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Fossil (FOSL) Q3 Earnings: A Beat in the Cards this Time?
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We expect Fossil Group Inc. (FOSL - Free Report) to beat expectations when it reports third-quarter 2016 results after the market closes on Nov 3.
Last quarter, this global consumer fashion accessories maker and distributor posted a positive surprise of 33.33%. In fact, the company has delivered positive surprises in the past four quarters, with an average surprise of 29.10%.
Let’s see how things are shaping up prior to the announcement.
Our proven model shows that Fossil is likely to beat earnings this quarter because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +3.33%. This is a meaningful and leading indicator of a likely positive earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Fossil carries a Zacks Rank #2 (Buy), which when combined with +3.33% ESP makes us confident about an earnings beat.
Note that stocks with a Zacks Rank #1 (Strong Buy), #2 or #3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 or #5) should never be considered going into an earnings announcement.
What is Driving the Better-Than-Expected Earnings?
Product innovation and continued momentum at the Fossil brand have been driving the company’s growth. Fossil’s foray and continued expansion into wearable technology allows it to bring smartwatches to its customers, shaping the fusion of fashion and technology. Despite competition from traditional watchmakers and soft watch sales of late, connected wearables and smartwatches are expected to bring a unique branded experience to customers, thereby aiding a turnaround in Fossil’s results.
For the third quarter of 2016, Fossil expects the bottom line to be in the range of 15−40 cents per share. This will include 20 cents per share of currency impact and 9 cents of charges related to the Misfit acquisition. The company expects net sales to decline in a range of 2%−6% due to currency headwinds of 110 basis points (bps). It expects operating margin in a range of 2.5%−4.5% for the third quarter, which includes 100 bps negative impact from currency and 80 bps from Misfit acquisition expenses.
Other Stocks to Consider
Stocks in the broader consumer discretionary sector that have both a positive Earnings ESP and a favorable Zacks Rank are:
Nike Inc. (NKE - Free Report) , with an Earnings ESP of +2.33% and a Zacks Rank #3.
Time Warner, Inc. , with an Earnings ESP of +0.74% and a Zacks Rank #3.
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Fossil (FOSL) Q3 Earnings: A Beat in the Cards this Time?
We expect Fossil Group Inc. (FOSL - Free Report) to beat expectations when it reports third-quarter 2016 results after the market closes on Nov 3.
Last quarter, this global consumer fashion accessories maker and distributor posted a positive surprise of 33.33%. In fact, the company has delivered positive surprises in the past four quarters, with an average surprise of 29.10%.
Let’s see how things are shaping up prior to the announcement.
FOSSIL GRP INC Price, Consensus and EPS Surprise
FOSSIL GRP INC Price, Consensus and EPS Surprise | FOSSIL GRP INC Quote
Why a Likely Positive Surprise?
Our proven model shows that Fossil is likely to beat earnings this quarter because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +3.33%. This is a meaningful and leading indicator of a likely positive earnings surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Fossil carries a Zacks Rank #2 (Buy), which when combined with +3.33% ESP makes us confident about an earnings beat.
Note that stocks with a Zacks Rank #1 (Strong Buy), #2 or #3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 or #5) should never be considered going into an earnings announcement.
What is Driving the Better-Than-Expected Earnings?
Product innovation and continued momentum at the Fossil brand have been driving the company’s growth. Fossil’s foray and continued expansion into wearable technology allows it to bring smartwatches to its customers, shaping the fusion of fashion and technology. Despite competition from traditional watchmakers and soft watch sales of late, connected wearables and smartwatches are expected to bring a unique branded experience to customers, thereby aiding a turnaround in Fossil’s results.
For the third quarter of 2016, Fossil expects the bottom line to be in the range of 15−40 cents per share. This will include 20 cents per share of currency impact and 9 cents of charges related to the Misfit acquisition. The company expects net sales to decline in a range of 2%−6% due to currency headwinds of 110 basis points (bps). It expects operating margin in a range of 2.5%−4.5% for the third quarter, which includes 100 bps negative impact from currency and 80 bps from Misfit acquisition expenses.
Other Stocks to Consider
Stocks in the broader consumer discretionary sector that have both a positive Earnings ESP and a favorable Zacks Rank are:
Michael Kors Holdings Limited , with an Earnings ESP of +1.14% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nike Inc. (NKE - Free Report) , with an Earnings ESP of +2.33% and a Zacks Rank #3.
Time Warner, Inc. , with an Earnings ESP of +0.74% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>