Fossil Group Reports Fourth Quarter & Fiscal Year 2014 Results

Fossil Group, Inc reported its financial results for the fourth quarter and fiscal year ended January 3, 2015. The Company reported net income for the fourth quarter of fiscal 2014 of $154.1 million, a 4 percent increase compared to $148.5 million for the fourth quarter of fiscal 2013. Diluted earnings per share grew 12 percent to $3.00, compared to $2.68 per diluted share for the fourth quarter of fiscal 2013. The increase in diluted earnings per share was primarily attributable to operating income growth, substantially all of which was offset by currency headwinds, the benefit of a lower share base compared to last fiscal year and a non-operating gain associated with a settlement related to the 2012 Skagen acquisition.
For fiscal year 2014, the Company reported net income of $376.7 million, or $7.10 per diluted share, compared to $378.2 million or $6.56 per diluted share for fiscal 2013. The increase in diluted earnings per share was attributable to operating income growth and the benefit of a lower share base compared to last fiscal year, partially offset by currency headwinds.
Kosta Kartsotis, Chief Executive Officer, commented on the results. “We are pleased to conclude another year of solid sales and earnings per share growth for Fossil Group. The strength of our diverse business model, our team’s disciplined execution of our strategies and our strong financial position drove overall results within our expectations. We returned value to our shareholders through the continued execution of our share repurchase program, while navigating unfavorable changes in currency at the end of the year. However, we are not entirely satisfied with our fourth quarter performance and begin 2015 intensely focused on taking advantage of the many opportunities available to us to drive future growth.”
Kartsotis added, “During the year, we achieved several key objectives that we will build upon in 2015. We drove growth in our multi-brand watch portfolio, jewelry and our Fossil and Skagen lifestyle brands. We advanced many of our strategic initiatives, including the successful launch of Tory Burch and Emporio Armani Swiss, both of which support our Swiss watch initiative and highlight our capabilities in the category. We executed ten year extensions of our license agreements with Giorgio Armani and Michael Kors, reinforcing our position as the leader in fashion lifestyle watches and global production and distribution. We also established new partnerships with Google and Intel, combining our fashion and design capabilities with their expertise in technology, to advance our development of wearable technology, and we began investing in demand creation and brand building initiatives for Fossil and Skagen to position them for sustained future growth.”
Kartsotis concluded, “As we begin 2015, we believe we remain on track to continue to deliver on our long term goal of driving profitable top-line growth while investing in high return initiatives that can fuel our momentum over the long term. The addition of kate spade new york to our multi-brand portfolio, which we announced today, is yet another great example of our ability to capitalize on lifestyle brands that are poised for global expansion. Our priorities are to invest in developing our digital capabilities, advance our wearable technology initiative, drive efficiencies in our operating model, and continue to leverage our competitive advantages of world-class design, production and global distribution to grow Fossil, Skagen and our multi-brand portfolio. We remain excited about our outlook and while we recognize near-term challenges, we expect fiscal 2015 to be another year of significant accomplishments towards our overarching objective to deliver sustained growth and outstanding returns for our shareholders over the long-term.”