May 12 (Reuters) - Watchmaker Fossil Inc (FOSL.O) posted a first-quarter profit that exceeded analysts' estimates, helped by tighter expense controls and better inventory management, and raised its outlook for the year.

For the first quarter, the company, which also sells jewelry, leather goods, belts, sunglasses and apparel, earned $17.3 million, or 26 cents a share, compared with $30.2 million, or 43 cents a share, a year ago.

Net sales fell 9 percent to $323.0 million.

Analysts on average were expecting earnings of 16 cents a share, before special items, on revenue of $323.5 million, according to Reuters Estimates.

The company, which had in February forecast weaker-than-expected first-quarter and full-year results, said administrative expenses in the quarter fell nearly 6 percent to $37.5 million.

Fossil has undertaken several measures to contain costs, including selective layoffs, a hiring freeze, suspension of merit-pay increases and company contributions towards employee retirement plans, and salary reductions for all executive officers and senior vice-presidents.

For 2009, Fossil, known for its namesake watches and Relic handbags, now sees earnings in the range of $1.50 to $1.70 a share, up 10 cents from its prior outlook.

It expects sales for the period to decline 5 percent to 8 percent, compared with its earlier estimate of a fall of 6 percent to 10 percent. (Reporting by Amitha Rajan in Bangalore; Editing by Himani Sarkar)