Financial Data and Key Metrics Changes - Global sales for the third quarter were $344 million, down 21% or 22% in constant currency, with a $10 million headwind due to a timing shift from Q3 into Q4 [3][6][35] - Gross margin for Q3 was 47%, down 330 basis points year-over-year, impacted by various factors including minimum product royalties and foreign currency settlements [5][28] - Adjusted operating loss was $31 million, with an adjusted operating margin of negative 9% [28][41] Business Line Data and Key Metrics Changes - In the Americas, net sales declined 18% in constant currency, with wholesale channel sales down 23% [4][35] - The traditional watch category saw a 15% decline in sell-in, lagging behind a 6% decline in sell-out [4] - E-commerce sales grew by 8%, driven by investments in digital capabilities [17][49] Market Data and Key Metrics Changes - Sales in Europe declined 30% in constant currency, with wholesale channel sales down 36% [27] - In Asia, sales were down 14% in constant currency, with India showing a 6% growth while Mainland China sales declined 30% [50] - Retail store counts decreased, with 143 stores in the Americas and 87 in Europe, down 7% and 22% respectively [4][27] Company Strategy and Development Direction - The company is focused on revitalizing the FOSSIL brand and maximizing its licensed brand portfolio, with targeted investments in marketing [23][40] - The Transform and Grow Plan aims to achieve $300 million in annualized operating income benefits by 2025, with $80 million captured year-to-date in 2023 [22][48] - The company is addressing challenges in the wholesale channel and enhancing performance in third-party e-commerce [17][34] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer spending is softening, particularly in discretionary categories, impacting sales [40][41] - The outlook for Q4 anticipates net sales declines of 8% to 19%, reflecting ongoing challenges in wholesale and store closures [6][41] - Management remains confident in the long-term trajectory for the brand, particularly in emerging markets and jewelry [30][40] Other Important Information - Working capital levels decreased by approximately $100 million or 24%, with inventory down 28% year-over-year [51] - The company is implementing various initiatives to improve gross margins and reduce organizational complexity [54] Q&A Session Summary Question: What are the key strategies to stabilize sales and when do you expect to see an inflection point? - The company is focusing on driving higher sell-throughs and profitability through various TAG initiatives, including SKU reductions and improved market pricing [30] Question: Could you provide more details on the TAG program and its progress? - The TAG program is on track to deliver $300 million in benefits, with $100 million expected by the end of 2024 [55] Question: How does the company view capital allocation in the near term given expected sales declines? - The focus is on preserving capital for business operations while executing the Transform and Grow plans, with expectations for healthier free cash flow in the long term [55]

Consumer Spending and Market Environment - Fossil Group reported a cautious consumer spending environment due to macroeconomic factors, expecting continued pressure on discretionary spending in Q4 2023[98]. - Factors affecting actual results include changes in consumer spending patterns, supply chain interruptions, and competition in the market[184]. Financial Performance - Consolidated net sales decreased by $92.2 million, or 21.1%, in Q3 2023 compared to Q3 2022, with declines across all regions[126]. - Gross profit decreased by 26.4% to $161.7 million, with a gross profit margin of 47.0%, down from 50.3% in the prior year quarter[133]. - Total operating expenses increased by 5.5% to $208.1 million, representing 60.5% of net sales, compared to 45.2% in the prior year quarter[134]. - Operating loss was $46.4 million, with an operating margin of (13.5)%, compared to an operating income of $22.5 million and a margin of 5.2% in the prior year quarter[135]. - Net income attributable to Fossil Group, Inc. for the third quarter was a loss of $61.1 million, or $1.16 per diluted share, compared to a net income of $5.8 million, or $0.11 per diluted share, in the prior year[140]. - Adjusted net loss for the third quarter was $49.0 million, with an adjusted loss per diluted share of $0.93, compared to an adjusted net income of $6.3 million, or $0.12 per diluted share, in the prior year[141]. - Consolidated net sales decreased by $192.2 million, or 16.2% (15.5% in constant currency), for the year-to-date period compared to the prior year[146]. - Net loss attributable to Fossil Group, Inc. was $128.9 million, or $2.47 per diluted share, compared to a loss of $34.7 million, or $0.67 per diluted share, in the prior year YTD period[160]. - Adjusted net loss for the Year To Date Period was $101.0 million, with an adjusted loss per diluted share of $1.94, compared to an adjusted net loss of $29.5 million, or $0.57 per diluted share, in the prior year YTD period[161]. Sales Performance - Wholesale sales declined by 24.2% (25.4% in constant currency), driven by lower purchases by wholesale accounts and reduced consumer demand[126]. - Direct to consumer sales decreased by 11.4% (11.9% in constant currency), attributed to a reduced store footprint, which was down by 41 stores (12%) since the end of the prior year quarter[126]. - Net sales in the Americas decreased by $31.7 million, or 17.2% (17.6% in constant currency), primarily in the FOSSIL and MICHAEL KORS brands[128]. - Europe net sales decreased by $36.0 million, or 25.1% (29.6% in constant currency), with significant declines in MICHAEL KORS and FOSSIL brands[130]. - Asia net sales decreased by $17.2 million, or 17.2% (14.2% in constant currency), with notable declines in the EMPORIO ARMANI brand[132]. - Traditional watch sales decreased by 18.5% (19.4% in constant currency), while smartwatch sales declined by 48.0% (49.1% in constant currency)[126]. Operational Strategy and Initiatives - The company anticipates generating approximately $300 million in annualized operating income benefits by the end of 2025 through its expanded Transform and Grow Plan (TAG)[106]. - Fossil Group expects to incur charges of approximately $100 million to $120 million over the duration of TAG, with an estimated $50 million of charges in fiscal year 2023[106]. - Fossil Group's TAG plan includes initiatives to exit or minimize certain product offerings and strengthen gross margins[106]. - The company is focused on optimizing its core categories and brands to improve gross margins and reduce operating expenses through better inventory management[107]. Liquidity and Financial Stability - Fossil Group's total liquidity, defined as cash and cash equivalents plus available borrowings, is monitored to ensure financial obligations can be met[120]. - The cash and cash equivalents balance at the end of the third quarter was $116.1 million, down from $162.6 million at the end of the prior year quarter[168]. - Net working capital decreased to $436.4 million from $586.6 million at the end of the prior year quarter[169]. - Total liquidity as of September 30, 2023, was $139.5 million, down from $213.0 million a year earlier[175]. - The company had available borrowing capacity of $23.4 million under the revolving facility as of September 30, 2023[181]. - The company is in compliance with all debt covenants related to its credit facilities as of September 30, 2023[181]. Risks and Uncertainties - Actual results may differ materially due to various risks and uncertainties outlined in the Quarterly Reports on Form 10-Q and the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[185]. - Forward-looking statements involve risks such as increased political uncertainty, worldwide economic conditions, and pandemic effects[184]. - Risks related to the success of the TAG Plan and business strategy could impact future performance[184]. - Changes in foreign currency valuations and costs of materials and labor are potential risks[184]. - Customer acceptance of new product designs and lines is crucial for future sales performance[184]. - The company faces challenges from government regulations, tariffs, and potential litigation outcomes[184]. - Loss of key personnel and management of retail store traffic are significant operational risks[184]. - Compliance with debt covenants and meeting debt service obligations are critical for financial stability[184].

Company Participants Kosta Kartsotis - Chairman and CEO Conference Call Participants Now I'll turn the call over to Christine Greany of the Blueshirt Group to begin. I would like to remind you that information made available during this conference call contains forward-looking information and actual results could differ materially from those that will be discussed during this call. Fossil Group's policy on forward-looking statements and additional information concerning a number of factors that could cause ...

Fossil Group, Inc. (NASDAQ:FOSL) Q1 2023 Earnings Conference Call May 10, 2023 5:00 PM ET Christine Greany - The Blueshirt Group, Investor Relations Sunil Doshi - Chief Financial Officer Company Participants Kosta Kartsotis - Chairman and CEO Jeff Boyer - Chief Operating Officer Operator Now I'll turn the call over to Christine Greany of Blueshirt Group to begin. Hello, everyone, and thank you for joining us. With us today on the call are Kosta Kartsotis, Chairman and CEO; Jeff Boyer, Chief Operating Office ...

Use these links to rapidly review the document TABLE OF CONTENTS PART IV Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-41040 FOSSIL GROUP, INC. (Exact name of re ...

Fossil Group, Inc. (NASDAQ:FOSL) Q4 2022 Earnings Conference Call March 8, 2023 5:00 PM ET Company Participants Christine Greany - IR, Blueshirt Group Kosta Kartsotis - Chairman & Chief Executive Officer Jeff Boyer - Chief Operating Officer Sunil Doshi - Chief Financial Officer Greg McKelvey - EVP & Chief Commercial Officer Conference Call Participants Operator Good afternoon, ladies and gentlemen, and welcome to the Fossil Group’s Fourth Quarter and Full Year 2022 Earnings Call. At this time, all parties a ...

Fossil Group, Inc. (NASDAQ:FOSL) Q3 2022 Earnings Conference Call November 9, 2022 5:00 PM ET Company Participants Christine Greany - IR, Blueshirt Group Kosta Kartsotis - Chairman Chief Executive Officer Jeff Boyer - Chief Operating Officer Sunil Doshi - Chief Financial Officer Greg McKelvey - EVP, Chief Commercial Officer Conference Call Participants Operator Good afternoon, ladies and gentlemen, and welcome to the Fossil Group Third Quarter 2022 Earnings Call. At this time, all parties are in a listen-on ...

Fossil Group, Inc. (NASDAQ:FOSL) Q2 2022 Earnings Conference Call August 10, 2022 5:00 PM ET Company Representatives Kosta Kartsotis - Chairman Chief Executive Officer Jeff Boyer - Chief Operating Officer Sunil Doshi - Chief Financial Officer Greg McKelvey - EVP, Chief Commercial Officer Christine Greany - Blueshirt Group Conference Call Participants Operator Good afternoon, ladies and gentlemen, and welcome to the Fossil GroupÂ's Second Quarter 2022 Earnings Call. At this time all parties are in listen-onl ...

| --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|------------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FOSSII GROUP | | | | | | | | | Investor Presentation \| June 2022 | | | | | | | | | | | | | | FINANCIAL DISCLOSURE ADVISORY Certain statements contained herein that are not historical facts, constitute "forward-look ...

Fossil Group, Inc. (NASDAQ:FOSL) Q1 2022 Earnings Conference Call May 11, 2022 5:00 PM ET Company Participants Christine Greany - The Blueshirt Group, Investor Relations Kosta Kartsotis - Chairman and CEO Sunil Doshi - Chief Financial Officer Greg McKelvey - EVP and Chief Commercial Officer Jeff Boyer - Chief Operating Officer Conference Call Participants Operator Good afternoon, ladies and gentlemen, and welcome to the Fossil Group First Quarter 2022 Earnings Call. At this time all parties are in listen-on ...