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


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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