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Fossil Inc. (NASDAQ:FOSL), one of the world’s leading designer, marketer and distributor of fashion accessories worldwide, is scheduled to report its second-quarter 2011 financial results on Tuesday, August 9, 2011.

The current Zacks Consensus Estimate for the quarter is pegged at 75 cents a share. The revenue Estimates for the quarter is $533 million.

First Quarter 2011 Recaps

Fossil, which faces stiff competition from Guess? Inc. (NYSE:GES), posted robust results for the first quarter of 2011 as earnings shot up 62.3% year over year to 86 cents per share.

Earnings also surpassed the Zacks Consensus Estimate of 66 cents per share by 30.3%. Strong performance in the jewelry category and expansion of the leather category globally pushed up earnings in the first quarter.

Net sales soared 35.1% to $537.0 million from the prior-year quarter, demonstrating strong growth in the Asia Pacific Wholesale segment.

Management Guidance

Concurrent with the earnings release, the company provided its outlook for fiscal 2011 and second quarter 2011. For the second quarter of 2011, earnings are expected to be in the range of 70 cents to 73 cents.

For fiscal year 2011, the company expects diluted earnings per share to increase in the range of $4.44 to $4.54, which include a 12-cent favorable currency impact based on weaker U.S. dollar.

Second-Quarter 2011 Zacks Consensus

Earnings estimates for the second quarter of 2011, as provided by the analysts, range from a low of 71 cents to a high of 80 cents. Thus, the current Zacks Consensus Estimate for the quarter is pegged at 75 cents per share, reflecting a year-over-year decline of 6.2%.

Over the past 30 days, even though two analysts have revised the earnings estimate downwards, the Zacks Consensus Estimate did not change. However, the estimate declined by 1 penny over the last 90 days.

Earnings History: Ahead of Zacks

With respect to earnings surprises, Fossil has topped the Zacks Consensus Estimate in all the preceding four quarters. Over the last four quarters, the earnings surprise ranged from a positive of 8.15% to 142.42%, with the average earnings surprise being 54.00%, suggesting that Fossil has outperformed the Zacks Consensus Estimate.

Recommendation

Fossil Inc. is a growing company. The company’s in-house team of dedicated designers and product specialists enable the company to stay ahead in the face of changing lifestyle and fashion trends by bringing innovative and unique products to its customers. However, stiff competition from numerous manufacturers, importers and distributors; having significantly greater financial, distribution, advertising and marketing resources concern us.

Currently, we prefer to rate the stock as Neutral. Further, Fossil holds the Zacks #2 Rank, which translates into a short-term Buy rating.

Source: Fossil: Earnings Preview