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Why Fossil Shares Shot Higher

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 Fossil (NASDAQ: FOSL  ) were ticking higher today, climbing as much as 10% after a strong earnings report.

So what: The watch-and-accessories maker saw earnings jump 24%, up to $1.21 per share, cruising past estimates of just $0.97 a share. Revenue rose 15.5% to $680.9 million, also well ahead of expectations of just $651.9 million. Third-party sales growth was strong in all regions, jumping at least 13% in North America, Europe, and Asia. Direct sales through the company's own stores and websites, which bring in a higher margin, were up 22.7%. Fossil's outlook for the current quarter, however, was below analyst projections.  

Now what: This was pretty much a perfect quarter, as management noted double-digit growth in watch sales, and a comeback in its retail jewelry business. It's a bit puzzling to see second-quarter guidance lower, but full-year projections remain in line with analyst expectations. Shares may seem a little pricey as brand-intensive industries like this one tend to be capricious, and watch sales have come under pressure with the proliferation of cell phones and could feel more pressure with wearable technology coming out such as the supposed iWatch that Apple's working on. To see what happens next with Fossil, add the company to your Watchlist. All you have to do is click right here.

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9/28/2016 3:01 PM
FOSL $28.33 Down -0.42 -1.46%
Fossil CAPS Rating: ****