The accessory maker amends its credit facility to secure more flexibility during the coronavirus outbreak
What happened
Evan is a Senior Technology Analyst at The Motley Fool. He was previously a Senior Trading Specialist at Charles Schwab, and worked briefly at Tesla. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.
So what
Shares of Fossil ( NASDAQ:FOSL) have skyrocketed today, up by 26% as of 11:30 a.m. EDT, after the company disclosed on Friday evening after the close that it had amended its credit facility. The amendments should give the accessory maker more flexibility as it copes with the COVID-19 pandemic that has crushed many retailers.
Now what
Fossil's lenders have agreed to waive quarterly tests for the company's maximum total leverage ratio for fiscal 2020 as well as the first three quarters of fiscal 2021. However, the debt covenants will still require Fossil to maintain specified minimum levels of EBITDA.
What happened
On the earnings call last week, COO and CFO Jeff Boyer noted that the changes were incoming.
So what
Shares of watch company Fossil (NASDAQ: FOSL) increased as much as 13.6% on Friday. The stock is up 13.2% at the time of this writing. The stock's rise comes after shares fell on Wednesday in the aftermath of the company's third-quarter earnings release.
Now what
As of the end of October, Fossil Group short interest was nearly double where it was toward the end of last year. After a 75% decline in its stock price year to date, investors shorting the stock are likely pleased with their gains and ready to cover their positions.
The watchmaker had some good news in an otherwise dour earnings report
Fossil's difficult market environment is likely to persist. It would be naive to overlook the enormous success Apple is seeing with its Apple Watch -- just ahead of the holiday season -- and fail to consider how this can impact Fossil.
What happened
Rich has been a Fool since 1998 and writing for the site since 2004. After 20 years of patrolling the mean streets of suburbia, he hung up his badge and gun to take up a pen full time.
So what
Shares of Fossil Group ( NASDAQ:FOSL) are up over 10% in midday trading Thursday, after the watchmaker reported second-quarter earnings that easily beat Wall Street's expectations.
Now what
Because retail stores closed down due to the coronavirus pandemic, no one was expecting Fossil to report good news. It reported worldwide net sales fell 48% to $259 million, generating a net loss of $22.5 million, or $0.44 per share.
The watchmaker sees a rough road ahead
With the watchmaker doing better than expected, and its stores reopening worldwide, the worst has likely passed the company. However, it does expect sales in the third quarter to drop between 35% and 45% from the year-ago period, though it is not providing a full-year outlook yet.
What happened
Joe honed his investing skills as an analyst for Stock Advisor, Supernova, and Fool One. He battle-tested his investment philosophy and strategies as portfolio manager of Tier 1, a market-crushing Motley Fool real-money portfolio that delivered 24.58% annualized returns during its existence.
So what
Shares of Fossil Group ( NASDAQ:FOSL) plummeted more than 20% on Wednesday, following the release of the watchmaker's fourth-quarter results and guidance.
Now what
Net sales fell 10% year over year, to $712 million, as declines in its Americas and Europe segments more than offset growth in its Asia division. This sales shortfall, combined with inventory writedowns, resulted in a net loss of $6.9 million, or $0.14 per share.
Shares of the watchmaker fell on comments about the watch market from rival Capri Holdings
Kartsotis is hoping that cost cuts and a renewed focus on smartwatches will help to stabilize its traditional retail business. But Fossil must now contend with a new challenge: potential supply chain and sales disruptions related to the coronavirus outbreak.
What happened
Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market. Follow @tmfbowman
So what
Shares of Fossil Group ( NASDAQ:FOSL) were heading lower today after rival Capri Holdings ( NYSE:CPRI), the parent of fashion brands Michael Kors, Jimmy Choo, and Versace, noted weakness in the watch market. That pressured shares of Fossil as watches make up the fashion brand's core business. The stock was down 10% as of 3 p.m. EST on Wednesday.
Now what
Though Capri Holdings shares jumped on a strong earnings report, its CEO John Idol highlighted challenges in the watch market on the earnings call, saying, "The overall watch category was more challenged than we anticipated in the quarter." Idol added, "The fashion-watch category continues to see declines globally, and we are being impacted by this secular trend.".
What happened
Fossil shares have collapsed over the last several years due to concerns about declining sales and the future of the watch market, but the stock spiked a year ago when the company showed signs of life. Fossil sits at the intersection of two struggling industries -- watches and brick-and-mortar retail -- and is clearly vulnerable.
So what
Shares of Fossil Group Inc. (NASDAQ: FOSL) fell 13.3% on Wednesday, after the the fashion and lifestyle accessories specialist received less favorable terms in refinancing its term loan.
Now what
For perspective, shares of Fossil plunged 70% last year as the company struggled to stem falling sales, incurring big losses with each passing quarter in the process. But given its massive decline, the stock had also rebounded in recent weeks amid speculation that Fossil could be a takeover target.
