Ahead of the Bell: Fossil shares rise
NEW YORK (AP) — Shares of Fossil jumped 3 percent before the opening bell Wednesday after the company topped Wall Street expectations for the quarter and issued a strong financial outlook for the year.
The watch and accessories maker has been moving into new markets like China and pushing its Skagen watch brand globally.
Citigroup analyst Oliver Chen said Fossil's investment in design and innovation should improve handbag sales this year and its Skagen brand should also do well.
Sterne Agee & Leach Equity Research raised its estimates and price target on the company.
Jefferies & Co. analyst Randal Konik said that while share buybacks helped, it's clear that the company is gaining market share in a competitive field.
"We see multiple positive catalysts ahead, including strong European trends, the launch of the Tory Burch line later this year and growth prospects in Asia," Konik wrote.
Fossil projected earnings between $6.90 per share and $7.30 per share this year. It expects revenue to rise between 8 percent and 10 percent from the year before. That would mean a total between $3.52 billion and $3.59 billion.
Analysts expected earnings of $7.21 per share and revenue of $3.53 billion.
Fossil, based in Richardson, Texas, also makes watches for brands it licenses, including Michael Kors and Armani Exchange. It will start selling Tory Burch watches during the fourth quarter.
Shares of Fossil Group Inc. rose $3.64 to $120.60 in premarket trading.