Fossil Profit Forecast Misses Estimates


Fashion accessory maker and retailer Fossil Group Inc (NASDAQ:FOSL) forecast a weaker-than-expected profit for this quarter after reporting the third straight decline in comparable sales in North America.

Fossil shares fell 8 percent in extended trading.

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The company, which sells watches ranging from $7 to upwards of $2,000, has been struggling to keep up with fast-growing affordable luxury peers such as Michael Kors Holdings Ltd and Kate Spade & Co.

Fossil said it expects second-quarter earnings in the range of 90-97 cents per share.

Analysts on average were expecting $1.16 per share, according to Thomson Reuters I/B/E/S.

The retailer forecast current-quarter sales to rise between 8 percent and 9.5 percent, which translates to about $764.5 million-$775 million - largely below analysts' average expectations of $773.4 million.

Fossil said watch sales in stores open for at least a year fell in North America, its largest market, due to weak mall traffic in the first quarter ended April 5.

Global retail comparable store sales fell 2.4 percent, marking the third straight quarter of decline.

Worldwide net sales increased 14 percent to $776.5 million.

Operating expense jumped 19 percent to $338.5 million.

Net income fell to $66.3 million, or $1.22 per share, from $72.2 million, or $1.21 per share, a year ago.

Analysts on average expected the company to earn $1.17 on revenue of $777.6 million, according to Thomson Reuters I/B/E/S.

Fossil shares, which have fallen more than 11 percent in 6 months, closed at $112.08 on the Nasdaq on Tuesday.

(Reporting by Devika Krishna Kumar in Bangalore; Editing by Joyjeet Das)