Fossil Inc. Earnings: Fifth Consecutive Quarter of Double-Digit Revenue Growth

The Cheat Sheet

Fossil Inc. reported net income above Wall Street’s expectations for the fourth quarter. Fossil is a global design, marketing and distribution company that specializes in consumer fashion accessories.

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Fossil Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Fossil Inc. rose to $117.9 million ($1.87 per share) vs. $96.7 million ($1.46 per share) in the same quarter a year earlier. This marks a rise of 22% from the year earlier quarter.

Revenue: Rose 18.5% to $830.8 million from the year earlier quarter.

Actual vs. Wall St. Expectations: Fossil Inc. beat the mean analyst estimate of $1.77 per share. Analysts were expecting revenue of $841.4 million.

Quoting Management: “We are pleased to cap off another outstanding year for Fossil by continuing with strong, double-digit sales growth across our operating segments,” stated Mike Kovar, Executive Vice President and Chief Financial Officer of Fossil, Inc. “The Fourth Quarter double-digit sales increases were broad-based across major brands, product categories and geographies, driven by the ongoing success of our two core global growth strategies, our FOSSIL accessories lifestyle business and our multi-brand watch business.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 29.1%, with the biggest boost coming in the first quarter when revenue rose 36.6% from the year earlier quarter.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the third quarter, by 5 cents in the second quarter, and by 20 cents in the first quarter.

Gross margin shrank one percentage point to 56.1%. The contraction appeared to be driven by increased costs, which rose 21.2% from the year earlier quarter while revenue rose 18.5%.

The company has now seen net income rise in two straight quarters. In the third quarter, net income rose 2.1% from the year earlier.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from $1.02 per share to 97 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At $4.52 per share, the average estimate for the fiscal year has fallen from $4.53 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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