Fossil's 1Q earnings rise 24 pct on strong sales

Fossil's 1Q earnings rise 24 pct on strong sales, store expansion

Associated Press

RICHARDSON, Texas (AP) -- Fossil Inc.'s first-quarter earnings rose 24 percent as the purveyor of watches and handbags enjoyed strong sales.

The company, based in Richardson, Texas, said Tuesday that it earned $72.2 million, or $1.21 per share, for the three months that ended March 30. That compares with $58.1 million, or 93 cents per share, a year earlier.

Excluding special items related to a Spanish joint venture and other one-time benefits and charges, the company earned $1.08 per share.

Revenue rose 15.5 percent to $680.9 million.

Analysts had expected earnings of 97 cents per share on revenue of $651.9 million, according to FactSet.

"We are off to an excellent start in fiscal 2013, with record first-quarter results that exceeded both our top and bottom line expectations," CEO Kosta Kartsotis said in a statement.

Fossil's watches and other products are sold by department stores and other retailers, and the company also has stores of its own as well as a website.

Sales to other retailers rose 13.3 percent in North America, 15.3 percent in Asia and 13.5 percent in Europe. Sales through the company's own stores and websites rose 22.7 percent as Fossil opened more shops.

For the current quarter, Fossil expects net sales to increase 8 percent to 9 percent from last year's $636.1 million. That implies it expects anywhere from $686.9 million to $693.3 million for the second quarter.

It anticipates earnings per share to be in the range of 89 cents to 94 cents.

Analysts had expected $1.05 per share on revenue of $700.7 million

For the full year, Fossil expects net sales to increase 10 percent to 11 percent from last year's $2.85 billion. That implies it expects revenue to be anywhere from $3.13 billion to $3.16 billion.

It projects earnings per share in the range of $6 to $6.26 per share.

Analysts had expected earnings per share of $6.08 on revenue of $3.16 billion, according to FactSet.

Shares rose more than 4 percent, or $4.04 to $103 in premarket trading. It closed at $98.96 on Monday.