Market Overview

Wells Fargo: Fossil Group May Have Little To Celebrate In The Holiday Quarter

Wells Fargo: Fossil Group May Have Little To Celebrate In The Holiday Quarter

The top-line performance and overall direction of Fossil Group Inc’s (NASDAQ: FOSL) business continue to be concerning, according to Wells Fargo.

The Analyst

Ike Boruchow maintained an Underperform rating on Fossil Group with an unchanged $8 price target.

The Thesis

Following weak performance in the first and second quarters, the focus is now on Fossil Group’s performance in the back half of the year, and the outlook is not compelling, Boruchow said in a Thursday note. (See his track record here.) 

The company had a slow start to the year, with an 18% decline in its first-quarter top-line, representing the highest quarterly sales decrease in its history, the analyst said. After this performance, expectations for the second quarter were not high, and the results were broadly in-line, he said. 

The traditional watch business continues to be under severe pressure, while the wearables business is underperforming, Boruchow said.

“At the end of the day this remains a top-line story and given the negative trends in FOSL’s largest category, we continue to be very concerned with the direction of the business.”
Wells Fargo has two main reasons for its negative outlook on the back half of the year, the analyst said. 

At the midpoint, the company’s third-quarter sales guidance implies a fourth consecutive quarter of double-digit decline in constant currency terms, he said; moreover, management reduced the high end of its gross margin guidance.

Price Action

Fossil Group shares were up 5.05% at $10.92 at the time of publication Thursday. 

Related Links

Fossil Group's Earnings Preview

Fossil's Q1 Beat Elicits Mixed Analyst Reactions

Latest Ratings for FOSL

Aug 2018MaintainsOverweightOverweight
Jun 2018MaintainsOverweightOverweight
Feb 2018MaintainsNeutralUnderperform

View More Analyst Ratings for FOSL
View the Latest Analyst Ratings

Posted-In: Ike Boruchow Wells FargoAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga


Related Articles (FOSL)

View Comments and Join the Discussion!

Latest Ratings

HSKACanaccord GenuityMaintains75.0
AVGOMorgan StanleyMaintains265.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Citi Upgrades Mercadolibre As Shares Soar Following Q2 Earnings

Carl Icahn Rips Anadarko Buyout, Talks Cloudera And Trade War