Fossil Group (FOSL) Stock Sinks as Fashion-Store Chain Trims Q1 Guidance

Fossil Group, Inc. (FOSL) shares plunged 13% to $86.39 in after hours Tuesday after the company missed Q4 profit and sales expectations.

Fossil reported adjusted EPS of $3.00 on revenues of $1.065 billion. Analysts were expecting EPS of $3.07 on revenues of $1.119 billion.

“We are not entirely satisfied with our fourth quarter performance and begin 2015 intensely focused on taking advantage of the many opportunities available to us to drive future growth,” commented Fossil CEO Kosta Kartsotis.

For Q1’15, the company provided EPS guidance of $0.59-$0.69 versus consensus of $1.21 per share. Fossil also issued revenue projection of $753-$784 million, compared to the consensus revenue estimate of $792.00 million. For 2015, the company said it expected adjusted EPS between $5.45 to $6.05 and sales to decrease by 1% – 3%. Separately, the chain announced Tuesday a global ten year licensing pact with Kate Spade watches, in which it will assume the design, development and distribution of its existing watch business.

On valuation measures, Fossil Group Inc. shares, which currently have an average 3-month trading volume of 787,105 shares, trade at a trailing-12 P/E of 14.47, a forward P/E of 13.17 and a P/E to growth ratio of 1.33. The median Wall Street price target on the name is $108.00 with a high target of $150.00. Currently ticker boasts 8 ‘Buy’ endorsements, compared to 6 ’Holds’ and 1 ‘Sell’.

Profitability-wise, FOSL has a t-12 profit and operating margin of 10.58% and 16.44%, respectively. The $5.07B market cap company reported $218.10M in cash vs. $625.97M in debt in its most recent quarter.

FOSL currently prints a one year loss of about 19%, and a year-to-date loss of 11.11%.

The chart below shows where the equity has traded over the last 52 weeks.

Fossil Group Inc. is engaged in the design and development of consumer fashion accessories worldwide. The company was founded in 1984 and is headquartered in Richardson, Texas.

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