Market Overview

Fossil To Report 50% Decline In Earnings? Everyone Seems To Think So

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Fossil Group Inc (NASDAQ: FOSL) will report its first quarter financial results after the market closes on Tuesday and, according to Estimize, expectations point towards a year-over-year decline in earnings of almost 50 percent.

In the first quarter of 2014, the company reported earnings of $1.22 per share on revenue of $777 million. For the first quarter of 2015, management guided EPS of $0.64 on revenue of $726.03 million. While the Street seems to agree regarding the projected earnings of $0.64 per share, analysts expect higher revenue ($732.52 million). The crowd, for its part, is slightly more bearish, and anticipates consensus earnings of $0.63 on revenue of $729.08 million.

The decline in earnings is even more significant when compared to last quarter’s $3.00 per share.

The graph below illustrates Fossil’s history of actual earnings compared to guidance and consensus estimates.

The company has a history of either beating or meeting estimates and guidance, with the exception of a slim miss in its latest quarter.

Related Link: 11 Buyout Targets Credit Suisse Is Watching

Another graph shows how expectations evolved over time.

Since the end of January, Wall Street’s earnings estimates fell more than 50 percent, while guidance and the crowd maintained their levels.

It’s All About The Brands

In a recent note, analysts at Zacks remark that, “while the company has been delivering positive comps internationally driven by continued strengthening of the Fossil, Skagen and Michael Kors brands; Fossil has been witnessing continued slow traffic in the U.S. (…) Overall, we [the analysts] are encouraged by the performance of Fossil and Skagen brands and the company’s global licensing agreement with Kate Spade & Company to boost the watch portfolio. However, currency translations remain a concern for Fossil and the company expects foreign currency to continue to hamper profitability in the upcoming quarters.”

On another note, analysts at Credit Suisse mentioned Fossil as a potential buyout target in a research report.

Latest Ratings for FOSL

DateFirmActionFromTo
Mar 2020Wells FargoMaintainsUnderweight
Nov 2019Wells FargoMaintainsUnderperform
Nov 2019KeyBancDowngradesOverweightSector Weight

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