FOSSIL POSTS 26.4% RISE IN EARNINGS
RICHARDSON, Tex. — Aided by strong domestic sales and improved margins, fourth-quarter profits at Fossil Inc. gained 26.4 percent on a 10.6 percent rise in sales.
In the quarter ended Dec. 31, earnings advanced to $4.8 million, or 36 cents a share, topping average Wall Street estimates of 34 cents a share.
In the year-ago quarter, the accessories firm reported earnings of $3.8 million, or 29 cents.
Sales increased to $64.9 million from $58.7 million.
The company, whose primary business is in watches, attributed the sales gain to domestic sales of Fossil leather goods and sunglasses, in addition to sales from new Fossil outlet and retail stores opened during 1996.
Randy Kercho, chief financial officer, said that the company opened one outlet and one full-price store in the latest quarter and nine outlets and three full-price units over the whole year.
Although ahead in the full year, international sales declined in the quarter due to poor economic conditions in several countries, the company said.
International sales were also slowed down by the changing of distributors in certain countries.
Gross margins in the quarter grew to 47.4 percent of sales from 45.7 percent, while selling, general and administrative expenses as a percentage of sales remained flat.
Fossil said that the higher margins reflected a greater mix of watches supplied by Fossil’s majority-owned factories and from products and business units with above-average margins, including sunglasses and sales from its outlet and retail stores.
In the full year, earnings climbed 12.7 percent to $13.6 million, or $1.02 a share, from $12.1 million, or 91 cents, a year ago.
Sales moved ahead 13.7 percent to $205.9 million from $181.1 million.
During the period, the company said, gross margins increased to comprise 47.6 percent of sales from last year’s 45.8 percent.