Fossil Inc. (Richardson, Texas) reported a 9.8 percent increase in net sales for its second quarter ended July 2, 2005. Gross profit grew 7.8 percent in the quarter.
For the six months ended July 2, net sales rose 13.1 percent and gross profit grew 13.2 percent.
“While our fashion watch business remained challenging in some of our key markets, we experienced solid growth in our accessory businesses and a number of our new initiatives. Additionally, our retail stores continued to deliver double-digit growth,” said senior vp and cfo Mike Kovar. “While falling short of our sales expectations for the quarter, we remain confident that significant newness added to our fashion watch assortments in the last few months will result in an improved sales performance during the more seasonal second half of the year. Although not implemented until mid-quarter, our cost cutting initiatives resulted in a reduction of planned operating expenses that allowed us to meet our operating income target even though sales were below internal plans.”
Company-owned retail store sales increased 19.8 percent in the quarter, partly as a result of a 16 percent increase in the average number of stores opened and same-store sales gains of 1.8 percent.