Fossil Shares Slammed as Connected Watches Not Offsetting More Mature Products
Gains in Fossil’s connected watch business didn't offset other weaknesses, executives said on a Q1 call Tuesday after U.S. markets closed. Its wearables business is up 400 percent year on year, representing 7 percent of Q1 revenue. “We're now in…
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a growing wrist device market that is 30 percent-plus bigger than that stand-alone traditional watch market,” said CEO Kosta Kartsotis. “Growth in the overall wrist device market is being fueled by connected watches." Kartsotis cited IDC forecasting that the $19 billion smartwatch business in 2016 will grow to $35 billion by 2020. Greg McKelvey, chief strategy and digital officer, said wearables and traditional watches are colliding, creating “additional channels,” new customers and a larger addressable market. Fossil stock closed down 20 percent Wednesday at $14.44.