Fossil first quarter beats Street, raises 2010 earnings view
May 11 (Reuters) - Fossil Inc's (FOSL.O) first-quarter results soared past market expectations, boosted by strength at its wholesale business in North America and Asia, and the watchmaker raised its 2010 earnings view, sending its shares up 6 percent in pre-market trade.
The Richardson, Texas-based company raised its full-year earnings view to between $2.55 and $2.65 a share, up from its earlier forecast of $2.25 to $2.35 a share.
It also expects 2010 sales to rise 14 percent to 16 percent.
Analysts on average were expecting 2010 earnings of $2.34, on revenue of $1.69 billion, according to Thomson Reuters I/B/E/S.
Fossil also forecast second-quarter earnings of 32 cents to 34 cents a share, above analysts' estimates of 29 cents a share. The company sees sales in quarter rising 20 percent to 22 percent.
The watchmaker also expects sales from its direct-to-consumer segment to increase as a percentage of the total sales mix, and boost profit in the fourth quarter.
STRONG WATCH SALES
Overall watch sales at Fossil jumped 50 percent during the first quarter, as the company saw sales volume growth across all of its major brands.
The strongest performers in the category were its Michael Kors, Fossil and Michele brands.
An uptick in consumer discretionary spending on watches also helped Fossil capture more market share in the United States watch business during the quarter. The company, which also sells jewelry, leather goods, belts, sunglasses and apparel, posted net income of $35.9 million, or 53 cents a share, up from $17.3 million, or 26 cents a share, a year earlier. Net sales at the company, which competes with Movado Group Inc (MOV.N), soared 22 percent to $393.2 million.
Analysts on average were looking for earnings of 32 cents a share, on revenue of $362.7 million.
Fossil's net sales in the wholesale segment rose 30 percent in North America, and 11 percent in the Asia-Pacific region on a constant dollar basis.
Shares of the company, which have risen 76 percent in value over the last year, were up at $40.00 in pre-market trade Tuesday 11 May. They closed at $37.86 Monday 10 May on Nasdaq. (Reporting by Shradhha Sharma in Bangalore; Editing by Anne Pallivathuckal)
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