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Fossil Group Inc FOSL
Q1 2013 Earnings Call Transcript

Transcript Call Date 05/07/2013

Operator: Welcome to the Fossil, Inc. First Quarter Fiscal Year 2013 Earnings Conference Call on the 7th of May 2013. Throughout todays recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions.

I'd now hand the conference over to Allison Malkin of ICR. Please go ahead.

Allison Malkin - Integrated Corporate Relations: Thank you. Good morning, everyone. Before we begin, you should be aware that during this conference call certain discussions will contain forward-looking information. Actual results could differ materially from those that will be presented during these discussions. Fossil's policy on forward-looking statements and additional information concerning a number of factors that could cause actual results to differ materially from such statements is readily available in our Form 10-K and 10-Q reports filed with the SEC.

In addition, Fossil undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. If any non-GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure and reconciliation of this non-GAAP financial measure to GAAP will be provided as supplemental financial information to this release under the Earnings Release section, under the Investor Relations heading on Fossil's website.

Please note that you may listen to a live webcast or a replay of this call by visiting Fossil's website and then clicking on About Us at the bottom of the homepage and then on Investor Relations and select Webcast under the Connections heading.

Now, I would like to turn the call over to Fossil's, Chairman and CEO, Kosta Kartsotis.

Kosta N. Kartsotis - Chairman and CEO: Thank you, Allison, and good morning, everyone. Joining us today to discuss our first quarter results are Dennis Secor, our Chief Financial Officer, and Jennifer Pritchard, our President of Retail.

We are off to an excellent start in 2013, and we are pleased to report results that exceeded both our top and bottom line expectations and set first quarter records for both revenues and earnings. We executed well across our entire business increasing revenues by 15% as we posted double-digit gains across all our geographies. We delivered strong margins, even as currencies turned less favorable and worked against us. We managed our resources tightly and continued to invest in our share repurchase program. With this, we delivered earnings per share of $1.21, up 30% from last year's $0.93. Our results include some timing and discrete items that Dennis will explain in just a moment.

Our consistent performance continues to demonstrate the power of our global operating platform, our compelling brands, strong innovation and the outstanding execution by our team, and we continue to make significant progress against our long-term strategic objectives.

The Fossil brand sales rose solidly, led by a 17% gain in watches and is balanced across geographies and fueled by strong innovation and market share gains and the addition of new doors. We are pleased with the performance of our repositioned jewelry assortment which is performing well and validates that our new offerings are aligned with our customers' expectations for our brand. In accessories, our small leather goods performed well and in women's handbags, our assortments look great and is infused with great colors and we're continuing to work toward improving our performance in that category.

Read our Earnings Call Transcript disclaimer.
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