Fossil Group Inc. on Tuesday cut its full-year guidance again
and gave a weak outlook for the current quarter, after a strong
U.S. dollar weighed on results in the three months ended June.
Shares fell 7% in after-hours trading and were down 44% this
year through Monday's close.
For the full year, Fossil expects per-share earnings between
$4.80 and $5.60, compared with its previous forecast of $5.25 to
$6.05 a share. Analysts had called for $5.57 a share. The
watchmaking company had previously cut its full-year guidance in
May.
On Tuesday, the company said it expected results would be
"significantly negatively impacted" by currency fluctuations.
For the current quarter, Fossil expects earnings between $1.03
and $1.28 a share. Analysts had expected per-share earnings of
$1.45.
In the June quarter, Fossil posted a profit of $54.6 million, or
$1.12 a share, up from $52.5 million, or 98 cents a share, a year
earlier. However, revenue fell to $740 million from $774 million a
year earlier.
Analysts had expected earnings of 82 cents a share on revenue of
$750 million.
In the Americas, sales grew 1%, although the company would have
seen a 3% increase without the dollar's gains. Sales fell 12% in
Europe and 6% in Asia.
Sales of watches fell 6%, though they would have been flat in
constant currency. Sales of leathers grew 2%, while jewelry sales
fell 1%.
Last year, Fossil, known for the affordable timepieces it sells
in U.S. malls, opened a design-and-development center in
Switzerland's watch country. The company, the world's
fourth-biggest watchmaker by revenue, has been aiming to bridge the
gap between its mass-market timepieces and entry-level luxury
watches.
Write to Angela Chen at angela.chen@wsj.com
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