Fossil Group Downgraded On Concerns About Wearables Business

Fossil Group Inc. shares were downgraded to underperform from market perform at Wells Fargo on concerns about the company's wearables business going forward. Fossil shares are down 17.1% in Wednesday premarket trading after reporting disappointing earnings results. Among the details analysts highlight are the fourth-quarter sales miss "despite a much-hyped push into wearables (that was three years in the making)," management's need to reinvest in wearable pricing in order to drive volume, and a plan to relaunch wearables in the third quarter with lower pricing, which will drive down profitability. Analysts anticipate that pricing will be 10% lower. Fossil shares are down 31.4% for the past year while the S&P 500 index is up 25.4% for the same period.