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Fossil, Inc. Reports Record Fourth Quarter And Fiscal Year 2012 Results

Stocks in this article: FOSL

Fourth Quarter Net Sales Increase 14% to a Record $948 Million

Fourth Quarter EPS Increases 34% to a Record $2.51; Adjusted EPS Reaches $2.27

Provides First Quarter and Fiscal 2013 Guidance

RICHARDSON, Texas, Feb. 12, 2013 (GLOBE NEWSWIRE) -- Fossil, Inc. (Nasdaq:FOSL) (the "Company") today reported its financial results for the fourth quarter and fiscal year ended December 29, 2012.

Fourth Quarter Operating Highlights

  • Net sales grew in all segments, compared to the prior fiscal year period:
  • North America wholesale sales increased 15%
  • Europe wholesale sales increased 4%
  • Asia wholesale sales increased 19%
  • Direct to consumer sales increased 20%
  • Global retail comps increased 2.4%, the 19 th consecutive quarter of positive comps
  • Operating income increased 17% and operating margin expanded 60 basis points to 21.6%

Full Fiscal Year 2012 Operating Highlights

  • Net sales increased in all segments compared to the prior fiscal year
  • Global retail comps increased 3.1%
  • Operating income grew 4% and operating margin declined 130 basis points to 17.1%
  • Invested $261 million to repurchase 3.0 million shares of Fossil common stock
  • EPS increased 21%, reaching a record of $5.59

The Company reported record net earnings of $151.1 million for the fourth quarter of fiscal 2012, a 28% increase compared to $117.9 million for the fourth quarter of fiscal 2011. Diluted earnings per share increased 34% to $2.51, also a record, compared to $1.87 for the prior fiscal year fourth quarter.

"We are pleased to report strong fourth quarter sales and earnings, concluding another record year of growth and significant progress toward our long-term goals," stated Kosta Kartsotis, Chief Executive Officer. "During the quarter, we grew sales in each of our major geographies and improved the overall profitability of our business, validating the strength of our business model and driven by our compelling portfolio of brands. Globally, consumers recognize Fossil for design innovation, and that drove our 19th consecutive quarter of comparable store sales increases. The year was equally strong, with Asia delivering our highest growth rate, as we continue to focus our resources on the long-term potential of this region. We achieved our third consecutive year of double-digit watch sales growth, successfully integrated and positioned our newly-acquired SKAGEN ® brand for long term growth and added key management talent to our global team. We managed our resources tightly and once again generated strong cash flows, allowing us to continue to invest substantial capital in our share repurchase program."

"Last year's accomplishments position us well for the future," continued Mr. Kartsotis. "Our global distribution and supply chain, our design and management talent and our dynamic portfolio of brands afford us a significant competitive advantage. We see many markets around the world with compelling prospects to leverage that advantage and gain market share. We remain positioned to capitalize on our opportunities and deliver sustained and consistent growth, as we grow our watch business and our FOSSIL ® and SKAGEN lifestyle brands around the world. We will continue to invest in our infrastructure and build a world-class management team, dedicated to enhancing productivity and profitability. Above all, our goal is to build a diversified, scalable and predictable business model that generates solid cash flows and delivers outstanding returns for our shareholders."

Operating Results

The translation impact of a stronger U.S. dollar decreased the Company's reported net sales by approximately $5.8 million and $56.7 million during the fourth quarter and full fiscal year, respectively. The following discussion of the Company's net sales is based on constant dollar performance.  

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