The company also said it expects Asia, especially China , to account for a third of its revenue as its moderately priced luxury products gain traction.
The company sells watches ranging from $7 to upwards of $2,000, but many are offered in the $100 to $250 range. Apart from its namesake brand, it sells Michael Kors, Armani Exchange, and Marc by Marc Jacobs watches.
Fossil has been attempting to reposition its low-priced jewelry line to be more in sync with the "affordable luxury" image it has cultivated for its watches and handbags.
"Asia's rapidly growing middle class loves watches and jewelry and in particular our brands ... (it) also represents our highest margin region so high return opportunity for us as well," Chief Executive Kosta Kartotis said in a conference call.
Asia-Pacific wholesale sales grew 19 percent to $102.8 million in the fourth quarter ended Dec. 29. The region contributed about 11 percent of total sales in the period.
Luxury companies, hurt by a slow European market, have moved on to greener pastures such as China .
To expand in China , Fossil plans to open more retail concessions, or shop-in-shop stores, which are company-owned, brand-specific stores in bigger retail establishments.
Citibank analyst Oliver Chen said Fossil would continue to gain market share given its leadership in moderately-priced watches and expects Asia sales to hit the one-third revenue mark in about four years.
A fourth of global luxury purchases were made by Chinese shoppers last year, surpassing U.S. consumers, according to consultancy Bain & Co .
Companies such as Swatch Group SA , German fashion house Hugo Boss and Louis Vuitton parent LVMH
are optimistic that 2013 will benefit from improved demand in China and the United States.
The Next Michael Kors ?
The license to sell Tory Burch-branded watches will help Fossil benefit from the designer's popularity, including among celebrities such as Anne Hathaway and Jessica Alba.
"Tory Burch will be well received by investors as many will make (and rightfully so) comparisons to the very successful Michael Kors line of watches," Piper Jaffray analyst Neely Tamminga wrote in a note.
The Michael Kors line under license from the fashion house grew from $62 million in 2009 to likely close out 2012 at about $500 million, Tamminga said.
Michael Kors Holdings Ltd on Tuesday raised its full-year forecast as strong holiday sales of luxury items in North America and Europe helped it race past Wall Street estimates in the third quarter.
Tamminga, however, reckons that Tory Burch will likely not launch until late 2014 and would not ramp up to the size of the Michael Kors license for at least a few years.
Fourth-quarter earnings rose to $151.1 million, or $2.51 per share, from $117.9 million, or $1.87 per share, a year earlier.
On an adjusted basis, Fossil earned $2.27 per share, beating analysts expectations of $2.26 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 14 percent to $947.7 million driven primarily by a double-digit growth in its global watch portfolio and came in above analysts' view of $930.4 million.
The Skagen brand, which Fossil bought last year, contributed to the sales rise across North America, Europe and Asia pacific. (Reuters)