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Actionable news in FOSL: Fossil Group, Inc.,

Sell This Troubled Retailer Now

This stock is on the wrong end of a fading trend. In 2010, customers couldn't buy enough of this company's then-chic watches, jewelry, belts and sunglasses. Today, sales are declining worldwide.

Fossil Group (Nasdaq: FOSL) -- a name that wasn't meant to be ironic but may prove to be. In the rapidly changing world of fashion, the worst thing a brand can be is antiquated.

This isn't just a subjective interpretation of fashion trends either; the numbers and the stock chart all support the argument that Fossil is in trouble.

All Signs Point Down For Fossil
Let's start with a few fundamental reasons to be concerned over Fossil's business.

Fossil's most recent quarterly results were weighed down by negative currency exchange rates. In mid-August, Fossil reported second-quarter revenue dropped 4% year over year to $740 million -- below analyst estimates for revenue of $750 million.

Things don't look to be getting better. Nearly half of Fossil's revenues come from Europe and Asia. Economic slowdowns there, coupled with a rising U.S. dollar, could reduce the amount it earns. Anticipating this, management lowered its full-year earnings per share (EPS) guidance to $4.80 to $5.60, down from a previous $5.25 to $6.05.

Analysts are similarly pessimistic. With domestic and international sales expected to slow, they're predicting third-quarter revenue, which should be reported in mid-November, will drop 11.2% to $794.2 million. For the full year, analysts expect revenue to slip 6.5%...


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