In its fourth quarter results, released after US markets closed on Tuesday, the company posted net income of $49.7mln compared to $70.5mln the previous year.
Diluted earnings per share dropped to $1.03 from $1.46 while revenue fell to $959.2mln from $992.5mln. The company blamed a decline in sales of its watches and other wearable fashion accessories.
Analysts polled by Factset had expected earnings per share of $1.12 and revenue of $977mln.
Fossil said it expects first-quarter adjusted losses between 25c per share to 10c per share, well below forecasts of 4c per share.
The group plans to relaunch its wearables business this year with lower prices in an effort ot turnaround sales.
However, Wells Fargo said the plans for the wearables division and management’s need to reinvest in pricing at the business will hurt profitability.
The bank’s concerns about the wearables unit, prompted a downgraded of the stock to an ‘underperform’ rating from ‘market perform’.
Shares fell 17% in early US trade.
Story by ProactiveInvestors