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Why Should You Dump Fossil Group (FOSL) from Your Portfolio?
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If you still have shares of Fossil Group, Inc. (FOSL - Free Report) in your portfolio, it is time you dump them as chances of favorable returns in the near term are bleak. This is because the stock registered a negative return of 59.6% in the last one year wider than the Zacks categorized Retail-Apparel/Shoe industry’s decline of 26.3%. Let’s delve deeper and find out what is taking this Zacks Rank #5 (Strong Sell) company down.
.Why Fossil Should be Avoided
Analysts have become increasingly bearish on the stock over the past couple of months with estimates moving south. With no upward revision in the last 60 days, the Zacks Consensus Estimate for current quarter declined from earnings of 10 cents per share to a loss of 21 cents. Similarly for 2017, the Zacks Consensus Estimate declined from $1.94 per share to $1.06 in the said time frame.
Despite posting better-than-expected earnings in fourth-quarter fiscal 2016, revenues lagged the consensus. Moreover, both the figures declined year over year due to currency headwinds, sluggish U.S. comps, a decline in the company's multi-brand licensed watch portfolio and challenging environment for the traditional watch category.
In the U.S., the company is witnessing sluggish comps since the past few quarters due to weak traffic. Poor footfall in the stores has been impacting the business, especially at its full price stores owing to a tough retail environment. Internationally too, Fossil is facing economic challenges in many of the key markets, including China, Europe, Russia and Greece.
Though Fossil’s connected wearables and smartwatches are expected to gain momentum, the Watches category is likely to remain sluggish due to general weakness therein. A challenging and a disruptive environment are also pulling back profits.
Of late, Fossil has been witnessing general weakness in the watches category. The company noticed that tech-enabled watches have been significantly affecting traditional watch sales. Increased competition from new entrants in the market and volatility in sales pattern is also affecting the segment. The company continues to expect weakness in this category.
Further, the sales of leathers have persistently been weak as customer response to the assortment continues to put pressure on results. Higher promotional activity, primarily in the outlet stores and higher mix of lower-margin products along with unfavorable currency are also keeping margins under pressure.
Fossil Group, Inc. Price, Consensus and EPS Surprise
Investors interested in the broader retail space may consider Foot Locker, Inc. (FL - Free Report) , Kate Spade & Company and The Children's Place, Inc. (PLCE - Free Report) . While Children’s Place sports a Zacks Rank #1 (Strong Buy) and has long-term earnings growth of 8.00%, Foot Locker and Kate Spade carrying a Zacks Rank #2 (Buy), has growth rates of 9.71% and 28.25%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
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In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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Why Should You Dump Fossil Group (FOSL) from Your Portfolio?
If you still have shares of Fossil Group, Inc. (FOSL - Free Report) in your portfolio, it is time you dump them as chances of favorable returns in the near term are bleak. This is because the stock registered a negative return of 59.6% in the last one year wider than the Zacks categorized Retail-Apparel/Shoe industry’s decline of 26.3%. Let’s delve deeper and find out what is taking this Zacks Rank #5 (Strong Sell) company down.
.Why Fossil Should be Avoided
Analysts have become increasingly bearish on the stock over the past couple of months with estimates moving south. With no upward revision in the last 60 days, the Zacks Consensus Estimate for current quarter declined from earnings of 10 cents per share to a loss of 21 cents. Similarly for 2017, the Zacks Consensus Estimate declined from $1.94 per share to $1.06 in the said time frame.
Despite posting better-than-expected earnings in fourth-quarter fiscal 2016, revenues lagged the consensus. Moreover, both the figures declined year over year due to currency headwinds, sluggish U.S. comps, a decline in the company's multi-brand licensed watch portfolio and challenging environment for the traditional watch category.
In the U.S., the company is witnessing sluggish comps since the past few quarters due to weak traffic. Poor footfall in the stores has been impacting the business, especially at its full price stores owing to a tough retail environment. Internationally too, Fossil is facing economic challenges in many of the key markets, including China, Europe, Russia and Greece.
Though Fossil’s connected wearables and smartwatches are expected to gain momentum, the Watches category is likely to remain sluggish due to general weakness therein. A challenging and a disruptive environment are also pulling back profits.
Of late, Fossil has been witnessing general weakness in the watches category. The company noticed that tech-enabled watches have been significantly affecting traditional watch sales. Increased competition from new entrants in the market and volatility in sales pattern is also affecting the segment. The company continues to expect weakness in this category.
Further, the sales of leathers have persistently been weak as customer response to the assortment continues to put pressure on results. Higher promotional activity, primarily in the outlet stores and higher mix of lower-margin products along with unfavorable currency are also keeping margins under pressure.
Fossil Group, Inc. Price, Consensus and EPS Surprise
Fossil Group, Inc. Price, Consensus and EPS Surprise | Fossil Group, Inc. Quote
Stocks to Consider
Investors interested in the broader retail space may consider Foot Locker, Inc. (FL - Free Report) , Kate Spade & Company and The Children's Place, Inc. (PLCE - Free Report) . While Children’s Place sports a Zacks Rank #1 (Strong Buy) and has long-term earnings growth of 8.00%, Foot Locker and Kate Spade carrying a Zacks Rank #2 (Buy), has growth rates of 9.71% and 28.25%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>