Fossil Announces First-Quarter Financials
Forecasting 8%-9.5% Growth in Q2
Richardson, TX-based Fossil Inc., the parent company of supplier Fossil Corporate Markets (asi/55145), has reported its sales for the quarter ended April 5, 2014, increased 14% to $777 million. Wholesale net sales increased 13% and direct to consumer revenues rose 18%. Q1 retail same-store sales fell 2.4%, though, year-over-year and earnings decreased 8.2%, spurring a modest slide in Fossil’s (NASDAQ: FOSL) stock.
“We are pleased to be off to a good start in 2014, with a solid first quarter performance that produced revenue growth at the top end of our expectations,” said Kosta Kartsotis, CEO of Fossil. “We continued to expand our international footprint as we posted significant increases in both Europe and Asia and we expanded our business in the Americas, even as mall traffic remains challenging.”
Negating some gains, Fossil reported its Q1 operating expenses increased 19% to $338.5 million. Still, the company realized sales improvements across all of its business segments, with revenues of its core product, watches, rising 17%. “Our growth was driven by strong performance in watches, with both Fossil and our multi-brand portfolio delivering solid increases,” Kartsotis said. “Our jewelry business accelerated, more than offsetting the challenges we continue to see in the leathers business.”
Fossil is forecasting Q2 sales growth of 8% to 9.5% and earnings of 90 cents to 97 cents per share. In its earnings statement, the company reaffirmed its full-year forecast of revenues of at least $350 billion, which would represent an 8% sales increase compared to 2013.