RICHARDSON, United States — Fossil Group Inc. climbed as much as 60 percent in late trading after new wearable technology and e-commerce demand helped fuel a surprise sales gain in the holiday quarter.
Comparable sales — a key measure — climbed 2 percent in the fourth quarter, Fossil said on Tuesday. Analysts had projected a 6 percent decline, according to Consensus Metrix.
The results suggest Fossil is finally making headway in the market for smartwatches and other tech gear — an area dominated by Apple Inc. Its sales of wearable devices nearly doubled last year to more than $300 million and now account for 14 percent of its watch revenue. In addition to selling products under its own name, Fossil makes watches for brands like Michael Kors and Armani.
The introduction of new smartwatches and innovation in traditional styles “has us poised for stabilization and growth over time,” Fossil Chief Executive Officer Kosta Kartsotis said in a statement. “In the year ahead, we expect to be a smaller yet more profitable company that is on a solid path for the future.”
The stock climbed as high as $14.44 in extended trading. Even before the rally, it was up 16 percent this year through Tuesday’s close.
The company expects restructuring charges of about $50 million in 2018, including $20 million in the first quarter. Fossil also forecast a sales decline of 6 percent to 12 percent in the first quarter from a year earlier.
Before the results, Fossil had the highest short interest as a percentage of shares in the Russell 3000 of companies reporting earnings Tuesday, with 44.4 percent of its shares shorted by that measure, according to data compiled by Bloomberg on Monday. Short-sellers bet on a decline in the share price.
By Lindsey Rupp.