Hot stock to watch: U.S. watches and fashion accessories manufacturer Fossil Inc (FOSL) on Tuesday released the fiscal 2012 second quarter results. Foe the second quarter, the company grew net profit by 12%, exceeding market expectations, primarily benefited from the growth of the Asian demand as well as the strong watch sales. Fossi also lowered its full-year earnings target, but still higher than the consensus expectations. Promoted by the good results, FOSL stock price surged more than 31% in the regular trading session on the Nasdaq.
Financial Results:
For the quarter ended June 30, Fossi posted a net profit of $57.3 million, or 92 cents per share from a year earlier of $51.4 million, or 80 cents per share, topping the average analyst estimate of 78 cents per share, according to the survey by FactSet Research.
Revenue grew 14%, from $557 million a year earlier to the current $636 million, in line with the average analyst estimate. Fossil said, watch manufacturer, Skagen Designs Ltd, acquired in April this year, had contributed $25.2 million to the second quarter revenue. In the second quarter watch sales increased 17% and leather goods sales increased 8%. The company’s Asian revenues increased 24%, to $84.4 million, accounting for approximately 13% of the total revenue. The European revenue rose 4% and the North America revenue climbed 17%. Fossil’s self-store revenue grew 15% to $154 million, thanks to the increase in the number of stores. Same-store sales advanced 1.8%.
Financial Guidnace:
The company forecasts the third-quarter adjusted earnings of $1.15-$1.17 per share, and revenue will increase by 11% to $714 million. Analysts on average have been expecting the company’s third quarter earnings of $1.37 per share, on revenue of $ 743 million. Fossil estimates the fourth-quarter revenue will grow 16% to $ 964 million, below the average analyst estimate of $ 969 million. For the full fiscal year 2012, the company currently expects adjusted earnings of $5.29-$5.34 per share, higher than the average analyst forecast of $5.28.
Stock Prformance:
FOSL stock price surged 31.49%, or $21.98, to $91.77, on a volume of 7.02 million shares, well above its daily average of 1.30 million shares. The hot stock was traded as high as $93.45 and as low as $82.61 in today’s trading session. The current FOSL stock price is 34.07% off its one-year high of $139.20; and is above its 50-day moving average of $71.72 while below its 200-day moving average of $95.51. Fossil has a market cap of $5.68 billion.