Fossil Group Inc. showed some more traction in wearables in the fourth quarter and signs of stability in its finances.
The company’s net losses widened very slightly, to $48.3 million from $48.2 million a year ago. Losses per share, however, improved to 99 cents from $1 due to an increase in the shares outstanding.
Sales for the quarter slipped 2.2 percent to $569.2 million from $581.8 million. Watch sales slipped 2 percent to $448 million in the quarter, although the company said its sales in the connected watch category nearly doubled.
Fossil shares rose 12.8 percent to $16.44 during the day’s trading session, anticipating a good after-market report from the company. And investors seemed largely satisfied, pulling back the stock just slightly, to $16.10 in after-hours trading. (A recent tally of fashion-stock performance so far this year showed Fossil with the strongest showing in the industry. The stock closed up 112 percent for the year Tuesday).
Kosta Kartsotis, chairman and chief executive officer, said: “We had an encouraging start to the year, delivering first-quarter sales results that were stronger than our expectations. This performance reflects the disciplined execution of our strategy which capitalizes on our strong design, innovation, distribution and operating capabilities. These core capabilities, when combined with a powerful global brand portfolio, drove our connected watch sales and helped improve traditional watch performance, while increasing efficiencies across our enterprise.”
After the quarter ended, the company signed a license to make Puma watches.
Kartsotis said: “We believe we have the right strategies, brands and balance sheet strength to continue to transform our company and ultimately return to long-term profitable growth.”
The company said it would continue to adjust its business model to “address changes in consumer behaviors and their purchases of traditional watches and connected devices, as well as jewelry and leathers.”
Fossil is projecting sales this year to fall between 5 and 12 percent while its before-tax take ranges from losses of $40 million to profits of $50 million.