Core Insights - Fossil Group, Inc. reported a first quarter net sales of $233 million, reflecting an 8.5% decrease compared to the previous year, primarily due to category softness and declines in smartwatch sales [5][12] - The company achieved a gross margin of 61.3%, an increase of 890 basis points year-over-year, attributed to improved product margins and reduced freight costs [5][6] - Despite an operating loss of $7 million, the adjusted operating income was $10 million, indicating a positive trend in operational performance [2][6] Financial Performance - First quarter net sales were $233.3 million, down from $254.9 million in the same quarter last year, with a constant currency decline of 6.2% [5][15] - Gross profit increased to $143 million from $133.5 million, with a gross margin improvement to 61.3% from 52.4% [5][15] - Operating expenses decreased by 8% to $149.7 million, with selling, general and administrative expenses down 12.1% to $133.8 million [5][15] Operational Highlights - The company reported a total liquidity of $100 million, including $78.3 million in cash and cash equivalents [2][7] - Inventory levels decreased by 19% year-over-year to $182.1 million, indicating improved inventory management [7] - The company closed 62 stores, reducing the total store count to 220, with significant closures in the Americas and Europe [28] Market Trends - Sales in the Americas declined by 9% and by 10% in Asia, while Europe saw a slight increase of 1% [5] - Direct-to-consumer sales decreased by 24%, while wholesale sales increased by 6% on a constant currency basis [5] - The traditional watch category saw a 2% increase in sales, contrasting with a 37% decline in the leathers category [5] Future Outlook - The company reiterated its full-year guidance for 2025, anticipating a worldwide net sales impact of approximately $45 million due to retail store closures [8] - The management expressed confidence in the turnaround plan, aiming for long-term profitable growth despite current challenges [4][8]

Group 1 - Fossil Group, Inc. will report its first quarter 2025 financial results after market close on May 14, 2025 [1] - A conference call to discuss the financial results will take place at 5:00 p.m. ET on the same day, accessible via the company's investor relations website [1] - The call will also be archived for replay, providing investors with ongoing access to the information [1] Group 2 - Fossil Group, Inc. specializes in lifestyle accessories, including watches, jewelry, handbags, small leather goods, belts, and sunglasses [2] - The company operates a diverse portfolio of owned and licensed brands, such as Fossil, Michele, Relic, Skagen, Zodiac, Armani Exchange, Diesel, Emporio Armani, kate spade new york, Michael Kors, Skechers, and Tory Burch [2] - Fossil Group is committed to design and innovation, supported by an extensive distribution network across various geographies, categories, and channels [2]

Core Points - Fossil Group, Inc. announced the granting of equity awards as a material inducement for the employment of newly-hired executives [1] - The appointed executives include Chief Digital Information Officer Antonio Carriero, Chief Commercial Officer Joe Martin, and Chief Financial Officer Randy Greben [2] - The equity awards consist of time-based restricted stock units (RSUs) with specific quantities for each executive [2][3] - The RSUs will vest over three years, contingent on the executives' continuous employment [3] - The awards were approved by the Company's Compensation and Talent Management Committee and granted outside the Company's equity incentive plan [4] Company Overview - Fossil Group, Inc. specializes in design, marketing, distribution, and innovation of lifestyle accessories [5] - The company offers a diverse portfolio of owned and licensed brands, including watches, jewelry, handbags, and more [5] - Fossil Group is committed to delivering high-quality design and innovation across its brands through an extensive distribution network [5]

Group 1 - Exxon Mobil Corporation and NextEra Energy are key players in the U.S. energy sector, addressing the essential market need for energy to power industries, businesses, and households [1] - Grassroots Trading focuses on providing objective and unbiased research, particularly on small- to mid-cap companies, while also identifying opportunities in larger companies [2]

Core Viewpoint - Fossil Group, Inc. reported a mixed performance in its fourth-quarter earnings, with a narrower net loss compared to the previous year, but significant declines in net sales driven by weak consumer demand and strategic exits from certain product categories [2][3][15]. Financial Performance - The company incurred a fourth-quarter net loss of $0.14 per share, an improvement from a loss of $0.54 per share in the prior year [2]. - Net sales totaled $342.3 million, an 18.8% decline from $421.3 million in the prior-year period [3]. - For the full year 2024, net sales were $1.1 billion, down 18.9% from $1.4 billion in 2023 [15]. Gross Margin and Operating Income - Despite the sales decline, gross margin expanded by 630 basis points year over year to 53.9% [4]. - The company reported an operating loss of $16.3 million, improved from a $24 million loss in the prior-year quarter [5]. Regional and Segment Performance - Sales declined by 21% in Europe, 18% in the Americas, and 13% in Asia on a constant currency basis [6]. - Direct-to-consumer sales fell 27%, driven by a 20% drop in comparable retail sales [6]. Product Category Performance - Traditional watch sales declined 10% in constant currency, while leather goods and jewelry sales dropped 37% and 19%, respectively [7]. Cost Management and Efficiency - Operating expenses decreased 10.5% year over year to $200.9 million, with SG&A expenses falling 17% to $172.1 million [8]. - The company aims to achieve $100 million in SG&A savings through various restructuring initiatives [17]. Turnaround Strategy - CEO Franco Fogliato outlined a three-pronged turnaround strategy focusing on core business refocusing, cost reduction, and balance sheet strengthening [10]. - The plan includes closing approximately 50 retail stores in 2025 and transitioning select international markets to a distributor model [11]. Leadership Changes - Fossil announced the hiring of Randy Greben as CFO, effective March 17, 2025, as part of its efforts to return to profitable growth [12]. Future Outlook - The company provided a cautious outlook for fiscal 2025, expecting net sales to decline in the mid-to-high teens and anticipating a $45 million revenue impact from store closures [16].

Financial Performance - Total net sales for fiscal year 2024 were $1,144,990, a decrease of 19% compared to $1,412,384 in 2023[341]. - Gross profit for 2024 was $597,151, down from $679,581 in 2023, reflecting a gross margin decline[341]. - Operating loss for 2024 was $(103,947), an improvement from $(143,024) in 2023[341]. - Net loss attributable to Fossil Group, Inc. for 2024 was $(102,671), compared to $(157,088) in 2023, indicating a reduction in losses[341]. - Total current assets decreased to $554,515 in 2024 from $710,690 in 2023, a decline of approximately 22%[338]. - Total assets decreased to $763,567 in 2024 from $978,030 in 2023, representing a decline of about 22%[338]. - Total stockholders' equity fell to $136,724 in 2024 from $251,738 in 2023, a decrease of approximately 46%[338]. - Cash and cash equivalents increased to $123,598 in 2024 from $117,197 in 2023, showing a growth of about 5.5%[338]. - The company reported a restructuring expense of $59,781 in 2024, up from $43,279 in 2023, indicating increased costs related to restructuring efforts[341]. - Net income for fiscal year 2024 was a loss of $106.276 million, an improvement from a loss of $156.659 million in fiscal year 2023[347]. - Total consolidated revenue for Fiscal Year 2024 was $1,144.99 million, a decrease of 19% from $1,412.38 million in Fiscal Year 2023[388]. - Traditional watches revenue decreased to $872.65 million in Fiscal Year 2024 from $1,015.08 million in Fiscal Year 2023, representing a decline of 14%[388]. - Smartwatches revenue dropped significantly to $24.88 million in Fiscal Year 2024 from $80.95 million in Fiscal Year 2023, a decrease of 69%[388]. Operational Risks - The company faces numerous operational risks, including potential supply chain disruptions and the ability to develop innovative products[19]. - The company is highly leveraged, which may adversely affect its financial condition and ability to meet debt obligations[24]. - The company has experienced challenges related to inventory valuation, requiring significant management judgment regarding future demand and market conditions[331]. - The company is subject to risks related to competition from both traditional and online-only retailers, impacting its market position[24]. - The company’s operations are influenced by changing regulatory requirements and political scrutiny, particularly regarding ESG matters[19]. - The company’s financial performance may be impacted by fluctuations in raw material prices and inflation[24]. Cash Flow and Debt Management - Net cash provided by operating activities was $46.680 million in fiscal year 2024, compared to a cash used of $59.459 million in fiscal year 2023[347]. - Total debt borrowings in fiscal year 2024 amounted to $115.702 million, while debt payments were $159.495 million[347]. - Cash and cash equivalents at the end of fiscal year 2024 were $126.592 million, up from $121.583 million at the end of fiscal year 2023[347]. - The Company had net payments of $46.1 million under the Revolving Facility during fiscal year 2024, with available borrowing capacity of approximately $53.4 million as of December 28, 2024[424]. - Total debt decreased from $212.6 million as of December 30, 2023, to $168.1 million as of December 28, 2024, representing a reduction of approximately 21%[410]. - The Company’s long-term debt as of December 28, 2024, was $165.9 million, down from $212.1 million in the previous year[410]. - Interest expense related to the Notes and Revolving Facility amounted to $10.4 million and $2.3 million, respectively, during fiscal year 2024[424]. Restructuring and Strategic Plans - The Turnaround Plan aims to achieve approximately $100 million in SG&A cost savings in fiscal 2025 compared to fiscal 2024, with $50 million in total charges expected, of which $7 million was incurred in fiscal 2024[484]. - The TAG plan achieved annualized operating income benefits of $280 million over fiscal years 2023 and 2024, with $125 million in fiscal 2023 and $155 million in fiscal 2024[488]. - In fiscal year 2024, the Company incurred restructuring charges of $60,542 million under the TAG plan, compared to $48,816 million in fiscal year 2023[489]. - The Company plans to close approximately 50 retail stores as part of its restructuring efforts[484]. - The Turnaround Plan focuses on refocusing on core operations, rightsizing the cost structure, and strengthening the balance sheet[484]. - The Company expects to identify additional cost-reduction opportunities that may generate incremental savings in 2025[484]. Tax and Deferred Tax Assets - The provision for income taxes for fiscal year 2024 was $(11.8) million, a significant decrease from a provision of $522,000 in 2023[430]. - The effective tax rate for fiscal year 2024 was 10.0%, influenced by the release of reserves for uncertain tax positions[431]. - The total valuation allowance against deferred tax assets was $226.5 million, with $149.6 million related to U.S. operations and $76.8 million to foreign operations[432]. - The Company has $460.5 million of undistributed earnings and profits from foreign subsidiaries that are planned to be reinvested outside the U.S.[433]. - Unrecognized tax benefits totaled $6.8 million for fiscal year 2024, down from $23.6 million in 2023[434]. - The Company recorded $2.1 million of unrecognized tax benefits that could be settled within the next twelve months as of December 28, 2024[436]. Inventory and Asset Management - The company reported a decrease in inventories to $58.638 million in fiscal year 2024 from $125.766 million in fiscal year 2023[347]. - Total inventories decreased to $178.58 million in Fiscal Year 2024 from $252.83 million in Fiscal Year 2023, reflecting a reduction of 29%[391]. - Prepaid expenses and other current assets decreased to $90.18 million in Fiscal Year 2024 from $152.72 million in Fiscal Year 2023, a decline of 41%[393]. - Property, plant, and equipment-net decreased to $41.57 million in Fiscal Year 2024 from $57.24 million in Fiscal Year 2023, a reduction of 27%[394]. - The company had no material contract assets and reported contract liabilities of $2.1 million related to gift cards as of December 28, 2024[388]. Shareholder and Stock Information - The Company had $20.0 million of repurchase authorizations remaining under its common stock repurchase plan as of December 28, 2024[450]. - The Company did not issue stock options, stock appreciation rights, and performance stock appreciation rights in fiscal years 2024, 2023, and 2022[457]. - The total fair value of shares/units vested during fiscal years 2024, 2023, and 2022 was $0.9 million, $2.6 million, and $9.4 million, respectively[458].

Financial Performance - Fourth quarter worldwide net sales were $342 million, down 19% on a reported basis and 18% in constant currency compared to $421.3 million in Q4 2023[5]. - Full year 2024 net sales totaled $1.1 billion, a decrease of 18.9% on a reported basis compared to $1.4 billion in 2023[12]. - For the 13 weeks ended December 28, 2024, net sales were $342.3 million, a decrease of 18.7% compared to $421.3 million for the same period in 2023[21]. - The Americas segment reported net sales of $164.2 million for the 13 weeks ended December 28, 2024, down from $203.7 million in the prior year[24]. Profitability and Loss - Fourth quarter adjusted operating income was $20.1 million, or 5.9% of net sales, compared to an adjusted operating loss of $8.5 million in Q4 2023[12]. - Full year 2024 net loss totaled $102.7 million with loss per diluted share of $1.94, compared to a net loss of $157.0 million and loss per diluted share of $3.00 in the prior year[16]. - Operating income for the 13 weeks ended December 28, 2024, was a loss of $16.3 million, compared to a loss of $24.0 million for the same period in 2023[21]. - Fiscal 2024 total income (loss) before income taxes was $(118.1) million, compared to $(156.1) million in Fiscal 2023, showing an improvement of 24.4%[27]. - Adjusted EBITDA for Fiscal 2024 was $(11.6) million, while Fiscal 2023 reported $(62.6) million, indicating a significant improvement[27]. - Operating income (loss) for the 52 weeks ended December 28, 2024, was $(34.3) million, compared to $(92.0) million for the same period in 2023, reflecting a 62.7% improvement[30]. - The company reported a diluted earnings (loss) per share of $(1.94) for the 52 weeks ended December 28, 2024, compared to $(3.00) for the same period in 2023, indicating a reduction in losses[30]. Cost Management and Savings - The company expects SG&A savings of approximately $100 million in 2025 versus 2024, driven by workforce reduction and store closures[6]. - The company incurred restructuring expenses totaling $59.8 million in Fiscal 2024, compared to $43.3 million in Fiscal 2023[27]. - Interest expense for Fiscal 2024 was $19.0 million, slightly lower than $21.8 million in Fiscal 2023[27]. Inventory and Assets - Inventory at year-end was $178.6 million, representing a decrease of 29.4% versus a year ago[5]. - Total current assets decreased to $554.5 million in 2024 from $710.7 million in 2023, primarily due to a reduction in inventories[22]. - Total assets decreased to $763.6 million in 2024 from $978.0 million in 2023, reflecting a decline in both current and long-term assets[22]. Future Outlook - The company anticipates worldwide net sales decline in the range of mid to high teens for 2025[17]. - Adjusted operating income margin for 2025 is expected to be in the negative low single digits[17]. - The company is focusing on enhancing its product offerings, particularly in smartwatches, which saw a notable increase in sales[24]. - The company plans to continue its market expansion efforts despite the store closures, focusing on strategic locations and new product development[31]. Store Operations - The total number of stores decreased from 302 on December 30, 2023, to 248 on December 28, 2024, with 59 stores closed during the year[31]. - The Americas region saw a reduction of 29 stores, ending with 114 stores by December 28, 2024[31]. Margin Improvement - Fourth quarter gross margin expanded 630 basis points to 53.9% due to improved product margins and exit from the smartwatch category[5]. - Gross profit for the 13 weeks ended December 28, 2024, was $184.6 million, resulting in a gross margin of 53.9%, up from 47.6% in the prior year[21]. - The operating margin for the 52 weeks ended December 28, 2024, was (3.0)%, an improvement from (10.1)% in the previous year[30].

Core Insights - Fossil Group, Inc. reported better-than-expected fourth quarter results, achieving an adjusted operating profit of $20 million, indicating that business performance improvement initiatives are gaining traction [4] - The company has introduced a comprehensive turnaround plan focusing on refocusing on core initiatives, rightsizing the cost structure, and strengthening the balance sheet [5] - For 2025, the company expects to achieve SG&A savings of approximately $100 million compared to 2024, alongside a strategic review of its business model and capital structure [5][6] Financial Performance - Fourth quarter worldwide net sales were $342 million, down 19% on a reported basis and 18% in constant currency, with declines across all regions and channels [6][10] - The fourth quarter gross margin expanded by 630 basis points to 53.9%, primarily due to improved product margins and the exit from the smartwatch category [6][10] - Fourth quarter SG&A expenses were $172.1 million, down 17% compared to the same quarter in 2023, reflecting efficiencies from the TAG Plan [6][10] - The company reported a fourth quarter operating loss of $16.3 million, with an adjusted operating income of $20.1 million, translating to an adjusted operating margin of 5.9% [6][10] Long-Term Financial Targets - For the full year 2027, the company aims for worldwide net sales exceeding $800 million and an adjusted operating income margin in the mid-single-digit range [9][18] - The company anticipates a continued decline in worldwide net sales in the mid to high teens for 2025, with an adjusted operating income margin expected to be in the negative low single digits [18] Balance Sheet and Liquidity - As of December 28, 2024, the company had total liquidity of $177 million, including cash and cash equivalents of $124 million [6][14] - Year-end inventory was $178.6 million, representing a decrease of 29.4% compared to the previous year [6][14] Strategic Initiatives - The turnaround plan includes launching a new FOSSIL brand platform, optimizing the global wholesale footprint, and closing approximately 50 retail stores [5] - The company is concluding its TAG Plan, which generated annualized operating income benefits of $280 million over two years [5]

Group 1 - Fossil Group, Inc. will report its fourth quarter and full year 2024 financial results on March 12, 2025, after market close [1] - A conference call to discuss the financial results will take place at 5:00 p.m. ET on the same day, accessible via the company's investor relations website [1] - The call will be archived for replay after the live session [1] Group 2 - Fossil Group, Inc. specializes in lifestyle accessories, including watches, jewelry, handbags, small leather goods, belts, and sunglasses [2] - The company operates a diverse portfolio of owned and licensed brands, such as Fossil, Michele, Relic, Skagen, Zodiac, Armani Exchange, Diesel, Emporio Armani, kate spade new york, Michael Kors, Skechers, and Tory Burch [2] - Fossil Group is committed to design and innovation, supported by an extensive distribution network across various geographies and channels [2]

Core Points - Fossil Group has extended its licensing agreement with Michael Kors until 2027, allowing Fossil to continue designing and innovating Michael Kors watches and jewelry [1][2] - The partnership has been valued by both companies, with Fossil Group's CEO expressing honor in the long-term relationship and looking forward to future opportunities [2] - Michael Kors' CEO also emphasized the importance of the partnership, highlighting Fossil Group as a valued collaborator for many years [2] Company Overview - Fossil Group, Inc. specializes in lifestyle accessories, including watches, jewelry, handbags, and more, under a diverse portfolio of owned and licensed brands [4] - The company is committed to delivering high-quality design and innovation across its brands, which include both owned brands like Fossil and licensed brands such as Michael Kors [4] - Michael Kors is a luxury designer brand known for its range of products, including accessories and ready-to-wear items, with a strong presence in prestigious cities and a robust digital platform [5]