Fossil Group, Inc. reported its financial results for the fourth quarter and fiscal year ended January 3, 2015. Q4 net income was $154.1 million, a 4% increase compared to $148.5 million for Q4 2013.
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Diluted earnings per share grew 12% to $3.00, compared to $2.68 per diluted share for the fourth quarter of fiscal 2013. The increase in diluted earnings per share was primarily attributable to operating income growth, substantially all of which was offset by currency headwinds, the benefit of a lower share base compared to last fiscal year and a non-operating gain associated with a settlement related to the 2012 Skagen acquisition.
For fiscal year 2014, the company reported net income of $376.7 million, or $7.10 per diluted share, compared to $378.2 million or $6.56 per diluted share for fiscal 2013. The increase in diluted earnings per share was attributable to operating income growth and the benefit of a lower share base compared to last fiscal year, partially offset by currency headwinds.
During the fiscal fourth quarter, the translation impact of a stronger U.S. dollar decreased the company's reported net sales by $32.5 million, operating income by $17.9 million and earnings per share by $0.23. During fiscal 2014, the translation impact of a stronger U.S. dollar decreased the company's reported net sales by $17.1 million, operating income by $12.1 million and earnings per share by $0.17.
The following discussion of the company's net sales is based on constant dollar performance. Fourth quarter 2014 worldwide net sales rose 3% or $34.9 million, reflecting sales growth in the company's direct to consumer segment and a slight decrease in the company's wholesale channel. The sales increase was driven by growth in the company's multi-brand global watch portfolio as well as growth in the SKAGEN® and FOSSIL® brands.
Jewelry sales increased significantly during the quarter and sales of leathers increased slightly. For fiscal 2014, worldwide net sales increased by 8% or $266.8 million, with sales growth in the company's wholesale channel and direct to consumer segment.
Net sales from the North America wholesale segment decreased 10%, or $41.7 million, compared to the fourth quarter of fiscal 2013. A decline in watches and leathers led to the North American sales decrease while jewelry sales increased. Decreases in wholesale shipments to major department store accounts in the United States combined with a reduction in sales to off-price partners led to the decline.
Europe wholesale net sales rose 8%, or $22.4 million, compared to the fourth quarter of fiscal 2013. Growth in watches and jewelry drove the European sales increase and were partially offset by a decline in leathers.
The majority of markets posted sales increases, with the strongest performance coming from the United Kingdom, Germany and distributor markets, partially offset by declines in Italy and Spain. Asia Pacific wholesale net sales rose 10%, or $10.8 million, compared to the fourth quarter of fiscal 2013. Double digit growth in watches and an increase in leathers drove the increase.
Most markets contributed to the sales growth, with particularly strong growth in India, Japan and Australia. Direct to consumer net sales for the fourth quarter of fiscal 2014 increased 16%, or $43.4 million, compared to the fourth quarter of fiscal 2013.
The sales increase was driven by the expansion of the global retail store base, as well as an increase in global comparable store sales, with an increase in all three regions. Comparable sales increased in jewelry, leathers and watches. ■