Fossil Group, Inc. (NASDAQ:FOSL) shares fell 31.67% to $34.85 on Friday morning after the company reported third quarter financial results on Thursday. Fossil Group is a global designer, marketer and distributor company that specializes in consumer lifestyle accessories. The Company's products include a line of men's and women's fashion watches and handbags, jewelry, belts, sunglasses, soft accessories, small leather goods and select apparel.
According to the third quarter financial results, net sales decrease $123.2 million from $894.5 million last year to $771.3 million, because of the translation impact from the stronger U.S. dollar. On a constant currency basis, third quarter net sales decreased 8% compared with the third quarter 2014. Net income decreased 45% to $57.5 million compared with $103.7 million of third quarter 2014. Diluted earnings per share decreased 39% to $1.19, compared to $1.96 of third quarter 2014.
Kosta Kartsotis, Chief Executive Officer, commented on the results, "While our results for the third quarter were within our expectations, we are not satisfied with our overall performance. Currency aside, our Skagen and Fossil brands performed well in a challenging environment as our initiatives in branding and innovation resonated with consumers around the world. Our branded jewelry and leathers business increased but were more than offset by a decline in our watch business, reflecting general weakness in the category."
At the same time on Thursday, Fossil Group announced the takeover of Misfit, Inc. which is an innovator in stylish connected devices and wearable technology. This acquisition will expand Fossil Group to its target market, offering consumers not only traditional timepieces but also fashionable connected accessories. Through this acquisition, Fossil Group will own a scalable cloud and application platform, a world-class hardware and software engineering team, a pipeline of innovative products and a native wearable technology brand.
"We have a significant opportunity to add technology and connectivity across our platform of watches and accessories," said Kosta Kartsotis, chief executive officer of Fossil Group. "With the acquisition of Misfit, Fossil Group will be uniquely positioned to lead the convergence of style and technology and to become the fashion gateway to the high-growth wearable technology and connected device markets."