Fossil Inc. Earnings Cheat Sheet: Double-Digit Revenue Growth Continues

Fossil, Inc. (NASDAQ:FOSL) reported net income above Wall Street’s expectations for the third quarter. Fossil is a global design, marketing and distribution company that specializes in consumer fashion accessories.

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

Fossil Earnings Cheat Sheet for the Third Quarter

Results: Net income for Fossil, Inc. rose to $69.6 million ($1.09 per share) vs. $68.2 million ($1 per share) in the same quarter a year earlier. This marks a rise of 2.1% from the year earlier quarter.

Revenue: Rose 22.7% to $642.9 million from the year earlier quarter.

Actual vs. Wall St. Expectations: FOSL beat the mean analyst estimate of $1.03 per share. Analysts were expecting revenue of $640.6 million.

Quoting Management: “We are pleased to report record Third Quarter net sales and earnings continuing our strong momentum from the first half of the year,” stated Mike Kovar, Executive Vice President and Chief Financial Officer, Fossil, Inc. “Against a backdrop of strong sales growth last year, we generated broad-based, double-digit sales growth across our major product categories, brands and geographies. This quarter also marked our eighth consecutive quarter of global double-digit same store sales increases demonstrating the ongoing strength and resilience of our Fossil brand worldwide. Most importantly, we were able to continue to invest in our infrastructure to support future growth and still deliver an 18.5% operating margin.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 32.9%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 37.4% from the year earlier quarter.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 5 cents in the second quarter, by 20 cents in the first quarter, and by 11 cents in the fourth quarter of the last fiscal year.

Gross margin shrank 1.1 percentage points to 55.9%. The contraction appeared to be driven by increased costs, which rose 25.9% from the year earlier quarter while revenue rose 22.7%.

The increase in profit last quarter comes after net income fell in the previous quarter. In the second quarter, net income declined 5.7% to $51.4 million.

Looking Forward: Expectations for the company’s next quarter results are lower than they have been. Over the past sixty days, the average estimate for fourth quarter has fallen from $1.79 per share to $1.76. At $4.44 per share, the average estimate for the fiscal year has fallen from $4.63 ninety days ago.

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).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)