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What: Shares of fashion accessories maker Fossil (Nasdaq: FOSL ) sank 11% today after its quarterly results and guidance missed Wall Street expectations.
So what: Fossil's third-quarter profit actually thumped estimates, but a wide miss on the top line -- $684.2 million versus the consensus of $713.1 million -- coupled with downbeat guidance for the current quarter reinforces concerns over slowing growth going forward. While Fossil experienced solid double-digit growth in Asia, the weak economy in Europe and a stronger U.S. dollar continue to offset those gains.
Now what: Management now sees fourth-quarter EPS of $2.26 to $2.29 on revenue of roughly $930.5 million, versus Wall Street's estimate of $2.28 and $959.4 million, respectively. "[W]e made excellent progress toward our long-term expansion goals in support of a much larger business in Asia and capitalizing on the power of our multi-brand watch portfolio," CFO Mike Kovar reassured investors. With the stock now off about 40% from its 52-week highs and trading at a forward P/E of 13, buying into that turnaround talk seems like a rather inexpensive move.
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