$1.50 in '05 is 20% growth over '04. Not bad for a high quality company that trades at a market multiple.
You are also wrong about inventories and need to spend a little more time understanding FOSL's business before you make such statements. They don't have to slash prices on their inventory to move product. They can ship watches to regions/countries where sell through is strong because it only costs $0.30/per watch to do so. They also have outlet stores that are profitable they can move product through.
20x the $1.50 for '05 gives me a $30 stock. That could be conservative as the stock got as high as 25x last year.