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Fossil Group, Inc. Reports Fourth Quarter and Full Year 2024 Results
FOSLFossil Group(FOSL) GlobeNewswire·2025-03-12 20:05

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 342million,down19342 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 16.3million,withanadjustedoperatingincomeof16.3 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 800millionandanadjustedoperatingincomemargininthemid−single−digitrange[9][18]−Thecompanyanticipatesacontinueddeclineinworldwidenetsalesinthemidtohighteensfor2025,withanadjustedoperatingincomemarginexpectedtobeinthenegativelowsingledigits[18]BalanceSheetandLiquidity−AsofDecember28,2024,thecompanyhadtotalliquidityof800 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 124million[6][14]−Year−endinventorywas124 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]