Fossil, Inc. Earnings Cheat Sheet: Margins Suffer as Costs Rise, Profit Falls

Rising costs hurt Fossil, Inc. (NASDAQ:FOSL) in the second quarter as profit dropped from a year earlier. Fossil, Inc.is a global design, marketing and distribution company that specializes in consumer fashion accessories.

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Fossil Earnings Cheat Sheet for the Second Quarter

Results: Net income for Fossil, Inc. fell to $51.4 million (80 cents per share) vs. $54.5 million (80 cents per share) a year earlier. This is a decline of 5.7% from the year earlier quarter.

Revenue: Rose 34.9% to $556.7 million from the year earlier quarter.

Actual vs. Wall St. Expectations: FOSL beat the mean analyst estimate of 75 cents per share. It beat the average revenue estimate of $536.1 million.

Quoting Management: “Continuous innovation in our assortments, focused execution of our growth strategies and efficient utilization of our global distribution infrastructure led to another record quarter for Fossil,” stated Mike Kovar, EVP and Chief Financial Officer of Fossil, Inc.

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 34.5%, 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’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 55.5% from the year earlier, while the figure increased 38.1% in the fourth quarter of the last fiscal year, 93.2% in the third quarter of the last fiscal year and more than threefold in the second quarter of the last fiscal year.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 20 cents in the first quarter, by 11 cents in the fourth quarter of the last fiscal year, and by 26 cents in the third quarter of the last fiscal year.

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), Saks (NYSE:SKS), Coach (NYSE:COH), Nordstrom (NYSE:JWN), J.C. Penney (NYSE:JCP), Ralph Lauren (NYSE:RL), The Wet Seal, Inc. (NASDAQ:WTSLA), Zumiez Inc. (NASDAQ:ZUMZ).

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(Source: Xignite Financials)

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