Fossil Group (NASDAQ:FOSL) Issues Quarterly Earnings Results, Beats Expectations By $0.23 EPS

Fossil Group (NASDAQ:FOSL) announced its earnings results on Tuesday. The accessories brand company reported $0.19 earnings per share for the quarter, beating the consensus estimate of ($0.04) by $0.23, RTT News reports. The firm had revenue of $271.20 million during the quarter, compared to the consensus estimate of $248.66 million. Fossil Group had a negative return on equity of 59.76% and a negative net margin of 7.09%. During the same quarter in the prior year, the company earned ($0.76) EPS.

Here are the key takeaways from Fossil Group’s conference call:

• Fossil Group reported Q3 net sales growth of 2% to $276 million, with its namesake brand up 14% and traditional watch sales up 6%. Management said growth extended across channels and highlighted continued strength in the U.S. and India.
• Adjusted operating income rose to $30 million, while gross margin expanded to 59.9%. The company raised full-year sales guidance to $980–$990 million and adjusted operating margin guidance to 5.5%–6.5%, and continues to expect positive free cash flow.
• Q3 sales benefited from about $10 million of wholesale shipments shifted forward from Q4, while store closures also affected the comparison. Management said the timing shift is reflected in its Q4 outlook, making the underlying quarterly growth trajectory important to watch.
• Product launches are contributing to momentum: Machine X1 and the new Swiss-made Signature collection are reportedly selling ahead of expectations. Fossil also extended its Diesel licensing partnership through 2032 and renewed its global partnership with Nick Jonas.
• Some Q3 margin improvement reflected lower royalty guarantees and lower tariff rates, so the quarter’s margin expansion may not fully represent ongoing performance. Management expects Q4 SG&A to rise to the low 50s as it steps up demand-generation investment, and noted that European trends remain a recovery effort despite recent improvement.

Fossil Group Stock Performance

Fossil Group stock traded up $1.92 during trading hours on Wednesday, hitting $9.79. The stock had a trading volume of 6,587,991 shares, compared to its average volume of 841,300. The company has a 50-day moving average of $6.37 and a two-hundred day moving average of $4.95. The company has a quick ratio of 1.05, a current ratio of 1.76 and a debt-to-equity ratio of 2.74. The company has a market cap of $578.68 million, a PE ratio of -7.62 and a beta of 1.61. Fossil Group has a fifty-two week low of $1.70 and a fifty-two week high of $10.55.

Top Fossil Group Stories

These are some of the FOSL stories that stood out recently:

• Positive Sentiment: Fossil reported third-quarter EPS of $0.19, versus analyst expectations for a loss, while revenue of $271 million exceeded estimates. Sales rose 0.4% year over year, or 2% at constant currency—the company’s first return to sales growth in four years. Fossil Group third-quarter results
• Positive Sentiment: Fossil extended its global Diesel licensing agreement for five years, providing continued access to a major brand partnership. Diesel licensing agreement extension
• Neutral Sentiment: Options activity rose substantially, with traders buying 2,672 call options versus a typical 203. That signals heightened interest in further gains, but options activity is speculative and does not confirm the rally will continue. Fossil stock draws options traders

Analysts Set New Price Targets

FOSL has been the subject of several research reports. Craig Hallum initiated coverage on Fossil Group in a research report on Thursday, September 10th. They issued a “buy” rating and a $12.00 price objective for the company. Lake Street Capital began coverage on shares of Fossil Group in a research report on Wednesday, October 7th. They set a “buy” rating and a $10.00 target price on the stock. Northland Securities set a $8.00 target price on shares of Fossil Group in a research report on Thursday, August 13th. Finally, Weiss Ratings reiterated a “sell (d-)” rating on shares of Fossil Group in a research note on Thursday, October 15th. One equities research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, Fossil Group has an average rating of “Moderate Buy” and a consensus target price of $9.25.

Insider Buying and Selling at Fossil Group

In other news, Director Pamela J. Edwards acquired 7,208 shares of the firm’s stock in a transaction dated Thursday, August 20th. The shares were bought at an average price of $5.58 per share, with a total value of $40,220.64. Following the acquisition, the director owned 50,251 shares of the company’s stock, valued at $280,400.58. This trade represents a 16.75% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders own 3.80% of the company’s stock.

About Fossil Group

Fossil Group, Inc. is a global design, sourcing, marketing and distribution company focused primarily on watches and accessories. Its products include traditional watches, jewelry, handbags, small leather goods and other fashion accessories sold through company-operated and third-party retail stores, e-commerce channels and wholesale partners. The company markets products under its Fossil, Skagen, Michele and Relic brands, as well as through various licensed brand relationships. Fossil Group was founded in 1984 and is headquartered in Richardson, Texas.