Enjoy it while it lasts, Fossil – Apple Watch looms

“Although shares of Fossil Group are trading at their highest point since the spring on a strong earnings report, the fashion accessories maker and retailer still faces tough challenges — including competition from smartwatches and the upcoming Apple Watch,” Vance Cariaga reports for Investor’s Business Daily.

“On Wednesday, Fossil Group (NASDAQ:FOSL) shares rose 8% to 112.48 — their highest close since April — a day after the company beat Q3 sales and earnings estimates and announced that it had renewed its licensing agreement with Michael Kors for 10 years,” Cariaga reports. “In a note released Wednesday, Sterne Agee analyst Ike Boruchow raised his fourth-quarter, full-year 2014 and full-year 2015 EPS estimates on Fossil and also raised his 12-month price target on the stock to 106 from 105. At the same time, Boruchow said that there are still reasons to remain cautious on the stock.”

“According to news reports, the iPhone and iPad maker has put in orders for 30 million to 40 million chips to power its new watch, which is due to launch next year,” Cariaga reports. “In his Thursday report, Boruchow said that the Apple Watch ‘presents a meaningful competitive threat.’

Apple Watch in 42mm Stainless Steel Case with Milanese Loop
Apple Watch in 42mm Stainless Steel Case
with Milanese Loop

 
Cariaga reports, “‘While the threat to traditional watch companies from smartwatches has been debated for quite some time, it has generally been somewhat of a black box,’ Boruchow said. ‘With Apple’s recent announcement of the Apple Watch, we believe the potential threat is becoming increasingly clear. Launching in early 2015, with an initial price point of $349, the Apple Watch could take meaningful share in the fashion watch market.’ Fossil shares were down 2% to 110.36 in early trading on the stock market today.”

Read more in the full article here.

MacDailyNews Take: Fossil is soon to discover just how aptly they’re named.

[Thanks to MacDailyNews Reader “David E.” for the heads up.]

15 Comments

  1. I don’t see much comparison between a relatively inexpensive but quality watch and an expensive computer device. They are two different things with different functions. I can’t see wearing an Apple Watch to do outside work or any sort of craft work. I don’t know that I would wear it out to a club. I have several Fossil watches. They were very affordable and offer me a choice of practicality and style to match my activity. Most likely after I have an Apple Watch I will buy more Fossils if they appeal to me. They are dependable timepieces. They just tell the time, which would not be in the top 40 buying arguments for Apple’s device.
    It hardly seems that for Apple to be successful every other company has to suffer. MDN does seem a little be hopped on KoolAid sometimes.

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