Watch brands drive 15.7% growth in Fossil Q1 sales

Fossil’s Q1 2013 net sales increase of 15.7% was driven by double-digit growth of its multi-brand global watch portfolio as well as the expansion of the Fossil brand.

In its financial results for the first quarter, which ended March 30, 2013, Fossil announced that its worldwide net sales rose 15.7%, or $92.8 million (£61 million), reflecting sales growth across each segment, compared to the Q1 2012 results. The report said that double-digit growth by Fossil’s watch brand portfolio had driven that growth, as had the expansion of the global Fossil brand.

In Europe, where wholesale net sales rose 13.5% or $20.5 million (£13.5 million) compared to the first quarter of Fiscal 2012, the sales growth was driven by watches. The addition of Skagen was said to have contributed $13 million (£8.6 million) to first quarter revenues. Growth in Europe was strongest in the company’s distributor markets and the UK, while Italy experienced a sales decline during the quarter.

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While the net sales from the North America wholesale segment increased 13.3%, compared to Q1 2012, it was solid growth in the watch portfolio that boosted those sales, including a $10 million (£6.6 million) contribution from the addition of Skagen.

Fossil’s net sales increased 15% to a record $681 million (£448 million) in Q1, 2013, direct to consumer sales increased 22% and operating income increased 14%. The company reported record net earnings of $72.2 million (£47.5 million) for the first quarter of fiscal 2013, compared to $58.1 million (£38.2 million) for the first quarter of fiscal 2012.

Fossil chief executive officer Kosta Kartsotis said: “We are off to an excellent start in fiscal 2013, with record first quarter results that exceeded both our top and bottom line expectations. We increased Fossil brand sales, driven by double digit watch growth and the resurgence of our retail jewellery business. Our multi-brand watch portfolio sustained its positive momentum with strong performances across several brands and we continued to develop Skagen with the introduction of a few jewellery lines in the quarter."

Kartsotis added: "We remain confident in our near and long term outlook and intently focused on our goal to build a diversified, predictable and scalable business model that generates outstanding cash flows and returns for our shareholders.”

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