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Fossil Group, Inc. Message Board

  • brettmx_98 brettmx_98 Sep 20, 2000 1:33 AM Flag

    Just a few thoughts about Fossil

    This will be a great buying opportunity in a few
    weeks after the stock get hammered a little more and
    languishes for a couple of months. Don't count out the
    possibility that the Euro will strengthen against the dollar
    eventually.

    But I must say that it is #$%$ poor management not to
    hedge against currency fluctuations. That's a little
    concerning. I have a feeling a few people on the management
    team won't be around in the near future.

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    • As I said previously, I'm not an expert on
      currency exchange issues. Can somebody give a brief
      overview of how currency hedges work? Is it really
      reasonable to hedge against such a strong downward move as
      the Euro has shown recently? If so, what is the cost
      of that hedge? I presume it's like insurance, in
      that you are sacrificing cash flow in order to avoid
      large losses. There's always a cost/benefit analysis
      that goes into insurance decisions. Sometimes your
      estimates of risk are off, due to odd circumstances, and
      you become exposed. Is that what happened here, or
      did FOSL (and a bunch of other really large
      companies) simply screw up in hedging? PLease don't just
      say, "Yep, those Texas bastards sure are stupid, blah,
      blah, blah." Provide some insight, not just
      troll-speak.

      • 3 Replies to theseus35
      • Question for you.....in my research.....
        as I
        am relatively new at the computer....
        I want to
        know any ...links(prefer free)
        .....that
        will
        get me any of the following........

        10 or more
        years of e's and r's data.....
        annual is
        fine........adjusted for splits...

        Hi low PE for the
        year......
        price as a percent of book...hi...lo....

        IN the
        old days I used to grab this stuff
        off the s&p
        sheets....(had 12 years)
        NOW....I don't have access......to
        these...
        (free).......any ideas........
        thanks, bdparts

      • You can hedge all or part of your currency
        exposure on the futures market. In this case, if the Euro
        goes UP the company fails to gain, but this is better
        than the current situation.

        You can also hedge
        using options, which would be like paying an insurance
        premium.

        Companies doing business internationally routinely hedge
        their currency exposures.

      • Theseus35,

        Hedging should have been an
        objective at FOSL, and perhaps it was. Sometimes it's
        difficult to run the gauntlet without bumping against the
        side walls. Focusing too much on currency related
        issues might just have produced an adverse earnings
        effect. I imagine it would be like flying an F-18 thru a
        valley. There are bridges, cable trams and constricting
        areas to traverse thru inorder to get the desired
        outcome.

        I don't think we're exposed. I'm sure there have
        been expansion costs what with the new stores in Great
        Britian, the new stores going up in Holland, and the new
        clothing stores in the US.

        Currency exchange rates
        are obviously a factor to deal with but it appears
        that the real focus has been in the area of customer
        acceptance and customer loyalty overseas. German sales have
        been strong for FOSSIL, and I think Europe is a very
        important market for us. Quite often Europe sets the
        fashion trend which America follows. Perhaps we are
        growing too fast in Europe though. Perhaps faster than
        anticipated.

        Here in my town, FOSSIL watches sell like hot cakes. I
        too have talked to many sales clerks at various watch
        counters throughout my city. All have the same consensus,
        that FOSSIL is their biggest seller. Sometimes growth
        has an accordian effect. After the necessary lulls,
        the forward momentum can be tremendous.

        Re:
        The DORITO-TROLL, well she's on IGNORE as of right
        now. Thanks for your intellectual posts.

        5x

 
FOSL
81.76+0.66(+0.81%)Mar 27 4:00 PMEDT