) has authorized a new share buyback program to repurchase up to
$1.0 billion of its outstanding shares, reflecting the company's
strong balance sheet and robust cash flow. The program will
expire on December 31, 2016 but can be discontinued at any time
on the company's discretion. The company had repurchased
approximately 9 million shares for $693 million on December 4
under its current $750 million share repurchase program. The
company expects to complete the $750 million program in the first
quarter of 2013.
Fossil recently reported its third quarter 2012 earnings of
$1.28 per share, which exceeded the year-ago earnings by 17.4%
and the Zacks Consensus Estimate by 9.4%. The results also
exceeded management's guidance range of $1.15-$1.17 per share.
The upswing in results was driven by top-line growth, improved
margins and prudent expense management.
Fossil's net sales during the quarter increased 6.4% to $684.2
million, driven by strong global watch sales and improved leather
businesses. The acquisition of the Skagen brand also fuelled
sales growth. The jewelry and eye-wear businesses partially
offset sales growth. Net sales, however, lagged the Zacks
Consensus Estimate of $715 million. The company lowered its net
sales guidance for the fourth quarter 2012 due to expectation of
a decline in European wholesale businesses. Fossil expects sales
to increase approximately 12% in contrast to 16% growth
forecasted previously. On a constant currency basis, the company
expects net sales to increase 13% compared with 18% forecasted
Adjusted earnings (excluding non-recurring costs associated
with the acquisition of Skagen as well as certain tax benefits)
for the fourth quarter are expected in the range of $2.26 - $2.29
per share. For fiscal 2012, Fossil has raised its adjusted
earnings per share guidance to a range of $5.42 to $5.45 compared
with the previous range of $5.29 to $5.34.
The Zacks Consensus Estimate is pegged at $2.27 and $5.40 per
share for the fourth quarter and fiscal year 2012,
We have a Neutral recommendation on the stock over the long
term. Currently, Fossil carries a Zacks #2 Rank (short-term Buy
rating) in contrast to its peer
), which carries a Zacks #3 Rank (short-term Hold rating).
FOSSIL INC (FOSL): Free Stock Analysis Report
GUESS INC (GES): Free Stock Analysis Report
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