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Fossil Will Ship Smartwatches Based on Qualcomm Technologies

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Price movement

Fossil Group (FOSL) fell by 4.6% to close at $28.13 per share during the fifth week of August 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -4.6%, -4.8%, and -23.1%, respectively, as of September 2.

FOSL is now trading 8.1% below its 20-day moving average, 6.1% below its 50-day moving average, and 20.2% below its 200-day moving average.

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Related ETF and peers

The Schwab US Mid-Cap ETF (SCHM) invests 0.19% of its holdings in Fossil Group. The ETF tracks a market-cap-weighted index of mid-cap stocks in the D0w Jones US Total Stock Market Index. The YTD price movement of SCHM was 10.6% on September 2.

The market caps of Fossil Group’s competitors are as follows:

  • Coach (COH): $10.7 billion
  • Kate Spade (KATE): $2.5 billion
  • Guess (GES): $1.4 billion

Latest news on Fossil Group

In a press release on September 1, 2016, the company stated the following: “At IFA 2016 today, Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated (QCOM), and Fossil Group (FOSL) announced today that the Qualcomm Snapdragon™ Wear 2100 processor is powering the Fossil Q Marshal and Fossil Q Wander smartwatches. With today’s announcement, Fossil becomes the first Fossil Group brand to ship smartwatches based on Qualcomm Technologies’ next generation Snapdragon Wear 2100 processor.”

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Performance of Fossil in fiscal 2Q16

Fossil reported fiscal 2Q16 net sales of $685.4 million, which represents a fall of 7.4%, as compared to net sales of $740.0 million in fiscal 2Q15. Sales from its Americas, Europe, and Asia business segments fell by 10.6%, 5.3%, and 1.3%, respectively, in fiscal 2Q16 from fiscal 2Q15. The company’s gross profit margin and operating income fell by 6.2% and 78.0%, respectively, in fiscal 2Q16 from the prior year period.

Its net income and EPS (earnings per share) fell to $6.0 million and $0.12, respectively, in fiscal 2Q16, as compared to $54.6 million and $1.12, respectively, in fiscal 2Q15.

Fossil’s cash and cash equivalents fell by 19.9%, and its inventories rose by 5.8% in fiscal 2Q16 over fiscal 4Q15. Its current ratio rose to 3.2x, and its total long-term debt-to-equity ratio fell to 0.90x in fiscal 2Q16, as compared to a current ratio and the total long-term debt-to-equity ratio of 2.9x and 1.0x, respectively, in fiscal 4Q15.

Projections

Fossil has made the following projections for fiscal 3Q16:

  • net sales growth: -6.0% to -2.0%
  • operating margin: 2.5%–4.5%
  • EPS: $0.15–$0.40

The company has made the following projections for fiscal 2016:

  • net sales growth: -5.0% to -1.5%
  • operating margin: 5.0%–6.5%
  • EPS: $1.80–$2.65

Now we’ll discuss Newell Brands (NWL).

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