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]

Core Insights - Fossil Group has appointed Joe Martin as Chief Commercial Officer and Antonio Carriero as Chief Digital Information Officer and General Manager of EMEA, effective February 12 and February 17, respectively, to drive a business turnaround and return to profitable growth [1][2][5] Group 1: Leadership Appointments - Joe Martin will oversee all global revenue-generating activities, focusing on building a scalable, high-performing commercial organization, with a strong background in sales and operations from Adidas and 3M [2][3] - Antonio Carriero will manage the global technology strategy, operations, and cybersecurity, while also leading the commercial business for the EMEA region, bringing extensive experience in digital transformation from his previous roles at Salomon, Breitling SA, and Richemont Group [4][5] Group 2: Strategic Focus - The appointments are part of Fossil's strategy to enhance its watch business and create long-term value for stakeholders, emphasizing the importance of sustainable, long-term results [5] - Both leaders are expected to leverage their expertise to advance Fossil's turnaround strategy and drive growth in the luxury and consumer goods sectors [5][6]

Core Insights - The event "Macroeconomics and Climate" focused on aligning economic systems with environmental sustainability amidst climate change and economic instability [1][2] - EBC Financial Group's involvement highlights the urgency of integrating financial markets with academic research to tackle climate and economic challenges [4] Group 1: Event Overview - The session featured a keynote by Associate Professor Andrea Chiavari and a panel discussion moderated by Associate Professor Banu Demir Pakel, discussing the balance between economic growth and climate resilience [2][5] - Panellists included experts from the Environmental Change Institute and EBC Financial Group, providing practical insights on policy, finance, and societal impact [2][8] Group 2: Economic and Environmental Interplay - Dr. Chiavari emphasized the economic costs of climate change, linking the growth of global GDP since the industrial revolution to the environmental toll of fossil fuel consumption [5][6] - The concept of the social cost of carbon was highlighted as essential for shaping effective policies, advocating for carbon taxation as both an environmental and economic necessity [7][16] Group 3: Opportunities and Challenges - Dr. Ranger pointed out that climate action presents economic opportunities, such as job creation and growth, while advocating for redirecting fossil fuel subsidies, estimated at $5 to $7 trillion annually, towards green investments [10][18] - Barrett discussed the need for aligning market incentives with sustainability goals, stressing that financial markets require enforceable regulatory frameworks to drive meaningful climate action [11][19] Group 4: Role of Governments and Individuals - Dr. Demir Pakel stressed the importance of government-led education and awareness initiatives to drive climate action, highlighting the need for policies that incentivize both the private sector and consumer behavior [15][16] - The panelists collectively called for a shift in public narrative to emphasize the economic benefits of climate action, urging governments to lead this change [17][20]

Core Insights - Fossil Group, Inc. reported an adjusted net loss per share of 51 cents for Q3 2024, an improvement from a loss of 93 cents per share in the same period last year [1] - Revenues decreased by 16.4% to $287.8 million from $344.1 million year-over-year, influenced by strategic exits from the smartwatch segment and retail closures [1][15] Financial Performance - Gross margin improved to 49.4%, up from 47% in the previous year, primarily due to the Transform and Grow (TAG) Plan [9] - Operating expenses decreased by 20% to $166.7 million from $208.1 million, reflecting efficiencies from the TAG Plan [10] - The operating loss narrowed to $24.5 million from $46.4 million year-over-year, with adjusted operating loss also improving to $18.7 million from $31.1 million [11] Sales Performance - Sales in the Americas fell to $121.3 million, a 20% decline in constant currency [4] - European sales dropped to $97 million, an 11% year-over-year decline in constant currency [5] - Asia reported $69 million in sales, marking a 17% decrease in constant currency [6] - Total watch sales decreased to $227.2 million from $270 million, with traditional watch sales down 12% in constant currency [7] Strategic Initiatives - The TAG Plan aims for $300 million in annualized operating income benefits by 2025, with $125 million achieved in 2023 and at least $100 million expected in 2024 [3] - Fossil's strategic business review, initiated in March 2024, may lead to further operational adjustments, including cost reductions and debt refinancing [16] Balance Sheet Overview - As of September 28, 2024, Fossil held cash and cash equivalents of $106.3 million, down from $116.1 million a year earlier [13] - Total assets decreased to $812.4 million from $1.1 billion, while long-term debt reduced to $173.4 million from $255.9 million [13] - Shareholders' equity fell significantly to $161.9 million from $278.8 million [14] Management Guidance - For 2024, Fossil projects net sales of around $1.1 billion, factoring in a $100 million negative impact from the smartwatch exit and store closures [15] - Adjusted operating margin is expected to be between (6)% and (8)%, with positive free cash flow anticipated due to tax refunds [15]

Financial Data and Key Metrics Changes - In Q2 2024, net sales totaled $260 million, down 19% on a constant currency basis, impacted by the exit from the smartwatch category and store closures [14][5] - Gross margin expanded by 390 basis points compared to the previous year, primarily due to improved product margins from TAG initiatives and a lower smartwatch mix [14][4] - SG&A expenses decreased by $34 million, representing an 18% reduction year-over-year, attributed to lower store operating costs and fewer stores [15][16] - Adjusted operating loss narrowed to $17 million, reflecting a 39% improvement from an adjusted operating loss of $28 million a year ago [16][14] Business Line Data and Key Metrics Changes - Traditional watches showed stabilization, with sales approximately flat globally, while Fossil traditional watches increased by 4% in DTC channels in Q2 [11][5] - The licensed watch brands and leathers category, which represents about half of revenue, faced pressure due to brand repositioning and soft consumer demand, particularly in China [6][5] - Sales in India increased by double digits compared to last year, indicating strong growth across virtually all brands [5][11] Market Data and Key Metrics Changes - The wholesale channel in the US and Europe remains challenging, with soft consumption sentiment noted in China [5][4] - About half of the sales base is beginning to stabilize, with Q1 performance flat and Q2 results down about 4% [5][4] Company Strategy and Development Direction - The company is focused on four core priorities: advancing the Transform and Grow (TAG) Plan, strengthening the balance sheet, stabilizing the business, and conducting a strategic review of the business model [7][8] - The TAG Plan aims to achieve at least $100 million of annualized benefits in 2024, with total expected benefits of $300 million [8][9] - A shift to a globally led operating model with regional execution of consolidated brand strategies is a critical element of the TAG Plan [8][9] Management's Comments on Operating Environment and Future Outlook - Management expects sequential improvement in sales, gross margin, and adjusted operating margin for the remainder of 2024 [13][12] - The company remains on track to achieve net sales of approximately $1.2 billion for the full year, with an adjusted operating margin loss expected to range from negative 3% to negative 5% [17][13] - Management acknowledges the current business is not at its potential but remains focused on stabilizing and improving financial performance [18][12] Other Important Information - The company received a $57 million tax refund in Q2, which strengthened its liquidity position [10][17] - Total liquidity at the end of the quarter was $156 million, providing flexibility to execute the TAG Plan [17][10] Q&A Session Summary Question: What is being done to stabilize the top-line and when is growth expected? - The company is directing programs and funding towards key top-line opportunities, increasing upper funnel marketing programs to generate demand [19] Question: What is happening in the core traditional watch business? - About half of the traditional watch business performed consistently with industry trends, while other parts remain pressured due to softness in China and brand repositioning efforts [21] Question: Are there plans for equity or bond buybacks given liquidity levels? - The company believes current valuation levels do not reflect long-term potential but prioritizes maintaining financial flexibility over buybacks [22] Question: How many quarters of runway are there to execute the TAG plan? - Ample runway exists to execute the TAG plan, with most initiatives expected to complete by 2024 [23] Question: What is the status of potential refinancing out of upcoming debt maturity? - The company is assessing potential debt and equity financings and has retained a financial advisor for this process [24] Question: Can you explain the cash flow situation this year? - Seasonal working capital needs and projected sales decline will require operating cash use in the near term, but positive free cash flow is expected in Q4 [25]

Financial Performance - Second quarter worldwide net sales decreased to $260 million, down 19% on a reported basis and 18% in constant currency, impacted by the exit from the smartwatch category and retail store optimization[1] - Operating loss was $34 million compared to a loss of $35 million in the prior year, with an adjusted operating loss of $17 million compared to $28 million last year[2] - Net loss totaled $38.8 million with a net loss per diluted share of $0.73, compared to a net loss of $26.5 million and $0.51 per diluted share in the prior year[9] - The net loss attributable to Fossil Group, Inc. for the 13 weeks ended June 29, 2024, was $(38.8) million, compared to a net loss of $(26.5) million for the same period in 2023[15] - The company reported an adjusted EBITDA of $(29.3) million for Fiscal Q3 2023, compared to $(1.6) million in Q4 2022, indicating a significant decline[21] - The adjusted net income for the fiscal year was $(25.1) million, with a significant drop in performance compared to previous periods[24] Revenue and Sales - The company anticipates full year 2024 worldwide net sales of approximately $1.2 billion, reflecting consumer and channel softness, including a $100 million negative impact from the smartwatch exit[13] - Net sales for the 13 weeks ended June 29, 2024, were $260.0 million, a decrease of 19.3% compared to $322.0 million for the same period in 2023[15] - Total net sales for the Americas segment were $119.6 million for the 13 weeks ended June 29, 2024, down from $146.7 million in the same period last year[18] Cost Management and Expenses - SG&A expenses were $154 million, down 18% year-over-year, primarily due to lower compensation costs from efficiencies under the TAG Plan[2] - Total operating expenses for the 13 weeks ended June 29, 2024, were $170.9 million, representing 65.7% of net sales, compared to 59.6% in the same period last year[15] - Interest expense for Fiscal Q3 2023 was $5.8 million, slightly down from $5.9 million in Q4 2022, while total interest expenses for the fiscal year reached $20.7 million[21] - The company experienced a restructuring expense of $16.0 million in Fiscal Q3 2023, contributing to a total of $58.3 million for the fiscal year[21] Profitability and Margins - Gross margins expanded 390 basis points to 52.6%, reflecting progress under the TAG Plan[1] - Fiscal year adjusted operating margin is expected to be in the range of -3% to -5%[13] - The operating margin for the fiscal year was reported at (13.1)% of net sales, reflecting ongoing challenges in profitability[24] Strategic Initiatives - The TAG Plan is expected to generate additional annualized operating income benefits of at least $100 million in 2024, with restructuring costs estimated at $40 million for the fiscal year[11] - The company is conducting a strategic review of its business model and capital structure, which may include additional debt and equity financing options[12] - The company plans to continue its market expansion efforts despite the current challenges, focusing on new product development and technology advancements[21] Assets and Liquidity - Inventory totaled $202 million, a decrease of 38% versus a year ago, with total liquidity of $156 million at quarter end[2] - Total assets decreased to $785.7 million as of June 29, 2024, down from $1,073.4 million as of July 1, 2023[16] - Cash and cash equivalents decreased to $104.9 million as of June 29, 2024, compared to $132.1 million as of July 1, 2023[16] Store Operations - Store count decreased from 315 stores on July 1, 2023, to 258 stores by June 29, 2024, with 62 stores closed during this period[28] Product Development - The company is focused on innovation and expanding its product offerings, including traditional and smartwatches, which generated $202.5 million in sales for the 13 weeks ended June 29, 2024[18]

"On behalf of the Board and management team, I want to thank Sunil for his leadership and dedication over the past four years," said Jeffrey N. Boyer, Interim CEO. "We wish him well as he pursues the next chapter in his career." Fossil today said that it is affirming its 2024 outlook, including worldwide net sales of approximately $1.2 billion, adjusted operating margin1 in the range of -3% to -5% and positive free cash flow2, inclusive of tax refunds of approximately $57 million, which were received in the ...

Believe it or not, electric vehicles do outperform their fossil fuel counterparts in some ways. From the perspective of sheer performance, that most obviously manifests as dramatically faster acceleration times. EV stocks to buy also outperform their fossil fuel counterparts in several important ways. I'll explain that in more depth throughout the article but it essentially all boils down to pricing. The average cost of an electric vehicle was greater than $55,000 in April 2024. The average price for a new ...

Group 1: Rivian (RIVN) - Rivian is a leading American EV company with potential for significant growth, currently trading at a discount, making it an attractive investment opportunity [2] - The company is expanding its product line and is focused on the highly anticipated R2 model, alongside building a $5 billion production facility in Georgia to increase production capacity [2] - Rivian has over $10 billion in cash reserves, which provides financial stability and reduces bankruptcy risk, while its revenue has grown over 100% in the past year [9] Group 2: Li Auto (LI) - Li Auto is a prominent Chinese EV manufacturer specializing in SUVs, addressing the common issue of limited range in EVs with its range extenders [4] - The company plans to invest over 6 billion yuan to establish 5,000 charging stations, creating a new revenue stream and enhancing accessibility for consumers [4] - Li Auto reported a remarkable 270% year-over-year growth in revenue, reaching $34.7 billion, and maintains consistent profitability, reducing bankruptcy risk [10] Group 3: General Motors (GM) - General Motors is a major automotive manufacturer that has heavily invested in its EV segment, delivering over 75,000 EVs in 2023 and projecting production of 200,000 to 300,000 EVs in 2024 [6] - The company plans to invest $35 billion in EV development through 2024, positioning itself advantageously against smaller competitors [6] - GM sold approximately 6.2 million cars in 2023, generating nearly $140 billion in revenue, with a profit margin of about 7%, allowing for substantial R&D investment in EVs [11] Group 4: Industry Overview - The EV market is rapidly growing, with around 20% of cars sold in the U.S. being EVs, valued at $50 billion in 2022, and expected to grow at a compound annual growth rate of 15.5% from 2023 to 2032 [8]

Group 1 - Zacks Investment Research has initiated coverage of Fossil Group, Inc. with a "Neutral" recommendation, highlighting both potential and challenges for the company [1] - Fossil is implementing its Transform and Grow (TAG) plan, which has resulted in a 300-basis-point improvement in gross margins and a 20% reduction in operating expenses in Q1 2024, aiming for $100 million in annualized benefits this year [2] - The company's core segments, particularly traditional watches and jewelry, are showing signs of stabilization despite revenue pressures [3] Group 2 - Fossil's geographic footprint and diverse product mix are strengths, with a robust presence in growth markets like India helping to offset weaker performance in other regions [4] - The company is enhancing its digital capabilities and marketing strategies, particularly in the traditional watch category, to strengthen direct-to-consumer channels and customer engagement [5] - Fossil aims for positive free cash flow in 2024 and recently received a $57 million tax refund under the CARES Act, providing financial support for its strategic plans [6] Group 3 - Despite positive developments, Fossil faces challenges, including significant sales declines in key segments like licensed fashion watches and leather products, which account for over 40% of revenues [7] - The strategic exit from unprofitable retail locations and the smartwatch category is expected to reduce revenues by approximately $100 million in 2024 [7] - Fossil shares are trading significantly lower than the industry average, reflecting investor concerns amid ongoing restructuring efforts [8] Group 4 - The comprehensive analysis by Zacks Investment Research provides detailed insights into Fossil's strategic initiatives, market challenges, and financial outlook, making it a valuable resource for investors [9]