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To: rory sohn who wrote (74407)	5/11/1999 10:21:00 AM
From: kendall harmon	Read Replies (1) \| Respond to of 119973

FOSL fantastic earnings, 47 cents versus 27 expected. Company Press Release Fossil First Quarter Earnings Soar 124% RICHARDSON, Texas--(BUSINESS WIRE)--May 11, 1999--Fossil, Inc. (NASDAQ:FOSL - news) today reported record first quarter net sales and earnings for the quarter ended April 3, 1999 (''First Quarter''). First Quarter Highlights: -- Net sales grew 46% to $83.3 million compared to $56.9 million in 1998. -- Operating income increased 128% to $17.9 million compared to $7.9 million in 1998. -- Net income soared 124% to $10.4 million compared to $4.7 million in 1998. -- Earnings per share grew 114% to $0.47 per share (diluted basis) compared with $0.22 per share in 1998. -- Gross profit margins increased to 51% from 49% in the year earlier period. Net sales hit record levels for the First Quarter and nearly surpassed all historical levels only falling short of the net sales recorded during the Company's 1998 fourth quarter. Over one-half of the increase in First Quarter net sales came from FOSSIL brand watches which are sold domestically and in over eighty countries around the world. Sales Highlights: -- Sales increases of FOSSIL brand watches at the department store level averaged between 25% and 30% during the First Quarter. -- Following a very successful holiday season, inventory on hand of FOSSIL brand watches at many of the Company's retail customers was below their targeted levels. This allowed the Company to ship in higher volumes of the Company's watch products than normal retail demand would have warranted during the First Quarter. -- Specialty store shipments grew at an accelerated pace due to an increase in the number of store locations in the current year over the prior year and an increase in their amount of retail space devoted to watches. -- The Company's FOSSIL brand Big Tic watch, first introduced on a limited basis during the Company's 1998 fourth quarter, continued to be very successful in the retail marketplace. -- Sales momentum continued in Europe, which recorded net sales increases of over 50% for the First Quarter in comparison to the same period in 1998. -- The Company's leather and sunglass products recorded sales growth increases of 25% and 35%, respectively during the First Quarter in comparison to the same period in 1998. -- Sales volume gains continued in the Company's private label and certain licensed products. ''Sales increases came in across the board with all product areas and geographic regions contributing,'' commented Randy Kercho, Fossil Inc. Chief Financial Officer. ''We also got a positive boost in sales from some refilling of displays at the retail level after a very successful 1998 holiday season. Earnings overall were driven by the tremendous increase in sales volumes as we were able to hold the line on expenses,'' added Mr. Kercho. The statements contained in this press release that are not historical facts are forward-looking statements and involve a number of uncertainties. The actual results of future events could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: general economic conditions, competition, raw material pricing, government regulation and possible future litigation, as well as the risks and uncertainties set forth in the Company's Current Report on Form 8-K dated March 30, 1999. Fossil designs, develops, markets and distributes fashion watches and other accessories principally under the FOSSIL, FSL, and RELIC brand names. The Company's products are sold primarily through department stores and other major retailers both domestically and in over 80 countries worldwide. Visit the Company's website at www.FOSSIL.com for more information.