Fossil, Inc. (FOSL) just gapped higher into a new all-time high after reporting strong Q1 results that included a 30% earnings surprise. With an industry rank of #2 out of 265 and bullish growth projection, this Zacks #1 rank stock is a momentum powerhouse.
Company Description
Fossil, Inc. designs, sells and licenses fashion accessories like watches, wallets and jewelry worldwide. The company was founded in 1984 and has a market cap of $6.5 billion.
We just got an update on Fossils business with strong Q1 results that came in well ahead of expectations.
First-Quarter Results
Revenue for the period was up 37% from last year to $537 million. Earnings also looked good, coming in at 86 cents, 30% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 54% over the last four quarters.
The good quarter was led by an impressive showing in watch sales, jumping 44% from last year to $113 million.
The company also showcased strong geographic diversity, with both North American and Europe wholesale shipments up 34% from last year.
Gross margin was also on the upswing, up 40 basis point from last year to 56.2% of sales.
Financial Profile
Going into Q2, Fossil’s killer balance sheet is well in tact, with cash and short-term investments of $355 million against just $5 million in total debt.
Estimates
We saw some pretty nice movement in estimates off the good quarter, with the current year adding 23 cents to $4.61 while the next-year estimate gained 40 cents to $5.52, a bullish 20% growth projection.
Valuation
In light of recent gains, FOSL does look a big pricey, trading with a forward P/E of 23X, a premium to its peer average of 15X.
12-Month Chart
On the chart, FOSL jumped into a new all-time high on the good quarter. Take a look at the big gains below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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