Shares of Fossil Inc. slid nearly 10 percent in trading Tuesday after the accessories maker beat second-quarter earnings expectations but missed on sales and issued a weak third-quarter outlook.
For the three months ended July 4, the Richardson, Tex.-based firm’s net income fell 33.9 percent to $16.6 million, or 25 cents a diluted share, from $25.1 million, or 36 cents a share, a year ago.
Sales in the quarter fell 10.6 percent to $315.9 million from $353.2 million.
Analysts polled by Yahoo Finance had expected earnings of 20 cents a share on revenues of $321 million, on average. Shares of Fossil fell $2.65, or 9.6 percent, to close at $25.07.
On a call with investors, chief executive officer Kosta Kartsotis attributed the better-than-expected profits to gains in Fossil’s direct-to-consumer channel, expense management and favorable foreign currency rates.
Michael Barnes, president and chief operating officer, said second-quarter sales were affected by U.S. retailers’ conservative inventory management practices and Fossil’s reluctance to ship to credit-challenged customers in Europe.
The company said it expects net sales in the current quarter to decrease between 6 and 9 percent without adjusting for currency effects. It estimates earnings per share in the period will be between 38 cents and 42 cents. Analysts had been expecting third-quarter EPS of 46 cents on average.
Fossil is anticipating a possible return to positive sales figures in the fourth quarter when it expects EPS of 74 cents to 80 cents on net sales that will be flat to 3 percent better than a year earlier.
In the first half of the year, the watch and leather goods maker’s net income fell 38.7 percent to $33.9 million, or 51 cents a share, from $55.4 million, or 80 cents a share, in 2008. Sales in the six months slid 9.9 percent to $638.9 million from $709.4 million in the comparable 2008 period.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia