Why Fossil Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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.

Interested in more info on Fossil? Add it to your watchlist.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2098092, ~/Articles/ArticleHandler.aspx, 10/22/2014 9:02:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement