Fossil Profit Grows on U.S. Watch Sales, Global Expansion

By Retail FOXBusiness

Watchmaker Fossil (FOSL) reported a much stronger-than-expected fourth-quarter profit on sharply higher watch sales in North America and an increased presence in Asia.

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The company on Tuesday said it earned $117.9 million, or $1.87 a share, compared with a year-earlier $96.7 million, or $1.46. Revenue was up 19% to $830.8 million on double-digit comparable sales growth.

Analysts polled by Thomson Reuters were expecting a smaller profit of $1.77 on sales of $841.1 million. Shares of Fossil were up about 5.6% to $110.35 before noon on Tuesday.

"We are pleased to cap off another outstanding year for Fossil by continuing with strong, double-digit sales growth across our operating segments," Fossil chief financial officer, Mike Kovar, said in a statement.

He attributed the sales gains to growth across major brands and geographies, particularly Asia, as well as the ongoing success of its two core global growth strategies. Demand for Fossil-branded watches in North America climbed 20.9% to $41.5 million, while leather sales grew 9.5% to $4.8 million.

For the current year, Fossil said it will continue emphasizing the same strategies that led to its strong 2011 and tighten its focus on Asia.

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Fossil sees sales growth in the 15% range, with 2012 earnings between $5.40 and $5.50 a share, in line with the Street’s view of $5.44.

It sees earnings for the first quarter in the range of 90 cents to 92 cents, below average estimates of 98 cents.

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