Shares of Fossil Group skyrocketed Wednesday, after the company reported earnings in addition to also sales which topped analysts’ estimates because of a surprise jump in demand for wearables.
The stock rallied more than 0 percent by Wednesday afternoon, almost doubling in cost in addition to also trading around $17.50.
Same-store sales climbed 2 percent inside the fourth quarter, Fossil said Tuesday, as the company rolled out brand new hybrid in addition to also display smartwatches across 14 brands. E-commerce sales were up 31 percent during the period.
Sales of wearable devices nearly doubled last year to over $300 million, in addition to also the category today accounts for 14 percent of Fossil’s overall watch revenue. Similar to the Apple Watch in addition to also Fitbit devices, Fossil aims to sell more smart products which monitor heart rates in addition to also track steps.
“With wearable launches ahead of holiday, we significantly much better the trajectory for Michael Kors watches in addition to also drove a double digit increase in fourth quarter Armani watch sales,” CEO Kosta Kartsotis said in a statement.
“Our priorities are focused on delivering innovative wearable in addition to also traditional watch styles while improving performance inside the handbag in addition to also jewelry categories in addition to also driving increases in digital sales,” Kartsotis added about initiatives in fiscal 2018.
Total sales globally fell 4 percent to $921 million during the fourth quarter, nevertheless analysts surveyed by Thomson Reuters were expecting revenue of $890 million.
The company reported a net loss of $80 million, or $1.65 a share, compared with net income of $50 million, or $1.03 per share, a year earlier Excluding one-time items (a charge related to brand new tax legislation inside the U.S.), Fossil earned 64 cents a share, while analysts were calling for 40 cents.
“The company finally was able to deliver some Great news,” Wells Fargo analyst Ike Boruchow said in a note to clients, “with plans to recognize meaningful cost savings in addition to also significant [gross margin] expansion.”
However, he cautioned which the company is actually “seeing no stabilization of the traditional watch category,” which has always been at Fossil’s core. “We would likely still contend which the fundamental story here remains extremely challenged.”
Including Wednesday’s gains, Fossil shares have fallen about 22 percent coming from a year ago.