. 4, contributing more than three-quarters of the total revenue.
Fossil narrowed the forecast range for its 2014 profit.
The company said it now expects to earn $7.00-$7.30 per share in 2014, in line with analysts' expectations of $7.15 per share, according to Thomson Reuters I/B/E/S.
The company had earlier forecast $6.95-$7.35 per share.
The retailer said it expects current-quarter earnings of $2.91-$3.21 per share and sales growth of 3-6 percent.
Net income rose 15.6 percent to $103.7 million, or $1.96 per share, in the third quarter, while revenue rose 10 percent to $894.5 million.
Analysts on average expected the company to earn $1.82 per share on revenue of $878.8 million, according to Thomson Reuters I/B/E/S.
The company's shares closed at $103.75 on the Nasdaq on Tuesday.
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