Get 40% Off
🔥 This hedge fund gained 26.16% in the last month. Get their top stocks with our free stock ideas tool.See stock ideas

Here's How Fossil (FOSL) Looks Just Ahead Of Q3 Earnings

Published 11/04/2019, 10:53 PM
AAPL
-
HD
-
LOW
-
FL
-
FOSL
-

Fossil Group, Inc. (NASDAQ:FOSL) is scheduled to release third-quarter 2019 results on Nov 6. This clothing and accessories designer and manufacturer delivered a positive bottom-line surprise of 42.9% in the last reported quarter.

The Zacks Consensus Estimate for third-quarter earnings has been stable over the past 30 days at 40 cents per share. Notably, this suggests a substantial increase from the year-ago period’s reported figure. However, the consensus mark for revenues is $569.2 million, indicating a drop of 6.5% from the figure reported in the year-ago quarter.

Fossil Group, Inc. Price and EPS Surprise

Fossil Group, Inc. price-eps-surprise | Fossil Group, Inc. Quote

Key Factors to Note

Fossil’s top-line performance is likely to reflect softness in the traditional watch category in the quarter under review. We note that the company has been witnessing soft sales in this category for a long time now due to increased competition and rising demand for tech-savvy watches. Further, sales of leathers and jewelry have persistently been weak since the last few quarters due to soft demand.

Though Fossil has been expanding its smartwatches and wearable portfolio, it seems unlikely that the categories have managed to offset the softness in the quarter under review. Persistence of such headwinds along with several business and licensed brand exits and currency woes is likely to show on Fossil’s top-line performance in the third quarter. In the last earnings call, management guided a 6-13% decline in net sales for the third quarter, reflecting a 2.5% adverse impact from business exits and around 1.8% from unfavorable currency movements.

Nonetheless, the company’s bottom line is likely to have benefited from its New World Fossil plan, which is focused on fueling efficiencies, improving margins and enhancing the overall operating structure to drive profitability. As part of this transformation plan, Fossil has been committed toward prioritizing revenue optimization, delivering gross margin and achieving productivity savings. We believe this savings initiative to have lent support to Fossil’s earnings in the third quarter.

What the Zacks Model Unveils


Our proven model does not conclusively predict an earnings beat for Fossil this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Fossil has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Foot Locker (NYSE:FL) has an Earnings ESP of +2.80% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Home Depot (NYSE:HD) has an Earnings ESP of +0.23% and Zacks Rank #2.

Lowe’s Companies (NYSE:LOW) has an Earnings ESP of +1.25% and a Zacks Rank #2.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .


Lowe's Companies, Inc. (LOW): Free Stock Analysis Report

The Home Depot, Inc. (HD): Free Stock Analysis Report

Fossil Group, Inc. (FOSL): Free Stock Analysis Report

Foot Locker, Inc. (FL): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: 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.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.