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ovenerio
Omar Venerio
Articles (1385) 

Stocks Sink Waiting for Fed's Statement

Fossil posts earnings beat, revenue miss

U.S. stocks retreated on Thursday morning ahead of Federal Reserve November policy statement. The Dow Jones Industrial Average fell 0.09% to 26,150, the S&P 500 index lost 0.34% to 2,804 and the Nasdaq Composite Index slid 0.50% to 7,533.

Shares of Fossil Group Inc. (NASDAQ:FOSL) fell more than 7% on Thursday morning before reversing and trading higher. The company posted third-quarter earnings of 19 cents per share on $608.8 million in revenue, reflecting a 11.6% year-over-year decline. The company beat earnings estimates by 29 cents, but fell $7.5 million short of revenue expectations.

“Our third quarter operating performance reflects the ongoing success of our current strategy during a transformational period for our category and for Fossil Group," Chairman and CEO Kosta Kartsotis said. "We are highly focused on initiatives that improve our overall profitability and establish a foundation for sustainable growth.”

The gross margin rose 720 basis points to 53.6% due to an inventory evaluation, lower promotional activity and markdowns and favorable product mix. Operating income was $22.6 million, an improvement from an operating loss of $0.5 million in the third quarter of fiscal 2017.

For the full year, the company expects net sales to decline 9% to 7% and a gross margin between 52% and 53%. For the fourth quarter, the company projects net sales to decline 16% to 10% and a gross margin in the range of 51.5% to 53.5%.

Gainers

Losers

Global markets

In Europe, the U.K.'s FTSE 100 rose 0.33%, France's CAC 40 fell 0.13%, Germany's Dax dipped 0.45% and Spain's IBEX 35 advanced 0.099%.

In Asia, Japan's Nikkei 225 gained 1.82%, India’s BSE Sensex jumped 0.70%, Hong Kong's Hang Seng rose 0.31% and China's Shanghai Composite slipped 0.22%.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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