Fossil (NASDAQ:FOSL) is one of the biggest stock losers in the retail industry over the last couple of years. Fossil shares plummeted from the all-time high of $127 a share at the beginning of 2014 to $11 a share at the beginning of this year. Traders blamed declining revenues and big losses for the massive selloff in FOSL stock price.
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Its stock, however, started rebounding over the last two months, recently hitting a 52-week high amid price target upgrades from analysts. Fossil stock currently stands at $25 a share while KeyBanc has set the price target of $32 a share.
KeyBanc analysts are showing confidence in its business transformation. The analyst said, “Fossil is in a solid position to be the number two player in the wearables market and sees the overall business as taking a turn for the better.”
Business Restructuring
The company has been working on several initiatives to improve its revenue base and earnings potential. Its management is planning to enhance the design of watches combined with the improvement of its distribution structure and operating capabilities in the following quarters.
The company’s business strategies are working considering robust growth in Fossil brand watches and the introduction of smartwatches.
Fossil’s comparable watch sale grew 12% year over year in American regions in the first quarter this year. The company has also reported solid growth from Asian markets in Q1. Revenue from its smartwatches jumped 97% from the year-ago period.
It has also recently announced Puma as its new licensed watch brand. Kosta Kartsotis, Chairman, and CEO commented: “We are excited to add this strong global brand to our portfolio, with plans to begin distribution of Puma watches in 2019. We believe we have the right strategies, brands and balance sheet strength to continue to transform our Company and ultimately return to long-term profitable growth.”
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Overall, the company is showing progress in its top and the bottom line performance. This is because analysts are predicting sustainable growth in its share price performance.
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