Fossil, Inc. Global Watches and Accessories
Anna Amphlett, financial analyst for Fidelity Investments, must evaluate Fossil Inc. for possible addition to the company's high growth equity portfolio. Fossil, a company that designs, develops, markets, and distributes contemporary, high-quality fashion watches and accessories, had grown rapidly during the last five years and the company's stock price had substantially outperformed the S&P 500. In July 2005, Piper Jaffrey initially issued a "market outperform" rating and a target price of $23 per share. But in October 2005, the investment firm revised its target price to $20, noting that watches were less important to teens than other fashion accessories. During fiscal 2004, Fossil opened 17 new outlets and planned to invest in 27 to 33 new outlets in fiscal 2005. Amphlett must prepare a financial analysis of Fossil, evaluate the company's growth and financing plans, and make a portfolio recommendation to her firm.