Watch is going on? Fossil shares jump despite rocky revenue performance

 
William Turvill
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Fossil suffered a 10 per cent fall in watch sales in the second quarter of 2016 (Source: Getty)

US watchmaker and retailer Fossil’s share price jumped in after-hours trading despite the company reporting some rocky revenue figures.

The figures

Worldwide net sales during the three months to 2 July were down seven per cent to $54.6m (£42m).

Fossil said the fall was driven by a “decline in the company’s multi-brand licenced watch portfolio and the negative impact of changes in foreign currency”.

Read more: Fossil to acquire wearable tech maker Misfit for $260m

Watch sales fell 10 per cent, while leathers grew four per cent and jewellery was up two per cent.

Net income for the quarter came in at $6m, down from $54.6m a year ago, while diluted earnings per share were $0.12, down from $1.12.

Why it's interesting

Fossil’s chief executive Kosta Kartsotis said that the results, “while below last year, were very much in line with our expectations from both a top and bottom line perspective”.

He noted that several areas of the business performed well but were dragged down overall by “continued weakness in the traditional watch category”.

Read more: The Apple Watch 2 might be coming this year

Investors seemed to be pleased enough with the results. Shares jumped two per cent in after-hours trading to $30.90.

Fossil Group Fossil Group | mobile image

What the company said

Kartsotis:

We believe that growth in Fossil and Skagen, strong performance from leathers and progress in wearables are solid indicators that we are on the right track, have the right long-term strategies in place and their performance reinforces our commitment to investing in these strategies to drive future growth.

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