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Fossil fourth-quarter 2005 sales 'disappoint'

February 2006


Failing to reach company expectations, net sales of Fossil watches rose 2 percent (5 percent at constant exchange rates) in Fossil's fourth quarter of 2005 ended Dec. 31.

The company had predicted sales of $343 million for the quarter, but saw sales of $324 million. As a result of the shortfall, Fossil estimates its inventory at 30 to 40 percent above prior years.

“We are disappointed in not reaching our fourth-quarter and full-year financial goals,” Fossil Chief Financial Officer Mike Kovar said in a statement issued Thursday.

Kovar attributed the shortfall to a 17 percent decline in fourth-quarter sales of Fossil watches and lower-than-expected sales expansion in Europe and Asia.

However, the company remains optimistic for 2006, expecting sales to increase about 7 percent in the first half of the year and 10 percent in the second half of the year. In the release, Kovar said Fossil would experience a boon from the worldwide rollout of Adidas watches, Marc by Marc Jacobs watches and the introduction of Michele and Diesel jewelry.

Fossil is a design, development, marketing and distribution company specializing in fashion watches under proprietary and licensed brands. It also has small lines of leather goods, belts, handbags, sunglasses, jewelry and apparel. Fossil products sell in department stores and specialty stores in more than 90 countries.

Source : Nationaljeweler

www.nationaljeweler.com