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What: Shares of fashion accessories maker Fossil (NAS: FOSL) sank 11% today after its quarterly results and guidance missed Wall Street expectations.
So what: Fossil's third-quarter profit actually thumped estimates, but a wide miss on the top line -- $684.2 million versus the consensus of $713.1 million -- coupled with downbeat guidance for the current quarter reinforces concerns over slowing growth going forward. While Fossil experienced solid double-digit growth in Asia, the weak economy in Europe and a stronger U.S. dollar continue to offset those gains.
Now what: Management now sees fourth-quarter EPS of $2.26 to $2.29 on revenue of roughly $930.5 million, versus Wall Street's estimate of $2.28 and $959.4 million, respectively. "[W]e made excellent progress toward our long-term expansion goals in support of a much larger business in Asia and capitalizing on the power of our multi-brand watch portfolio," CFO Mike Kovar reassured investors. With the stock now off about 40% from its 52-week highs and trading at a forward P/E of 13, buying into that turnaround talk seems like a rather inexpensive move.
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The article Why Fossil Shares Plunged originally appeared on Fool.com.Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Fossil. Motley Fool newsletter services recommend Fossil. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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