Fossil Group, Inc. Reports Third Quarter 2025 Financial Results

Core Insights - Fossil Group, Inc. reported a third quarter 2025 net sales of $270 million, reflecting a decrease of 6.1% year-over-year on a reported basis and 7.1% in constant currency [1][5] - The company experienced an operating loss of $22 million with an operating margin of (8)%, while the constant currency adjusted operating loss was $15 million with a margin of (6)% [2][5] - The CEO highlighted the successful transformation of the balance sheet as a pivotal milestone in the company's turnaround strategy, aiming for long-term profitable growth [4] Financial Performance - Net sales for Q3 2025 were $270.2 million, down from $287.8 million in Q3 2024, with a notable decline in direct-to-consumer sales by 27% [5][6] - Gross profit was $132.4 million, a decline of 6.9% from $142.2 million in the previous year, with a gross margin of 49.0% [5][6] - Operating expenses totaled $154.1 million, down 7.5% from $166.7 million a year ago, with SG&A expenses decreasing by 8.8% [5][6] Balance Sheet and Liquidity - As of October 4, 2025, the company had total liquidity of $101.9 million, including $79.2 million in cash and cash equivalents [6][8] - The company completed a balance sheet transformation, extending the maturity of its debt by three years and securing $32.5 million in new financing [7][8] Market and Sales Trends - The sales decline was primarily driven by direct-to-consumer channels, with comparable retail sales down 22% [5][6] - In terms of geographical performance, net sales in constant currency declined by 9% in the Americas and 10% in Europe, while Asia saw a 2% increase [5][6] - Major product categories saw significant declines, with traditional watch sales down 1%, leathers down 37%, and jewelry down 23% in constant currency [5][6] Future Outlook - The company reiterated its financial guidance for the full year 2025, expecting worldwide net sales to decline in the mid-teens [9][14] - Adjusted operating margin guidance is projected to be break-even to slightly positive [14]