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Fossil explodes higher by 80% after blockbuster earnings (FOSL)

Fossil reported better-than-expected fourth-quarter earnings, indicating the company has made some progress in wearables, according to a Wall Street analyst.

  • Shares of
  • The company reported an adjusted $0.64 earnings per share, and revenue of $929.8 million, beating Wall Street estimates.
  • Wall Street analysts were impressed by Fossil's sales in wearables.
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Fossil shares skyrocketed as much as 80% after the company reported fourth-quarter earnings that beat Wall Street expectations.

The fashion designer reported adjusted earnings of $0.64 per share on revenue of $929.8 million, soaring past Wall Street's expectations of $0.38 per share and $889.7 million.

A Wall Street analyst said the company's progress in wearables, and its intention to "transform into a smaller, more profitable company" has helped send its shares higher. However, he warned the wearables market is very competitive, making it a tough road ahead for Fossil.

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"Progress is starting to show in the numbers, but the crowded wearables landscape and weak wholesale traction make us question FOSL's ability to grab top share [long term]," wrote Randal Konik of Jefferies, in a note.

Sales of wearables grew 40% year-over-year during the quarter. For 2017, sales of wearables nearly doubled to over $300 million, or 14% of total watch sales, the company reported.

Fossil also enjoyed some success in its digital channels, seeing a 31% increase in ecommerce sales.

Konik raised his price target to $16 per share from $6.

Fossil's stock was up 83.82% for the year.

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