Financial Data and Key Metrics Changes - Q4 sales were $712 million, down 10% year-over-year and 9% in constant currency, primarily due to challenges in U.S. wholesale and older generation connected product performance [29][30] - Gross margin for Q4 was 43.3%, reflecting a decline of 970 basis points from the previous year, with a significant portion attributed to a $38 million inventory write-down [32][34] - The company reported a net loss of $0.14 per diluted share for Q4, compared to an EPS of $0.94 in the prior year [34] Business Line Data and Key Metrics Changes - Watches category sales declined 8% in constant currency, with traditional watch sales down low single digits and connected watch sales decreasing double digits [32] - The direct-to-consumer business saw retail comp sales decrease by 3%, with full-price comps down high single digits [31] Market Data and Key Metrics Changes - Asia delivered double-digit growth, with mainland China growing 61% and India growing 10%, while the Americas experienced a 16% sales decline [30][11] - E-commerce marketplaces in the U.S. partially offset declines in traditional wholesale channels [30] Company Strategy and Development Direction - The company is focusing on four strategic priorities for 2020: exceptional storytelling and innovation, driving commercial transformation, expanding opportunities in China and India, and implementing New World Fossil 2.0 [20][23][24] - The company plans to pivot its model by deploying resources to direct channels, accelerating connected product offerings, and strengthening operations to build scale [17][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges in the traditional wholesale channel and emphasized the need to optimize the cost structure while focusing on growth areas [25][36] - The company expects full-year sales to decline between 11.5% and 4.5%, with continued double-digit growth anticipated in Asia and modest growth in the direct-to-consumer channel [36][37] Other Important Information - The company ended 2019 with $200 million in cash and cash equivalents and virtually no net debt, maintaining a low net leverage ratio of 0.8x [35] - The company is prioritizing production for key products and expects factories in China to be at full speed by the end of March [62] Q&A Session Summary Question: What is the outlook for Asia in Q1 given the virus headwinds? - Management expects the APAC region to be down low double digits overall due to the impact of the virus [44] Question: What is the outlook for wearables in Q1 and throughout the year? - The company anticipates a decline in wearables for the full year, with a focus on key brands and distribution rationalization [45] Question: Can you provide details on the wholesale channel and product assortment changes? - Management expects trends in the wholesale channel to continue, with significant challenges in the Americas and modest contractions in AMEA [58] Question: What is the status of factories and component parts in light of the coronavirus? - Factories are coming back online, with an estimated capacity of about 50%, expected to reach full speed by the end of March [62]

Financial Data and Key Metrics Changes - Third quarter sales decreased 11% to $539 million, with a 10% decline in constant currency [22] - Gross margin decreased by 200 basis points to 51.6%, impacted by inventory obsolescence reserves and higher inventory costs [29] - Net loss reported at $0.51 per diluted share, including restructuring and impairment charges [34] Business Line Data and Key Metrics Changes - Connected watch sales represented $71 million or 16% of total watch sales, declining double digits due to reduced liquidation levels [28] - Traditional watch sales improved sequentially, with a low-single digit decline compared to previous quarters [27] - Direct-to-consumer retail comp sales decreased 2%, with e-commerce comps up double digits internationally [25] Market Data and Key Metrics Changes - Sales in Asia grew 9%, driven by strong performance in mainland China and India, while the Americas and EMEA regions saw double-digit declines [23][24] - Overall sales in the Americas declined 18%, primarily due to wholesale and off-price channels [24] - Europe experienced a 16% decline in sales, driven by the wholesale channel [24] Company Strategy and Development Direction - The company is focusing on emerging markets, direct channels, and connected watches to change the sales trajectory [20] - Investments in e-commerce and direct-to-consumer initiatives are expected to drive future growth [10][20] - The company aims to leverage partnerships with Google and Qualcomm to enhance connected watch offerings [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging consumer environment in the mid-priced fashion watch category, particularly in developed markets [8] - There is a cautious outlook for Q4, with lowered sales expectations due to ongoing challenges in the wholesale channel [19] - Management remains optimistic about long-term growth opportunities in emerging markets and digital channels [20] Other Important Information - The company has closed 44 stores since the third quarter of last year, ending with 454 stores [26] - Inventory increased by 9% in the quarter, attributed to lower sales levels [36] - The company has improved its net debt position by over $40 million, with debt levels down to $264 million [37] Q&A Session Summary Question: Trajectory of smartwatches and implications of Google acquisition - Management expressed optimism about Gen 5 smartwatch performance but noted a slowdown in older models, planning to adjust pricing strategies [50] - The acquisition of Fitbit by Google is seen as a positive development for the wearable category, enhancing product offerings [54] Question: Performance of Michael Kors brand - The Michael Kors business has been declining, but there are efforts to introduce new ideas and innovations to drive growth, especially in Asia [56] Question: Inventory of older generation watches - Management indicated that inventory levels are manageable, with minor promotional pressure expected as older models are sold through [59] Question: Wholesale channel performance - The wholesale channel is facing challenges, particularly in the Americas, but there are productive conversations with partners to improve performance [61] Question: Clarification on Q4 guidance and tariff impacts - Management provided insights on the expected $10 million impact from tariffs in Q4 and a projected $5 million to $10 million impact for 2020, with plans to mitigate future tariff effects [66]

Financial Data and Key Metrics Changes - In Q2 2019, the company reported a net loss of $7 million, an improvement from a net loss of $8 million in the same quarter last year, with a reported loss of $0.15 per diluted share [24][25] - Sales decreased 13% to $501 million, with a constant currency decrease of 11%, showing a sequential improvement of four percentage points from Q1 [25][26] - Gross profit decreased to $265 million, and gross margin decreased by 70 basis points to 52.9%, primarily due to unfavorable currency impacts [33] Business Line Data and Key Metrics Changes - The watch business declined 8% in constant currency, with traditional watch sales improving from a double-digit decline to a high-single-digit decline [29] - Connected watch sales represented 21% of total watch sales for the quarter, with sales of newer generation connected display products increasing over 20% [29][30] - Direct business continued to contract, improving to a moderate single-digit decline compared to a double-digit decline in Q1 [28] Market Data and Key Metrics Changes - In the Americas, Q2 sales decreased 20% to $223 million, improving from a 24% decrease in Q1 [30] - In Europe, reported sales decreased 16% to $147 million, with a constant dollar decline of 12%, showing improvement from a 19% decrease in Q1 [31] - Asia reported a sales increase of 4% on $126 million, with underlying core sales in Asia growing low double digits [32] Company Strategy and Development Direction - The company is focused on improving profitability, driving product innovation, maximizing top-line growth, and transforming its business model [12][19] - The New World Fossil program aims to deliver $200 million of run rate profitability improvements over three years, with a focus on digital marketing capabilities and product innovation [18][19] - The company is investing in direct-to-consumer (DTC) and digital capabilities while streamlining its model to react more quickly to trends [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that while sales trends remain challenging, there are underlying positive signs in parts of the business [9] - The company expects sales trends to materially improve in the second half of the year, driven by positive sales trends in Asia and strong growth in display watches [46] - Management remains focused on transforming the company to unlock significant potential for future growth [21] Other Important Information - The company has closed 51 stores since the second quarter of last year, ending the quarter with 456 stores [28] - The estimated gross exposure from a potential 10% tariff is approximately $5 million to $10 million, primarily impacting smartwatches [43] Q&A Session Summary Question: Transition from old parts to new product in smartwatches - Management highlighted the focus on customer experience and innovation in the new Gen 5 smartwatch, with strong initial sales and positive consumer response [51][53] Question: Stabilization of the traditional watch business - Management noted improvements in Asia and ongoing efforts to innovate and introduce new products, with expectations for future growth despite current challenges in the U.S. market [55][56] Question: Outlook for the wearables business and Michael Kors performance - Management maintained a modest growth forecast for the wearables business, with challenges in the Michael Kors watch brand due to a cooling women's fashion market [60][62]

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) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 29, 2018 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 0-19848 FOSSIL GROUP, INC. (Exact name of regi ...