Fossil Group(US:FOSL)2025-03-12 20:31Financial 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].