Fossil Group Inc. suffered the worst stock decline in more than three years after its sales missed analysts’ estimates, fueling concern that the watch industry is mired in a slump and losing ground to wearable technology.
Third-quarter revenue fell to $771.3 million last quarter, the Richardson, Texas-based company said on Thursday. Analysts had predicted $795.1 million. Fossil also predicted a fourth-quarter decline of as much as 16 percent.
Fossil is struggling with slower foot traffic at retailers like Macy’s and Nordstrom, as well as new competition from the Apple Watch and Fitbit. To cope with the technology shift, the company announced the purchase of Misfit Inc. for $260 million on Thursday. The acquisition will provide Fossil with fitness and sleep-tracking wrist devices, but the products will take a while to have an impact on its results.
“We are not satisfied with our overall performance,” Chief Executive Officer Kosta Kartsotis said in a statement. “Our branded jewelry and leathers business increased, but were more than offset by a decline in our watch business, reflecting general weakness in the category.”
Fossil fell 37 percent to $32.39 in New York on Friday, the biggest decline since May 2012. The stock is now down 71 percent this year.