Fossil Inc. shares lost a quarter of their value in pre-market trading yesterday as the brand released a set of Q1 results that fell below expectations.
Investors were said to also have been disappointed by the watch wholesaler’s profit forecasts for the months to come.
Fossil racked up net sales of US$589.5 million (£384.8m) in Q1, up 9.8% on the previous year’s figures. Gross profit margin decreased 40 basis points to 55.8% of net sales, compared to 56.2% of net sales in Q1 2011.
While the business enjoyed strong trading in Asia, Europe was hit by what Fossil executive vice-president Mike Kovar called “a softening macro environment toward the end of the first quarter and changes in our merchandising and assortment strategies across certain categories negatively impacted both our wholesale and retail sales in that region”.
To read a full report of Fossil’s Q1 results click here.