Shares of luxury fashion accessories maker, Fossil Inc. (NASDAQ:FOSL) surged in trading today after the company reported better-than-expected fiscal second quarter earnings, driven by strong growth in revenue from international markets. The company also boosted its full-year profit outlook, surpassing Streetâ€™s estimations.
For the period, Fossilâ€™s earnings stood at $57.3 million or 92 cents a share compared to profit of $51.4 million or 80 cents a share, in the corresponding period of last year. After excluding onetime expenses, earnings stood at 93 cents a share, beating analystsâ€™ estimations of 78 cents a share.
Following the earnings announcement, shares of Fossil rallied, gaining more than 30% in early trading hours. The stock ended the day 31.49% higher at $91.77 on above average volume of 6.93 million.
Earlier in May, shares of Fossil lost nearly half of its value, falling to $78.52 from $136.97, as the company cut its full year earnings forecast due to weak demand from the European market.
With shares getting hammered and outlook gloomy, investors on Tuesday were extremely nervous about fiscal second-quarter results. However, the anxiousness turned into euphoria when company beat analystsâ€™ full year earnings forecast.
While analystsâ€™ were expecting full-year earnings at $5.28 a share, Fossilâ€™s revised earnings projection stands between the range of $5.29 and $5.34 a shares. Fossilâ€™s initial full-year earnings forecast was between the range of $5.30 and $5.40 a share.
The company attributed strong growth in revenue from overseas market for its improved earnings estimations.
The Company for the fiscal third quarter is expecting earnings in the range of $1.15 to $1.17 a share on an estimated 11% increase in revenue.
According to Scott Krasik, an equity analyst at BB&T Capital Markets, Fossil is likely to succeed in regaining investorsâ€™ confidence as revenue from international market and its healthy interest in Watches will boost its both top line and bottom line growth.
While speaking to Forbes, Krasik said that Fossil continues to be a growth story even as he rated the stock in â€śbuyâ€ť category.
Revenue for the period soared 14% to $636.1mn, beating analystsâ€™ forecast of $635.9mn. Among Fossilâ€™s business segment, sales of watches jumped 17%, while sales of leather goods rose 8%. Fossilâ€™s acquisition of watch maker Skagen Designs paid rich dividends as its sales was lifted by $25.2mn.
Geographically, sales in North American region rose by 18.2% to $38.7mn for the period, while sales in Asia climbed 27.2% to $18.6mn.