Fossil Dull On Weak Traditional Watch Sales: Can It Recover?
Zacks Investment Research | Jan 15, 2020 09:03PM ET
Fossil Group, Inc. (NASDAQ:FOSL) has been witnessing drab sales trend, stemming from sluggishness in traditional watches, leather and jewelry businesses. Traditional watch sales have been bearing the brunt of intense competition and rising demand for connected watches. Also, adverse impacts from currency fluctuations, tariffs and business exits are hurting the top line.
Let’s take a closer look.
What’s Hurting Fossil’s Performance?
Fossil is witnessing soft sales in traditional watches for a while now. Increased competition and rising demand for tech-savvy watches has been the prime deterrent. Evidently, the company’s watch sales declined 8.6% in third-quarter 2019. Moreover, performance of mid-priced fashion watches continued to be dismal in the quarter under review.
This apart, sales of leathers and jewelry businesses have been weak since the past few quarters due to soft demand. Well, these factors coupled with business exists have taken a toll on the company’s top line that has been declining year over year for a long time. Notably, in the third quarter, worldwide net sales fell 11%, following a decline of 13% and 18% in the second and the first quarter, respectively.
Further, adverse currency movements impacted Fossil’s net sales during the third quarter. Moreover, the bottom line was hurt by 4 cents due to currency woes. Volatile currency movements are a threat to the company’s performance.
Owing to these downsides, shares of this Zacks Rank #3 (Hold) company have slumped 55.2% in the past year compared with the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.