Fossil Cuts Earnings Guidance Again

Fossil Group Inc. on Tuesday cut its full-year guidance again and gave a weak outlook for the current quarter, after a strong U.S. dollar weighed on results in the three months ended June.

Shares fell 7% in after-hours trading and were down 44% this year through Monday's close.

For the full year, Fossil expects per-share earnings between $4.80 and $5.60, compared with its previous forecast of $5.25 to $6.05 a share. Analysts had called for $5.57 a share. The watchmaking company had previously cut its full-year guidance in May.

On Tuesday, the company said it expected results would be "significantly negatively impacted" by currency fluctuations.

For the current quarter, Fossil expects earnings between $1.03 and $1.28 a share. Analysts had expected per-share earnings of $1.45.

In the June quarter, Fossil posted a profit of $54.6 million, or $1.12 a share, up from $52.5 million, or 98 cents a share, a year earlier. However, revenue fell to $740 million from $774 million a year earlier.

Analysts had expected earnings of 82 cents a share on revenue of $750 million.

In the Americas, sales grew 1%, although the company would have seen a 3% increase without the dollar's gains. Sales fell 12% in Europe and 6% in Asia.

Sales of watches fell 6%, though they would have been flat in constant currency. Sales of leathers grew 2%, while jewelry sales fell 1%.

Last year, Fossil, known for the affordable timepieces it sells in U.S. malls, opened a design-and-development center in Switzerland's watch country. The company, the world's fourth-biggest watchmaker by revenue, has been aiming to bridge the gap between its mass-market timepieces and entry-level luxury watches.

Write to Angela Chen at [e-mail]

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