Fossil shares jump on strong quarter and renewed deal with Michael Kors

MarketsAssociated Press

Fossil shares took off Wednesday on strong third-quarter numbers and a renewed deal with Michael Kors.

The company reported quarterly earnings late Tuesday, breezing past Wall Street's per-share expectations by 14 cents.

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It also beat revenue expectations.

Fossil said that it anticipates full-year earnings between $7 and $7.30 per share. Analysts polled by FactSet are anticipating earnings of $7.20 per share.

The company announced a renewed a licensing deal with Michael Kors that through 2024. The retailer sells Fossil's watches and jewelry.

Sterne Agee analysts Ike Boruchow and Tom Nikic said that Fossil eased two sources of investor concern with the third-quarter beat and the renewal of the Kors license.

The analysts wrote that the licensing deal was of particular concern as Michael Kors likely accounts for 25 to 30 percent of the company's revenue. However, Sterne Agee believes the renewed contract may come with less favorable terms for Fossil.

Shares of Fossil Group Inc. rose 8.2 percent to $112.17 by early afternoon. The Richardson, Texas, company's shares had dropped roughly 13 percent since the beginning of the year.