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Fossil Group, Inc. (FOSL)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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12.16+0.81 (+7.14%)
At close: 4:00PM EDT

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  • L
    Lucas
    ⭐ Top Bullish Charts | May 2021 💰💵📈

    https://stockreport.tips/Bullish-Charts
    Bullish
  • A
    Anonymous
    Watch sales down half a billion from 2019. Anybody really surprised?
    Company can blame Covid but not really. Fosl's downward trend in watch sales started long before with proliferation of smart phones and then the smartwatch. Company says they are moving towards the digital watch sector...opps about five years too late. Apple, Fitbit/Google, and Samsung must be shaking in their boots now that fosl finally realized this.
    Company puts out that it has 320 mil cash and equivalent and 230 mil of debt. Hmm....what about the 520mil in accts pay and accrued expenses against accts rec of 230mil.
    Sure you can build up cash if you don't pay your bills.
  • R
    Rob
    CITIZEN WATCH will soon make a bid for Fossil. They already own Bulova in the US and share technology with Fossil. Consolidation is inevitable and Citizen and Fossil will make a powerful combination in the mid-price segment.
  • R
    Rob
    A take over by or merger with CITIZEN is the best option with Fossil. The company has been struggling now for a good four years, slashing costs but also unable to find a footing in smartwatches and with indecisive a confused management decisions. Consolidation is inevitable in this sector where much has changed and CITIZEN is by far the best fit: 1) the brand portfolio is complementary in the mid price segment (Citizen, Bulova, Fossil, Michael Kors, Armani, Skagen and the other licenses); 2) both companies are vertically integrated producing their own movements in Japan/China; 3) Fossil foray in smartwatches / hybrid albeit mixed , has given them expertise and access to technology that also CITIZEN can and wants to leverage; 4) Fossil has a management succession problem, with Kosta soon to retire and none of the other managers having emerged has a strong enough leader (Greg anyone?); 5) Both companies have healthy balance sheets now (net cash) and Fossil woes appear to have stabilized; 6) the cultural fit may prove challenging but Citizen has strong US identity and footprint with Bulova and the two companies have already collaborated for years and know each other well.
  • R
    Rob
    CITIZEN has over 1Bn market cap and they are net cash - a combination with Fossil will make ton of sense in a sector that needs to consolidate to face off Apple watch etc. Citizen brand and Bulova are number 1 & 2 in the US market mid price segment: adding Fossil and Michael Kors which are also very large would make tons of sense. Moreover, since 2018 Fossil has been licensing to Citizen its hybrid smartwatch technology and the ties between the two companies are already strong with Fossil also using extensively Citizen made movements for the majority of its watches.
  • R
    Rob
    CITIZEN bid is coming at least at 24$ in my understanding - which assuming synergies is already a bargain. Assuming Fossil does 1.8bn in revenue and assuming a very conservative 1x sales valuation, the implied share price would come at 36$. This shows that 24$ is a still although management would probably recommend it given the challenge to right the ship as a standalone entity.
  • R
    Rob
    CITIZEN WATCH is the most logical buyer for Fossil - the other Japanese players Seiko and Casio operate in different segments and have been moving to the high end ( Grand Seiko) and don't have a large movement business. In the US Movado and Timex have similar strategy to Fossil but are too small for a take over. A combination between CITIZEN and Fossil would be powerful and scale and volume driven. Importantly there would be no conflict for Fossil large portfolio of licenses (Kors, Armani etc) which would complement nicely CITIZEN existing brands (note C also has license for Harley Davidson watches).
  • c
    chris
    Disappointing #s again. Broken record here.
  • A
    Anonymous
    Time to short again.
  • m
    mars
    Cannot believe I didn't buy at 3!
    Neutral
  • A
    Anonymous
    Three insider sales last week.
    Two executive vps and one director sales all in the $14 range.
    So you want to go long on this thing?
    Also read a seeking alpha article that they bought back their shares some time ago when it was trading at or near all time high and spent 1.5billon of cash!@@?!! What in the world?!@?
  • A
    Anonymous
    This board is dead just like this comany. The volume is very low... Thinking about going long now. Market makers may spike this up in the near future just get the volume up and suck in bag holders and then slow downward trajectory again.
  • R
    Rob
    SIGNET could bid for Fossil as much as Citizen - possibly a better fit in the US but not as much outside in the US
  • E
    Exodus
    Steel Tarrifs import tarrifs on finish goods?
  • R
    Rob
    Stock is down on announcement that Giorgio Armani has signed new deal with Parmigiani Flaurier for a line of high end watches - Armani is about 15pc of Fossil sales so the correction would seem appropriate EXCEPT that Fossil and Armani have a license deal through 2023 for Armani Exchange and Emporio Armani (i.e. diffusion lines) and Parmigiani is extremely high end and low volume so will have no impact of Fossil - Armani relationship
  • n
    nittanyroar2013
    "The Company is currently engaged in discussions with its lenders regarding amending certain covenants under the Term Credit Agreement."

    Not what you want to hear.
  • A
    A
    Call options has very unusual high volume for $8 and $9. May be something is happening. Merger/Buyout deal in progress ?
  • B
    Booda
    A few months back some people were saying GME is doomed and a couple of years till BK, now see GME performance. To me FOSL has a brand recognition so the chances of turn around is very high by introducing new product lines or partnering. All short thesis is who wears watches and those wearing it wear smart watches and Fosil can't compete with Apple etc. But, smart watches is not their main revenue generating product and they should scrap it and stick with traditional/ fashion watches and other products and introduce new stuff. So reducing cost to manage debt and getting rid off losing segments with addition of new stuff matching with their strength could turn around the company fast.
  • c
    chris
    Had a chance to go through the conference call. In my opinion:

    The Good
    1. $250M positive cashflow in 2018; at $13, it's trading under 3 x ttm cashflow;
    2. Accelerated and paid off $125M in debt in January v. refinancing it;
    3. Doing that drops interest xp to $35M/year;
    4. Given cashflow, reached $0 net debt;
    5. Already addressed the supplier issue by diversifying away from the sole source problem;
    6. Inventory is relatively lean and fresh.

    The Bad
    1. Had a supplier problem with a sole source of subassemblies that caused supply constraints;
    2. Caused a delay that won't fully work itself out until Q2;
    3. The liquidation of excess inventory of older gens boosted sales in Q4 17, Q1 18, and 2Q 18 so comps are harder this year without the excess inventory to liquidate;
    4. Europe macroeconomic environment stinks;
    5. Traditional watch sales continue to decline.

    The Ugly
    1. Smartwatch sales aren't growing rapidly even taking into consideration the supplier issue;
    2. The Q1 guidance includes a $20M gain on sale of IP to Google so it will be real bad from ops.

    The cashflow size and $0 net debt puts a floor on this one in my opinion, but there's really nothing positive to look forward to for more than six months.
  • S
    STOCK TRADER
    Fosil was downgraded to Sell by CFRA. It not looking good for them:

    “Fossil Group wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

    In the last five years Fossil Group saw its revenue shrink by 10% per year. That's definitely a weaker result than most pre-profit companies report. So it's not that strange that the share price dropped 12% per year in that period. We don't think this is a particularly promising picture.”