Fossil issues Q4 earnings warning, introduces fiscal '06 guidance

03 Feb '06

3 min read

“On a positive note, expenses are expected to increase generally in line with our sales increase for the quarter. From an inventory perspective, although we believe gross profit margins could be negatively impacted as we return to more healthy stock levels, the sales dollars generated on the reduction of our excess stock would be incremental to the sales guidance we are outlining for 2006 and are not expected to negatively impact 2006 diluted earnings per share estimates."

"During 2006, we have a number of initiatives that will add to the already strong accessories growth we experienced during 2005," Kovar continued.

"New businesses such as the worldwide rollout of adidas(R) watches, Marc by Marc Jacobs(R) watches and the introduction of Michele(R) and Diesel(R) jewelry should make solid contributions during 2006 and beyond,” he added.

The company is introducing sales and earnings guidance for the full fiscal 2006 year and the first quarter of fiscal 2006. For the 2006 fiscal year, it currently expects net sales to rise by approximately 9 percent. Sales for the first half of fiscal 2006 are expected to increase around 7 percent with second half sales rising approximately 10 percent.

Fossil Inc is a design, development, marketing and distribution company that specializes in consumer products predicated on fashion and value. Its principal offerings include an extensive lineof fashion watches sold under the company's proprietary and licensed brands.

The company also offers complementary lines of small leather goods, belts, handbags, sunglasses, jewelry and apparel.

Fossil Inc

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