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.
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.
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.