This is the 4th post in what developed into a kind of “Watch series”, see Fossil part 1 and part 2 plus Movado.
Swatch is the largest wrist watch producer in the world. The company is the brainchild of legendary founder Nicholas Hayek who turned around the whole Swiss Watch industry and created Swatch out of insolvent Swiss watch makers.
On Thursday after close, Fossil came out with their Q3 numbers. Without adjusting for currencies, numbers looked pretty bad. Sales were down 14%, watches even -17%. In the earnings call they blame most of the decline on Michael Kors:
This is a follow-up to my first post on Fossil. The short summary:
Fossil has a good but not great business with some issues, among others the potential success of smart watches. The reason to dig deeper was the unusual combination of CEO/owner with zero salary and capital allocation with a focus on share buy backs.
Share buy backs
There is a great collection of articles on Teledyne and Henry Singleton “available at CS Investing. One absolute gem inside is a classification of stock buy backs in order of usefulness to shareholders from Hedge Fund Honcho Leon Cooperman:
value and opportunity 