Fossil Group global jewellery sales hit £30m in Q2

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Brand also enjoys double-digit sales increase among watch collections.

Fossil Group’s jewellery sales hit US$47 million (£30m) in Q2 2013, compared to US$37.8 million (£24.4m) in Q2 2012, according to the group’s financial results for the second quarter and six month period ended June 29, 2013.

Second quarter 2013 worldwide net sales at the Fossil Group rose 11.4%, or $72.4 million (£46.8 million), reflecting sales growth across each segment, compared to the previous year’s second quarter. The group’s overall sales growth was said to have been driven by double-digit sales increases in the company’s multi-brand global watch portfolio – including Michael Kors, Marc by Marc Jacobs and Diesel – as well as it jewellery collections and the general global expansion of the Fossil brand.

In total Fossil’s watch sales were up 15% to $547.2 million (£354.1 million) in Q2 2013, compared to $476.8 million (£308.4 million) in Q2 2012.

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The company’s Europe’s wholesale net sales increased 16%, or $24.9 million (£16.1 million), in comparison to the second quarter of 2012 and strong watch sales were said to have driven growth in virtually every market, with particularly strong growth in China, Japan and India.

Fossil Group also reported record net earnings of $67.7 million (£43.8 million) for the second quarter of 2013, compared to $57.3 million (£37.1 million) for the second quarter of 2012.

Fossil Group chief executive officer Kosta Kartsotis said: “We are pleased to continue our positive momentum and report record second quarter results that surpassed both our revenue and earnings expectations. During the quarter we advanced each of our core growth initiatives with strength in our Fossil and Skagen brands and double-digit sales increases in our multi-brand watch portfolio and in jewellery. We continued to leverage the power of our brands and our distribution infrastructure to expand our international footprint, fuelling robust revenue increases in both Europe and Asia.

"Our team made substantial progress on many key operational initiatives that drove significant gross margin expansion in the quarter. Our consistent positive performance continues to reflect the innovation in our watch and jewellery lines, the disciplined execution of our strategies by our team and our ability to capitalise on the inherent strength of our dynamic global operating model.”

Net sales at the group grew in all segments, compared to the prior year second quarter. Europe wholesale net sales increased 16%; North America wholesale net sales increased 4%; Asia Pacific wholesale net sales increased 14%; direct to consumer net sales increased 16% with flat global retail comps and operating income increased 21%.

Looking ahead, Kartsotis added: “At the halfway mark of the year, we remain confident in our outlook and excited about our future. We manage a diverse portfolio of world-class brands that gives us a unique position in the global marketplace. Our category leadership and design innovation allows us to bring compelling products to market that resonate with consumers around the world. In addition, our solid capital structure and diversified business model provides us with an incredible platform to continue to generate strong cash flows to support our future growth and continue to deliver outstanding returns for our shareholders.”

For the third quarter of 2013, the company expects net sales to increase approximately 12.5% to 13.5%, operating margin in a range of 15.0% to 15.5% and diluted earnings per share in a range of $1.30 to $1.37, including the $0.08 per diluted share impact of the shift of expenses from the second quarter.

For the full year 2013 Fossil anticipates net sales to increase approximately 11.0% to 12.0%, operating margin in a range of 16.75% to 17.25% and diluted earnings per share in a range of $6.15 to $6.35.
 

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