Q3 2008 Diluted EPS Increases 25.6% to $0.54
         14.3% Net Sales Growth and Margin Expansion Result in
                     31.5% Operating Income Growth

RICHARDSON, Texas, Nov. 11, 2008 (GLOBE NEWSWIRE) -- Fossil, Inc. (Nasdaq:FOSL) (the "Company") today reported third quarter net sales and earnings for the thirteen-week ("Third Quarter") and thirty-nine week ("Nine Month Period") periods ended October 4, 2008.

Third Quarter Results (2008 vs 2007):

 * Net sales increased 14.3% to $409.8 million compared to
   $358.6 million;
 * Gross profit grew 19.9% to $224.2 million, or 54.7% of net sales,
   compared to $187.0 million, or 52.1% of net sales;
 * Operating income increased 31.5% to $63.7 million, or 15.6% of net
   sales, compared to $48.5 million, or 13.5% of net sales;
 * Net income rose 19.8% to $36.5 million compared to $30.5 million;
   and
 * Diluted earnings per share increased 25.6% to $0.54 on
   68.0 million shares compared to $0.43 per diluted share on
   70.3 million shares.

Nine Month Period Results (2008 vs 2007):

 * Net sales increased 15.4% to $1.1 billion compared to
   $969.9 million;
 * Gross profit increased 23.3% to $608.8 million, or 54.4% of net
   sales, compared to $493.6 million, or 50.9% of net sales;
 * Operating income increased 42.0% to $147.8 million, or 13.2% of
   net sales, compared to $104.1 million, or 10.7% of net sales;
 * Net income increased 30.9% to $91.8 million compared to
   $70.2 million; and
 * Diluted earnings per share increased 33.0% to $1.33 on
   68.9 million shares compared to $1.00 per diluted share on
   70.1 million shares.

Mike Kovar, Executive Vice President and Chief Financial Officer stated, "Our strong Third Quarter results reflect the success of our key initiatives to grow our Fossil brand, increase our international presence and expand our direct-to-consumer segment. Sales growth was broad-based across all of our operating segments and businesses. In addition, we continued to experience positive retail store comps within our accessory and outlet store concepts despite challenging economic conditions. Our balance sheet remains strong with $125 million in cash at quarter end and we have no outstanding borrowings under our U.S. revolving credit facility. The Company's strong cash flow also allowed it to utilize $110 million of cash to repurchase approximately 3.4 million shares over the last twelve months."

"Since the end of the Third Quarter business conditions have grown more challenging," Mr. Kovar continued. "Global economies have weakened, but even more significant to our business model, is that the U.S. dollar has strengthened appreciably against most other currencies. Accordingly, we have revised our fourth quarter outlook to reflect this weaker economy and more significantly, pressure from currency. In comparison to our previous fourth quarter guidance of $0.94 to $0.97 diluted earnings per share, provided during our second quarter call in August, we are reducing our current fourth quarter guidance to $0.70. This is based upon $0.91 diluted earnings per share on a constant dollar basis and a reduction of $0.21 to reflect expected currency losses given the strengthening of the U.S. dollar since August. Notwithstanding currency, the fundamentals of our business remain strong. We have a highly diversified business model with brands and product offerings that are highly desirable at affordable price-points. We believe our unique strengths have us positioned to gain market share this holiday season."

Operating Results

Worldwide net sales rose 14.3% (12.4% excluding currency impact) during the Third Quarter to $409.8 million in comparison to the prior year quarter net sales of $358.6 million with all of the Company's operating segments contributing to the growth. Total international wholesale sales rose 15.8% (12.1% excluding currency impact). Wholesale sales in Europe increased 12.4% (8.2% excluding currency impact) primarily led by a sales volume increase in FOSSIL(r) watches and jewelry, sales related to the launch of DKNY(r) jewelry into approximately 1,300 doors and sales volume increases in licensed brand watches, principally EMPORIO ARMANI(r) and MICHAEL KORS(r). Other international wholesale sales increased 22.9% (20.1% excluding currency impact) primarily driven by sales volume growth in FOSSIL and licensed brand watches and jewelry. Domestically, net sales from the Company's wholesale watch business rose 6.7%, primarily the result of sales volume growth in licensed brand watches, principally EMPORIO ARMANI and MICHAEL KORS, as well as sales volume growth in our proprietary MICHELE(r) watches. These increases in net sales were partially offset by sales volume declines in RELIC(r) watches. Net sales from the domestic accessories business increased 8.8% during the Third Quarter as a result of sales volume growth in RELIC women's bags, FOSSIL accessory jewelry and cold weather accessories partially offset by sales volume decreases in men's leathers. Direct to consumer sales increased 22.4% (22.0% excluding currency impact) primarily as a result of a 29.0% increase in the average number of company-owned stores open during the Third Quarter, comparable store sales gains of 3.2% (2.7% excluding currency impact) and a 33.1% increase in e-commerce sales. For the Nine Month Period, consolidated net sales increased 15.4% (10.8% excluding currency impact) principally due to sales volume growth in the international and direct to consumer segments.

Gross profit of $224.2 million represents an increase of 19.9% over the $187.0 million in the prior year quarter. Gross profit margin increased by 260 basis points to 54.7% in the Third Quarter compared to 52.1% in the prior year quarter. For the Third Quarter, the increased gross profit margin was primarily the result of an increase in the sales mix of higher margin direct to consumer segment sales, an increase in overall direct to consumer segment gross profit margin as a result of a 600 basis point increase in the Company's U.S. outlet store gross profit margins and an increase in the number of full price accessory stores open as compared to the prior year quarter. Additionally, the Company's ongoing initiative to reduce product cost and decrease the proportion of lower margin product within its assortments contributed to the overall increase in gross profit margin. Gross profit margin also increased approximately 60 basis points as a result of the weaker U.S. dollar. For the Nine Month Period gross profit margin increased 350 basis points to 54.4% compared to 50.9% in the comparable prior year period. The gross profit margin was impacted by factors similar to those experienced during the Third Quarter and included an approximate 150 basis point improvement relating to the weaker U.S.