By  on February 17, 2010

Shares of Fossil Inc. gained 6.9 percent Tuesday to $36.58 after the accessories marketer posted both fourth-quarter profits and a first-quarter forecast well ahead of Wall Street expectations.

Net income for the period ended Jan. 2 increased 51.2 percent to $70 million, or $1.03 a share, compared with income of $46.3 million, or 69 cents, a year earlier. Quarterly revenue rose 13.7 percent to $527.8 million, driven by a 22.2 percent rise in direct sales, as well as a 9.9 percent increase in wholesale revenues, the company said. Fourth-quarter sales in 2009 totaled $464.1 million.

Analysts anticipated earnings per share of 91 cents on sales of $521 million, Yahoo Finance said.

Global comparable-store sales improved 12.1 percent, and gross margin as a percentage of sales improved to 56.4 percent versus 52.2 percent in the year-ago quarter. Fossil said gross margin benefited from reduced levels of low-margin sales through off-price liquidation channels and an increase in the mix of direct sales.

“At the onset of 2009, we were focused on making the company as efficient as possible on both expenses and inventory,” said Kosta Kartsotis, chief executive officer of the Richardson, Texas-based firm. “At the same time, we set out to increase innovation in our product offerings and to develop new game-changing product and branding ideas.”

For the year, Fossil’s net income edged up 0.8 percent to $139.2 million, or $2.07 a share, compared with income of $138.1 million, or $2.02, last year. Revenue contracted 2.2 percent in 2009 to $1.55 billion from $1.58 billion, a year earlier.

Fossil projected first-quarter EPS between 31 and 33 cents on net sales in the range of $519.8 million to $529.1 million. Full-year profits are anticipated to be between $2.25 and $2.35 a share on revenue in the range of $1.72 billion to $1.75 billion.

Analysts expected first-quarter EPS of 30 cents on sales of $344.7 million, and annual EPS of $1.94 on revenue of $1.54 billion.

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