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 ...

Financial Performance - Net sales for fiscal year 2022 were $1,682,439, a decrease of 10.0% from $1,870,036 in 2021[336]. - Gross profit for 2022 was $830,679, down from $966,374 in 2021, reflecting a gross margin decline[336]. - Operating loss for 2022 was $(1,473), compared to an operating income of $92,637 in 2021[336]. - Net loss attributable to Fossil Group, Inc. for 2022 was $(44,157), a significant decline from a net income of $25,434 in 2021[336]. - The company reported a total comprehensive loss of $(52,569) for 2022, compared to a comprehensive income of $18,249 in 2021[336]. - Basic earnings per share for 2022 were $(0.85), down from $0.49 in 2021[336]. - Fossil Group reported a net loss of $43.526 million for fiscal year 2022, compared to a net income of $26.624 million in 2021 and a net loss of $95.940 million in 2020[342]. - Total revenue for fiscal year 2022 was $1,682,439,000, a decrease from $1,870,036,000 in fiscal year 2021, representing a decline of approximately 10.0%[382]. - Consolidated net sales for fiscal year 2022 were $1,682,439, a decrease of 10.0% from $1,870,036 in fiscal year 2021[473]. Assets and Liabilities - Total current assets decreased to $945,300 in 2022 from $1,022,755 in 2021, a reduction of approximately 7.6%[333]. - Total assets decreased to $1,238,128 in 2022 from $1,368,719 in 2021, a decline of about 9.5%[333]. - Total current liabilities decreased to $425,920 in 2022 from $535,647 in 2021, a reduction of approximately 20.5%[333]. - The company had a total stockholders' equity of $403.009 million at the end of 2022, down from $440.032 million at the end of 2021[341]. - Total debt borrowings increased to $386.067 million in 2022, up from $254.717 million in 2021[342]. - The Company had total debt outstanding as of December 31, 2022, was $216.4 million, with principal amounts repayable of $223.3 million[420]. - The Company had deferred income tax assets totaling $197.1 million and deferred income tax liabilities totaling $37.1 million as of December 31, 2022[422]. Cash Flow and Expenses - The company experienced a net cash used in operating activities of $110.856 million in 2022, compared to a net cash provided of $50.029 million in 2021[342]. - Cash paid for interest in fiscal year 2022 was $17.5 million, an increase from $16.1 million in 2021 and a decrease from $21.2 million in 2020[460]. - The company reported cash paid for income taxes, net of refunds, of $5.8 million in 2022, compared to a refund of $16.7 million in 2021[460]. - The company incurred stock-based compensation expenses of $8.060 million in 2022, compared to $9.497 million in 2021[342]. - Operating lease costs for fiscal year 2022 were $76,528,000, down 12% from $86,994,000 in fiscal year 2021[435]. Inventory and Sales - Inventory at the end of fiscal year 2022 totaled $376,028,000, an increase from $346,850,000 in fiscal year 2021[385]. - The company’s finished goods inventory increased to $355,030,000 in fiscal year 2022 from $323,180,000 in fiscal year 2021[385]. - Fossil Group's consolidated net sales from licensed products accounted for 46.5% of total sales in 2022, down from 50.5% in 2021[348]. - Revenue from traditional watches in the Americas was $518,995,000, while smartwatches generated $65,649,000, contributing to a total of $584,644,000 for watches in the Americas[382]. - Traditional watches accounted for 68.9% of total net sales in fiscal year 2022, generating $1,158,889, while smartwatches contributed 9.0% with $151,602[473]. Foreign Currency and Interest Rate Risks - The company reported a significant exposure to foreign currency exchange rate risks, particularly with the euro and Chinese yuan, which could materially impact supply channels and manufacturing costs[313]. - A 10% unfavorable change in the U.S. dollar against foreign currencies would decrease net pre-tax income by approximately $13.7 million and reduce consolidated stockholders' equity by about $37.3 million[316][317]. - As of December 31, 2022, a 100 basis point increase in interest rates would increase annual interest expense by approximately $0.7 million[318]. - The company employs forward contracts to manage foreign currency risks, with no significant changes anticipated in its exposure management strategies[314]. - The Company had forward contracts designated as cash flow hedges with a total amount of $1,070.5 million in Japanese yen and $337.6 million in Mexican pesos as of December 31, 2022[393]. Operational Risks and Strategies - The company has no long-term contracts with customers, facing intense competition in both specialty retail and e-commerce sectors[23]. - The company is subject to risks from supply chain disruptions due to changes in U.S. trade policy with China and the ongoing impacts of the COVID-19 pandemic[19]. - The company’s ability to grow sales is dependent on its business strategy and consumer acceptance of new products and technologies[19]. - The company has a significant reliance on its license agreements for globally recognized fashion brand names, which could impact its operations if lost[19]. - The TAG Plan is expected to generate estimated annualized benefits of at least $100 million by the end of 2024, with an approximate 8% reduction in the global workforce in 2023[479]. Segment Performance - The company evaluates its reportable segments based on net sales and operating income, with segments including Americas, Europe, and Asia[468]. - Operating income for the Americas segment in fiscal year 2022 was $116,401, down from $157,012 in fiscal year 2021, representing a decline of 26.0%[470]. - Net sales from the United States in fiscal year 2022 were $619,981, a decrease from $682,900 in fiscal year 2021, reflecting a decline of 9.2%[474]. - Net sales from Germany were approximately $194.1 million in fiscal year 2022, accounting for more than 10% of consolidated net sales[477]. Tax and Deferred Tax Assets - The Company recorded $58.6 million of deferred tax assets for net operating losses of foreign subsidiaries as of December 31, 2022[423]. - The total valuation allowance against deferred tax assets was $143.3 million at December 31, 2022, with $75.5 million attributable to U.S. operations and $67.8 million to foreign operations[427]. - The Company had unrecognized tax benefits of $24.0 million as of December 31, 2022, which could favorably impact the effective tax rate if recognized[429]. - The balance of unrecognized tax benefits decreased from $29,833,000 in 2022 to $23,998,000 in 2022, reflecting a reduction of approximately 19.4%[431].

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 ...

Fossil Group, Inc. (NASDAQ:FOSL) Q4 2021 Earnings Conference Call March 9, 2022 5:00 PM ET Company Participants Christine Greany - The Blueshirt Group LLC, Investor Relations Kosta Kartsotis - Chairman and CEO Jeff Boyer - Chief Operating Officer Sunil Doshi - Chief Financial Officer Greg McKelvey - Executive Vice President and CCO Conference Call Participants Operator Good afternoon, ladies and gentlemen. And welcome to the Fossil Group Fourth Quarter and Full Year 2021 Earnings Call. At this time, all par ...