Investing.com -- Shares in Fossil Group Inc (NASDAQ:FOSL) plummeted nearly7% in after-hours trading after the Texas-based clothing and jewelry manufacturer, posted weaker than expected quarterly earnings on Tuesday dented by the negative effects of a stronger dollar.
For the company's second quarter which ended in early-July, Fossil reported net earnings of $54.6 million or 1.12 per share, up slightly from net profits of $52.5 million or 0.98 during the same period in 2014. Fossil's revenue, meanwhile, fell mildly to $740 million for the period in comparison with sales of $774 in the same quarter a year ago. Analysts expected revenues of $750 million or 0.82 per share.
The negative effects of currency translation could be seen throughout the earnings report. Although Fossil's sales for the quarter dipped by 4% year-over-year, the company said they increased 2% on a constant currency basis. In Europe, for instance, revenues sunk by 12% overall but were 2% higher when the impact of the stronger dollar was discounted. By the same token, Asian sales fell by 6% overall but increased by 1% in total minus the loss created by the dollar's appreciation. Among its segments, leathers and jewelry were relatively flat overall but up nine and 11% respectively on a constant currency basis.
“For the second quarter, we delivered constant currency sales growth across all regions and earnings per share growth ahead of our expectations. Sales were strong for both Fossil and Skagen in all regions, with early indications that our demand creation initiatives are working," Fossil Group CEO Kosta Kartsotis said in a statement. "These initiatives will expand sharply in the second half of the year to further drive Fossil and Skagen sales performance."
The disappointing sales prompted Fossil to revise its full-year guidance to $4.80 and $5.60 for the year, down from a previous forecast of $5.25 and $6.05.
“While near term-challenges exist, we remain confident in our long-term strategies. We will continue to drive innovation across our portfolio to grow our business and deliver high returns," Kartsotis added.
Shares in Fossil fell 4.11 or 6.62% to 62.11 in after-hours.