Euro jitters vexed global stock markets Tuesday, but Fossil Inc. took a direct hit after it warned of first-quarter sluggishness in Europe and cut its annual profit outlook.
Shares of the accessories and watch vendor fell 37.6 percent to $78.52 as the S&P Retail Index declined 1.1 percent, or 6.75 points, to 629.44 and the Dow Jones Industrial Average slipped back below 13,000, falling 0.6 percent, or 76.44 points, to 12,932.09.
Kosta Kartsotis, Fossil’s chairman and chief executive officer, admitted to analysts on a conference call that the firm was “not firing on all cylinders” in the first quarter.
Fossil lowered its full-year earnings guidance to between $5.30 and $5.40 a share, down from the $5.40 to $5.50 it projected earlier. Skagen Designs Ltd., acquired in January, is expected to boost annual earnings by 22 cents a share, a benefit partially offset by transaction costs of 15 cents a share. Wall Street was looking for earnings per share of $5.56.
“Continued weak economic conditions in Europe and parts of Asia, as well as the resultant impact of certain product line adjustment were magnified in what is historically our lowest sales quarter of the year,” Kartsotis said. “While certain geographies are feeling economic pressure, there continues to be strong interest in watches and accessories and considerable white space for us to pursue across our product categories.”
Kartsotis remained optimistic about the firm’s jewelry collections, which include lines from Michael Kors and Skagen. Fossil said it expects to reach $30 million in sales this year from Kors jewelry alone.
For the first quarter ended March 31, Fossil posted a 5.2 percent increase in net income to $61.1 million, or 93 cents a diluted share — 1 cent higher than analysts expected. Quarterly sales increased 9.8 percent to $589.5 million.
Fossil’s troubles reverberated in shares of Michael Kors Holdings, which fell 5.3 percent to $41.75, and Movado Group Inc., down 9.7 percent to $25.61.
In Europe, investors cautiously eyed France’s new antiausterity president, François Hollande, and worried anew that Greece could tear up its bailout deal with the European Union.
The CAC 40 in Paris led the slide, falling 2.8 percent to 3,124.80, followed by the FTSE MIB in Milan, which was down 2.4 percent to close at 13,936.70. The DAX in Frankfurt sank 1.9 percent to 6,444.74, while the FTSE 100 in London retreated 1.8 percent to 5,554.55.
The decliners included Hugo Boss, which tumbled 4.1 percent to 79.13 euros; Burberry Group, 3.8 percent to 14.27 pounds; Luxottica Group, 4 percent to 27.26 euros, and LVMH Moët Hennessy Louis Vuitton, 3.4 percent to 123.20 euros. The euro traded at $1.30 while the pound went for $1.62.
The leader of the Greek left-wing party Syriza has three days to form a coalition government, and has vowed to back out of the austerity deal that Greece brokered with the EU last year and to nationalize the country’s banks.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)