Watch maker Fossil Inc. said Tuesday its third-quarter profit fell but sales improved at company-owned stores.

The company raised its fourth-quarter and full-year guidance as a result, and shares rose in premarket activity.

Profit for the 13 weeks ended Oct 3 fell 3 percent to $35.3 million, or 52 cents per share, from $36.5 million, or 54 cents per share, in the same period last year.

Revenue fell 7 percent to $381.4 million from $409.8 million last year.

Analysts polled by Thomson Reuters, on average, predicted a profit of 42 cents per share on revenue of $376.9 million.

"Our third-quarter results surpassed our expectations, driven by retail sales stemming from company-owned stores, a more favorable product sales mix and increased expense leverage," said CFO Mike Kovar in a statement.

Fossil, based in Richardson, Texas, now expects fourth-quarter earnings of 82 cents to 86 cents per share, up from previous guidance of 74 cents to 80 cents per share.

Analysts polled by Thomson Reuters, on average, predict profit of 78 cents per share.

Fossil expects sales to rise 7 percent to 9 percent from a year ago, implying sales of $496.6 to $505.9 million. Analysts expect sales of $466.8 million.

For the year, the company now expects earnings of $1.85 to $1.89 per share, up from a prior forecast of $1.63 to $1.73 per share. Analysts predict profit of $1.71 per share.

Shares rose $2.72, or 9.4 percent, to $31.63 in afternoon trading. The stock earlier hit $32.07, eclipsing a 52-week high of $30.85 set Oct. 19.