Fossil, Inc.

Fossil, Inc. (FOSL - Analyst Report) just gapped higher into a new all-time high after reporting strong Q1 results that included a 30% earnings surprise. With an industry rank of #2 out of 265 and bullish growth projection, this Zacks #1 rank stock is a momentum powerhouse.

Company Description

Fossil, Inc. designs, sells and licenses fashion accessories like watches, wallets and jewelry worldwide. The company was founded in 1984 and has a market cap of $6.5 billion.

We just got an update on Fossils business with strong Q1 results that came in well ahead of expectations.

First-Quarter Results

Revenue for the period was up 37% from last year to $537 million. Earnings also looked good, coming in at 86 cents, 30% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 54% over the last four quarters.

The good quarter was led by an impressive showing in watch sales, jumping 44% from last year to $113 million.

The company also showcased strong geographic diversity, with both North American and Europe wholesale shipments up 34% from last year.

Gross margin was also on the upswing, up 40 basis point from last year to 56.2% of sales.

Financial Profile

Going into Q2, Fossil's killer balance sheet is well in tact, with cash and short-term investments of $355 million against just $5 million in total debt.

Estimates

We saw some pretty nice movement in estimates off the good quarter, with the current year adding 23 cents to $4.61 while the next-year estimate gained 40 cents to $5.52, a bullish 20% growth projection.

Valuation

In light of recent gains, FOSL does look a big pricey, trading with a forward P/E of 23X, a premium to its peer average of 15X.

12-Month Chart

On the chart, FOSL jumped into a new all-time high on the good quarter. Take a look at the big gains below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.

Read the full analyst report on FOSL