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4-Traders Homepage  >  Equities  >  Nasdaq  >  Fossil Group Inc    FOSL

FOSSIL GROUP INC (FOSL)
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Delayed Quote. Delayed  - 02/23 10:00:00 pm
13.68 USD   +2.55%
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Fossil comes alive as stock jumps 79 percent on short squeeze

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02/14/2018 | 10:13am EST
FILE PHOTO -  A Fossil store logo is pictured on a building along the Lincoln Road Mall in Miami Beach

(Reuters) - Fossil Group Inc's (>> Fossil Group Inc) shares soared 79 percent in early trading on Wednesday as short sellers rushed to cover their positions, a day after the watchmaker posted a better-than-expected increase in sales in the holiday quarter.

(Reuters) - Fossil Group Inc's (>> Fossil Group Inc) shares soared 79 percent in early trading on Wednesday as short sellers rushed to cover their positions, a day after the watchmaker posted a better-than-expected increase in sales in the holiday quarter.

Fossil, struggling with declining sales in Europe and several other operational problems, is heavily shorted - an indication that market players bet that it would report disappointing results.

Nearly 40 percent of its outstanding shares were shorted as of Jan. 31, according to Thomson Reuters data, making it currently the third-most shorted stock on the S&P 600 consumer discretionary sector <.SPSMCD>.

"The better than expected fourth quarter earnings performance can improve confidence in the company's financial outlook," Telsey Advisory Group analyst Dana Telsey said in a note.

"However, we continue to see visibility to ultimate topline and profitability potential as difficult," Telsey said, adding that she expected a significant shortcovering fueled rally on Wednesday.

She more than doubled her price target on the stock to $15.

Fossil Group shares rose to $16.18 and on track to move to their highest since May 9, 2017. The stock has lost 61 percent over the past year, excluding gains on Wednesday.

If gains hold, Fossil Group is on track to gain over $350 million market capitalization.

While there were bright spots in the quarter - tighter cost control and a 31 percent surge in e-commerce sales - nothing had fundamentally changed for the company, analysts said.

"The company is seeing no stabilization of the traditional watch category," Wells Fargo analyst Ike Boruchow said. "This simply isn't a fundamentally sound business right now."

Boruchow, however, raised his price target by $4 to $8, citing a two percent gain in same-store sales, helped by higher demand in the Americas and Europe - the company's biggest contributors to sales.

The company said on Tuesday that it had introduced a number of new models before the holiday quarter, which fueled a double-digit increase in Armani watch sales.

But Fossil, which also sells watches for brands such as DKNY and Skagen, discounted slow-moving items in the December quarter, a sign that it was struggling to compete with a certain section of the wearables market dominated by Apple Inc (>> Apple), Samsung Electronics Co Ltd (>> Samsung Electronics Co Ltd) and Garmin Ltd (>> Garmin).

Five out of 10 brokerages covering the stock rate it a "hold", while only one rates it a "buy". The remaining rate the stock a "sell" or lower.

(This version of the story corrects ticker symbol to FOSL.O from FOSL.N in first paragraph.)

(Reporting by Karina Dsouza and Shreyashi Sanyal in Bengaluru; Editing by Sayantani Ghosh)

By Karina Dsouza

Stocks treated in this article : Apple, Garmin, Samsung Electronics Co Ltd, Fossil Group Inc
Stocks mentioned in the article
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APPLE 1.74% 175.5 Delayed Quote.1.93%
GARMIN -0.07% 60.35 Delayed Quote.1.38%
SAMSUNG ELECTRONICS CO LTD --End-of-day quote.
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Financials ($)
Sales 2018 2 574 M
EBIT 2018 79,9 M
Net income 2018 -28,6 M
Debt 2018 256 M
Yield 2018 -
P/E ratio 2018 -
P/E ratio 2019 42,78
EV / Sales 2018 0,36x
EV / Sales 2019 0,35x
Capitalization 671 M
Chart FOSSIL GROUP INC
Duration : Period :
Fossil Group Inc Technical Analysis Chart | FOSL | US34988V1061 | 4-Traders
Technical analysis trends FOSSIL GROUP INC
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 10
Average target price 12,4 $
Spread / Average Target -11%
EPS Revisions
Managers
NameTitle
Kosta N. Kartsotis Chairman & Chief Executive Officer
John A. White Chief Operating Officer & Executive Vice President
Jeffrey N. Boyer Chief Financial Officer, Treasurer & EVP
Mark D. Quick Director
James M. Zimmerman Lead Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
FOSSIL GROUP INC71.69%671
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HERMÈS INTERNATIONAL0.12%57 509
COMPAGNIE FINANCIÈRE RICHEMONT-4.46%46 952
HENNES & MAURITZ-18.10%24 806
THE SWATCH GROUP2.39%24 010