Shares of Fossil Group Inc. dropped more than 13 percent in Wednesday premarket trading as the company's fourth-quarter results and outlook disappointed investors.
Late Tuesday, the watch and accessories company reported a fourth-quarter profit of $3 per share on revenue of $1.06 billion. Analysts surveyed by Zacks Investment Research anticipated a profit of $3.10 per share on revenue of $1.12 billion.
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Jefferies analyst Randal Konik said in a note to clients that foreign currency exchange hurt Fossil's fourth-quarter performance. The analyst remains optimistic about the company, though, saying that he believes it will continue to benefit from a growing brand portfolio and globalization of its business.
The analyst lowered the company's price target to $130 from $150 and maintained a "Buy" rating.
For the first quarter, Fossil predicts earnings between 59 cents and 69 cents per share. Analysts expect earnings of $1.25 per share, according to Zacks.
The Richardson, Texas-based company foresees 2015 earnings in a range of $5.45 to $6.05 per share. Analysts polled by FactSet had expected earnings of $7.49 per share.
Edward Yruma of KeyBanc Capital Markets said that the North American watch business may be in the early stages of a slowdown, with Fossil possibly "uniquely susceptible" because of its strong position in the fashion watch market. The analyst said Fossil may still be overly optimistic in its 2015 outlook.
The analyst lowered the company's price target to $75 from $85 and kept an "Underweight" rating.
Fossil Group's stock fell $13.32, or 13.4 percent, to $86 before the market open.