Shares of Fossil Group Inc. surged 17.8 percent in trading Tuesday, after the accessories and watch firm posted an 18.2 percent jump in second-quarter profit.
This story first appeared in the August 7, 2013 issue of WWD. Subscribe Today.
Fossil also raised its earnings outlook for the year.
Growing demand for Fossil’s product in Asia and Europe helped the Richardson, Tex.-based company bring in profit of $67.7 million, or $1.15 a diluted share, for the quarter ended June 29. This compared with year-ago income of $57.3 million, or 92 cents a share.
Net sales rose 11 percent to $706.2 million from $636.1 million a year earlier.
Analysts anticipated earnings per share of 93 cents on sales of $691.2 million.
By market, sales in America increased 4.4 percent to $260.7 million, while sales in Europe expanded 15.6 percent to $170.7 million, and in Asia-Pacific, sales grew 14 percent to $96.2 million. Fossil’s direct-to-consumer business grew 15.8 percent to $178.6 million.
“During the quarter we advanced each of our core growth initiatives with strength in our Fossil and Skagen brands, and double-digit sales increases in our multibrand watch portfolio and in jewelry,” said chief executive officer Kosta Kartsotis. “We continued to leverage the power of our brands and our distribution infrastructure to expand our international footprint, fueling robust revenue increases in both Europe and Asia. Our team made substantial progress on many key operational initiatives that drove significant gross-margin expansion in the quarter. Our consistent positive performance continues to reflect the innovation in our watch and jewelry lines, the disciplined execution of our strategies by our team and our ability to capitalize on the inherent strength of our dynamic global operating model.”
Based on that strength, Fossil raised its full-year profit guidance to between $6.15 and $6.35 a diluted share, up from EPS ranging from $6 to $6.35. Wall Street is looking for annual earnings of $6.17 a share.
Shares of Fossil closed at $126.55.