Fossil, Inc. (Nasdaq: FOSL) is a fashion apparel company investors rarely hear about as it markets watches, jewelry and clothing accessories under proprietary and licensed brands. None the less, Fossil is posting some numbers of interest to investors. According to the recent 3Q 2007 earnings report, net sales are up 20% to $358.6 million, gross profit is up 26% to $187 million, operating income is up 47% to $48.5 million, net income is up 41% to $40.5 million, and diluted earnings per share (EPS) is up 39% to $0.43. These are whopping increases on fair-sized numbers.

Also in Fossil's favor is the fact that 50% of its sales come from outside the U.S., so the company is taking advantage of currency exchanges. The company is looking at a good holiday selling season, particularly in Europe, where net sales increased 28%. International wholesale orders are up 32%.

Fossil management is not depending just on these good numbers. The company is still focused on cutting expenses and better inventory control. Cost of inventory decreased slightly in 3Q 2007, despite 34 additional new stores. Interest expenses decreased $825,000, and the company is shifting its product lines to higher profit margin items. Fossil just inked a licensing deal with Burberry, good through 2012. At $41.36, up 4% on the earnings news, this under the radar stock may be worth a look.

Investors don't hear much about Tandy Brands Accessories Inc. (NASDAQ: TBAC). Tandy designs and markets various types of clothing and fashion accessories under a variety of labels. Problem is Tandy is not marketing what vendors wish to purchase. Net sales for 1Q 2008 were down $18 million to $39.5 million, caused primarily on a lack of orders from Tandy's #1 customer. Any company that relies on one customer for the bulk of its business eventually winds up in trouble.

CEO J.S.B. Jenkins has spent the last 22 months trying to hollow out costs and shift away from low profit margin product lines. Tandy is transferring the remainder of its manufacturing capacity overseas to lower costs, and has lined up three new licensing agreements to begin in 2008. The company recently declared a dividend of $0.04 per share, its 18th straight quarterly dividend. But is a dividend payout really the best use of funds given that Tandy recently breached (not defaulted on) the terms of its $75 million unsecured credit line?