By  on February 11, 2014

The Fossil Group Inc. swept past consensus estimates for fourth-quarter results while adopting a conservative stance toward the first quarter.In the three months ended Dec. 28, the Richardson, Tex.-based watch and accessories firm saw net income decline 1.7 percent to $148.5 million, or $2.68 a diluted share, from $151.1 million, or $2.51, in the year-ago quarter.Revenues expanded 12.1 percent to $1.06 billion from $947.7 million as gross margin grew to 57.4 percent of sales from 56.9 percent. On average, analysts expected earnings per share of $2.43 on revenues of $1.02 billion.RELATED CONTENT: WWD Earnings Tracker >>The company’s North American wholesale operations grew 12.8 percent to $400.1 million during the quarter while the largest increase in business by region came from Europe, where sales were up 17.6 percent to $273.9 million. Direct-to-consumer sales grew 8.7 percent to $279.6 millionBy product category, watches were up 14.3 percent to $833.8 million, leathers down 3.9 percent to $127.1 million, jewelry up 26.9 percent to $82.1 million and other products down 9.8 percent to $19.4 million.The company said that the strength in watches came despite “modest growth” for the Fossil brand and a “small decline” at Skagen. The company projected first-quarter EPS of between $1.10 and $1.18, below the consensus estimate of $1.30 for the period, and full-year EPS of between $6.90 and $7.30 versus a consensus estimate of $7.22.With the guidance viewed as cautious, investors bought into the stock in after-hours trading, sending it up 3.5 percent to $121 after it rose 1.7 percent to $116.96 in regular trading Tuesday.Kosta Kartsotis, chief executive officer, said, “As a global leader with unique strategic advantages in a growing category, our goal is to leverage the strength of our powerful portfolio of global brands, increase our geographic reach and expand our owned lifestyle brands in watches and other key categories.”For the full year, net income was off 1.7 percent to $148.5 million, or $6.56 a diluted share, as revenues expanded 14.1 percent to $3.26 billion.

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