One Feisty Fossil

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The word "fossil" probably brings to mind a bony old relic. However, Fossil (Nasdaq: FOSL), well-known for watches and handbags, has managed to buck negative consumer trends to deliver impressive second-quarter results.

Fossil's second-quarter net income soared 71.3% to $25.1 million, or $0.36 per share. Revenue jumped 15.2% to $353.2 million (granted, excluding currency impact, it was a 9.3% increase). Fossil also managed to boost its gross profit to 53.9% of sales versus 49.1% of sales this time last year.

These are good tidings in these troubled times; after all, many consumer-goods stocks have spooked investors lately. Consider Coach (NYSE: COH), which has been taken to the bargain basement; unlike Fossil, it provides pricey handbags. As much as I think Coach is a good long-term stock, I suspect Fossil is a good play on consumers staying on more conservative budgets, since Fossil provides products in an array of price points, including less luxurious ones.

Fossil hasn't remained unscathed; its stock got roughed up last quarter when it gave second-quarter guidance Wall Street didn't particularly like, guiding for 12% to 14% revenue growth and $0.25 per share in earnings, which, of course, you can see it handily beat. (I have to say I find it interesting, to say the least, that it surpassed its own guidance to such an extent.)

Now, Fossil's upping its guidance, expecting a third-quarter revenue increase in the mid-teens, and earnings up 23% to $0.53 per share. For the full year, it expects earnings to increase by about 30% to a range of $2.27 to $2.30 per share.

Back in May, I took a look at both Fossil and premium denim company True Religion (Nasdaq: TRLG) to see if investors should be digging for deals. I felt more optimistic about Fossil, but interestingly, both have reported impressive recent quarters despite the economic headwinds. (Here's my take on True Religion's recent quarter.)

There are definitely some consumer-goods stocks I just wouldn't touch in the current climate; I've made my concerns known about companies like Crocs (Nasdaq: CROX) and Bare Escentuals (Nasdaq: BARE). However, Fossil strikes me as a company with staying power. Furthermore, even with today's jump, it's trading at just 12 times forward earnings, well below expected growth for that period, so its price seems reasonable. It looks like this Fossil is anything but a bony old relic.

Here's some related Foolishness:

• I recently thought Crocs doesn't rock and was bearish on BARE.
• Coach has gotten put in the bargain basement.
• Is now the time to pull the trigger?