Disappointing results at accessory retailer Fossil sparked a selloff of the company’s stock that rippled throughout the retail sector, including the seemingly Teflon high-end retail sector.
Although Fossil’s first-quarter profit and revenue rose 4.2 percent and 9.8 percent respectively, revenue fell shy of analysts’ expectations. But it’s the company’s concerns about Europe and its lowered guidance that is sending its shares tumbling.
Prior to today, Fossil shares were up 58 percent this year. Now, the stock is negative for the year-to-date period.
“In Europe, a softening macro environment toward the end of the first quarter and changes in our merchandising and assortment strategies across certain categories negatively impacted both our wholesale and retail sales in that region,” Fossil’s Chief Financial Officer Mike Kovar said in the company’s earnings release.
However, sales actually rose in Europe for Fossil year over year, but those sales are making up a smaller percentage of total sales, dropping to 25.9 percent from 28.3 percent last year.
Fossil now estimates it will earn between $5.30 and $5.40 a share, down from its previous forecast of $5.40 to $5.50 a share. On average, analysts estimated the company would earn $5.65 a share, according to Thomson Reuters.Page 1 of 3 | Next Page