Fossil, Inc. Earnings: Beats Estimates
Fossil, Inc. (NASDAQ:FOSL) reported net income above Wall Street’s expectations for the first quarter. Fossil, Inc.is a global design, marketing and distribution company that specializes in consumer fashion accessories.
Fossil Earnings Cheat Sheet for the First Quarter
Results: Net income for Fossil, Inc. rose to $55.8 million (86 cents/share) vs. $35.9 million (53 cents/share) in the same quarter a year earlier. A rise of 55.5% from the year earlier quarter.
Revenue: Rose 36.6% to $537 million YoY.
Actual vs. Wall St. Expectations: FOSL beat the mean analyst estimate of 66 cents/share. Estimates ranged from 64 cents per share to 70 cents per share.
Quoting Management: “We began fiscal 2011 strongly, delivering another record sales and earnings performance,” stated Mike Kovar, Executive Vice President and Chief Financial Officer of Fossil, Inc. “For the First Quarter, sales growth of 36.6% was accompanied by a 62.3% increase in diluted earnings per share reflecting broad based strength across geographies, categories and channels. Our performance continues to demonstrate the strength of our business model, the success of our core growth strategies and the excitement of our brands around the world. During the quarter, we saw particularly robust growth in Asia where sales rose 57% while North America and Europe sales each grew by 34%. Our FOSSILR brand continued to gain momentum globally increasing sales by 19% in the quarter with an equally strong performance in watch and non-watch categories alike. We are very pleased with our positioning as we start the second quarter and believe fiscal 2011 will represent another significant year of growth and increased value for our stakeholders.”
The company has enjoyed double-digit year-over-year revenue growth for the past five quarters. Over that span, the company has averaged growth of 31.8%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 37.4% from the year earlier quarter.
Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.4 percentage point to 56.2% from the year earlier quarter. Over that span, margins have grown on average 2.6 percentage points per quarter on a year-over-year basis.
The company has now seen net income rise in three-straight quarters. In the fourth quarter of the last fiscal year, net income rose 38.1% and in the third quarter of the last fiscal year, the figure rose 93.2%.
Competitors to Watch: Movado Group, Inc (NYSE:MOV), Abercrombie & Fitch Co. (NYSE:ANF), American Eagle Outfitters (NYSE:AEO), Urban Outfitters, Inc. (NASDAQ:URBN), Aeropostale, Inc.(NYSE:ARO), The Gap Inc. (NYSE:GPS), The Wet Seal, Inc. (NASDAQ:WTSLA), Zumiez Inc. (NASDAQ:ZUMZ).
Stock Performance: Shares of FOSL are up over 7% from the previous close of $94.