Fossil Increases Sales but Misses Revenue Estimate

Seth Jayson, The Motley Fool
Updated

Fossil (NAS: FOSL) reported earnings on May 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Fossil missed estimates on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share grew.


Margins dropped across the board.

Revenue details
Fossil logged revenue of $589.5 million. The 13 analysts polled by S&P Capital IQ expected revenue of $617.6 million on the same basis. GAAP reported sales were 9.8% higher than the prior-year quarter's $537.0 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.93. The 16 earnings estimates compiled by S&P Capital IQ anticipated $0.92 per share. GAAP EPS of $0.93 for Q1 were 8.1% higher than the prior-year quarter's $0.86 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 55.8%, 40 basis points worse than the prior-year quarter. Operating margin was 14.1%, 310 basis points worse than the prior-year quarter. Net margin was 9.9%, 50 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $651.3 million. On the bottom line, the average EPS estimate is $0.94.

Next year's average estimate for revenue is $3.00 billion. The average EPS estimate is $5.57.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 472 members out of 548 rating the stock outperform, and 76 members rating it underperform. Among 190 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 175 give Fossil a green thumbs-up, and 15 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Fossil is outperform, with an average price target of $136.18.

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At the time thisarticle was published Seth Jayson owned shares of the following at the time of publication: Fossil. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Fossil. Motley Fool newsletter services have recommended buying shares of Fossil. Motley Fool newsletter services have recommended shorting Fossil. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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