What: Shares of Fossil Group (NASDAQ:FOSL) were down 33.9% as of 12:30 p.m. Friday after the watch and apparel specialist released mixed third-quarter results.

So what: Quarterly revenue fell 14% year over year (8% on a constant-currency basis) to $771.3 million, primarily growth in its core Fossil and Skagen brands was more than offset by declines in Fossil's multi-brand licensed watch portfolio and the negative impact of foreign exchange. Specifically, revenue from watches declined 17% year over year (down 11% at constant currency), leathers fell 3% (but up 3% at constant currency), and jewelry dropped 5% (but rose 3% at constant currency).

Top-line declines were also broad based on a geographic basis, with revenue from the Americas down 11% (down 8% at constant currency), Europe down 15% (down 3% at constant currency), and Asia down 19% (down 10% at constant currency).

On the bottom line, that translated to a 44.6% decline in net income to $57.5 million, or $1.19 per share, the latter of which was bolstered in part by Fossil's decision to repurchase 0.2 million shares for $12.4 million during the quarter.

Analysts, on average, were expecting lower earnings of $1.13 per share, but higher revenue of $794.4 million.

Fossil also announced it has agreed to acquire wearable technology specialist Misfit for a purchase price of $260 million. The transaction will be funded through a combination of cash on and bank debt, and is expected to close in before the end of fiscal 2015.

Fossil CEO Kosta Kartsotis added, "We remain confident in our long-term strategies. We believe the substantial capabilities we acquire with Misfit and the many opportunities it creates, combined with our diversified business model, solid financial position and cash flow generation, set us up to win over the long-term and drive value for our shareholders."

Now what: In the meantime, however, investors are less than pleased with Fossil's guidance for the remainder of the year. Based on generally accepted accounting principles, Fossil now anticipates fourth-quarter revenue will decline in the range of 16% to 7%, and translate to diluted earnings per share of $1.05 to $1.65. On an adjusted basis -- which means excluding the significant impact of currencies, restructuring charges, an extra week last fiscal year, and acquisition expenses -- Fossil expects fourth-quarter revenue will fall in the range of 11% to 2%, and result in earnings per diluted share of $1.40 to $2.00. 

But Wall Street was more optimistic either way, with consensus estimates calling for a narrower 4.4% decline in revenue, and significantly higher adjusted earnings of $2.12 per share.

In the end, while I applaud Fossil's effort to further embrace connected technology, its weak guidance demonstrates the company's challenges likely won't abate in the near future. For now, that's why I personally prefer watching Fossil's story unfold from the sidelines as the dust settles.

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Fossil. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.