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Fossil ( FOSL), the luxury watch, handbag, footwear and apparel retailer, took one of the biggest one-day hits to its stock price in many years when the company reported its first-quarter results earlier this month. The company had reported better bottom-line results but disappointed on the top line. Then the company lowered full-year guidance by 10 cents. That is just 2% of a reduction to guidance. Still, second-quarter sales are expected to rise 16% in total and 19% in constant dollars.

As a result, the stock got pummeled. Of course, there were negatives. Sales missed targets for the period. Jewelry and eyewear product lines experienced sales declines. European sales are expected to be weak due to the economic problems over there. The strong U.S. dollar is impacting sales by about 3%.

Once you dig deeper, you see that all is not so bad. Asian and direct-to-consumer sales are screaming. Wholesale sales rose 9.3% in North America, 18.8% in Asia, 4.7% in Europe, and 18.7% for direct-to-consumer on a constant currency basis and when adjusted for foreign exchange rate variations, sales grew by 8.8%, 19.5%, 0.7% and 18.1%, respectively. The company is getting rid of underperforming stores and products lines. The integration of the Skagen Designs acquisition and related transactions costs will be a one-time 7-cent drag on earnings in the second quarter.

Fossil remains a premier brand and did not deserve a selloff of the magnitude that it received as the growth story is well intact. The stock now stands at about 48% below its all-time high set in April.

As of the most recently reported quarter, Fossil was one of Lone Pine Capital's top holdings. It was also featured recently in " 8 Stocks Spiking on Unusual Volume."

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