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How Did Fossil Group Perform in 3Q16?

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Price movement

Fossil Group (FOSL) has a market cap of $1.3 billion. It rose 3.5% to close at $25.58 per share on November 4, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -3.4%, -11.9%, and -30.0%, respectively, on the same day.

FOSL is trading 8.4% below its 20-day moving average, 9.1% below its 50-day moving average, and 23.9% below its 200-day moving average.

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Related ETF and peers

The Schwab US Mid-Cap ETF (SCHM) invests 0.05% of its holdings in Fossil Group. The ETF tracks a market cap–weighted index of midcap stocks in the D0w Jones US Total Stock Market Index. The YTD price movement of SCHM was 3.8% on November 4.

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

  • Coach (COH) — $10.0 billion
  • Kate Spade (KATE) — $2.0 billion
  • Guess (GES) — $1.2 billion

Performance of Fossil Group in fiscal 3Q16

Fossil Group (FOSL) reported fiscal 3Q16 net sales of $738.0 million, a fall of 4.3% compared to net sales of $771.3 million in fiscal 3Q15. Sales of the Americas and Europe business segments fell 7.7% and 6.6%, respectively, and sales of the Asia business segment rose 11.5% in fiscal 3Q16 compared to fiscal 3Q15.

The company’s gross profit margin and operating margin fell 200 basis points and 560 basis points, respectively, in fiscal 3Q16 compared to fiscal 3Q15.

Its net income and EPS (earnings per share) fell to $17.4 million and $0.36, respectively, in fiscal 3Q16 compared to $57.5 million and $1.19, respectively, in fiscal 3Q15.

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Fossil Group’s cash and cash equivalents fell 18.4%, and its inventories rose 11.9% in fiscal 3Q16 compared to fiscal 4Q15. Its current ratio rose to 3.3x, and its debt-to-equity ratio fell to 1.3x in fiscal 3Q16 compared to a current ratio and a debt-to-equity ratio of 2.9x and 1.5x, respectively, in fiscal 4Q15.

Projections

Fossil Group has made the following projections for fiscal 4Q16:

  • net sales growth: -2.0% to 4.0%
  • operating margin: 5.8%–8.5%
  • EPS: $0.69–$1.19

The company has made the following projections for fiscal 2016:

  • net sales growth: -5.0% to -3.0%
  • operating margin: 4.0%–5.0%
  • EPS: $1.30–$1.80

Now we’ll look at Monster Beverage (MNST).

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