Core Insights - Fossil Group, Inc. reported a second quarter 2025 net sales of $220 million, a decrease of 15.2% compared to the same period in 2024, primarily due to category softness and a decline in smartwatch sales [5][11] - The company achieved a gross margin of 57.5%, an increase of 490 basis points year-over-year, attributed to improved product margins and reduced freight costs [5][11] - Operating income for the second quarter was $8 million, with an operating margin of 3.9%, marking a significant improvement from a loss of $34 million in the prior year [11][12] - Fossil Group announced a comprehensive refinancing plan aimed at strengthening its balance sheet and increasing liquidity [3][4] Financial Performance - Net sales for the second quarter totaled $220.4 million, down from $260 million in Q2 2024, with declines across all major regions: 19% in the Americas, 14% in Europe, and 12% in Asia [5][11] - Gross profit was $126.7 million, a decline of 7.4% from $136.9 million in the previous year, but gross margin improved to 57.5% from 52.6% [5][11] - Operating expenses decreased by 30.8% to $118.2 million, representing 53.7% of net sales compared to 65.7% in the prior year [5][6] Outlook and Guidance - The company raised its full-year 2025 financial guidance, reflecting strong year-to-date results and ongoing progress in its turnaround strategy [8][12] - Worldwide net sales are expected to decline in the mid-teens, an improvement from previous guidance of a decline in the mid to high teens [12] - Adjusted operating margin is anticipated to be break-even to slightly positive, compared to prior guidance of negative low single digits [12] Balance Sheet and Liquidity - As of July 5, 2025, Fossil Group had total liquidity of $110.6 million, including $109.9 million in cash and cash equivalents [7] - Total debt stood at $179 million, with inventories decreasing by 11.9% to $178.1 million compared to the previous year [7][11]

Core Viewpoint - Fossil Group, Inc. has announced the refinancing of its asset-based lending (ABL) and entered into a Transaction Support Agreement to exchange its outstanding notes, positioning the company for future growth with a stronger balance sheet [1][2]. Group 1: Transaction Details - The Transaction Support Agreement allows holders of Unsecured Notes to participate in a New Money Investment, which is backed by Consenting Noteholders who own approximately 59% of Fossil's 7.00% Senior Notes due 2026 [2][7]. - The company has established a new $150 million asset-based revolving credit facility with Ares Management Credit funds, maturing on August 13, 2030, priced at SOFR plus 500 basis points [7]. - Noteholders can exchange their Unsecured Notes for new First-Out Senior Secured Notes or Second-Out Senior Secured Notes, along with warrants for common stock [8]. Group 2: Restructuring Conditions - If less than 90% of the outstanding principal amount of Unsecured Notes is tendered, the company may proceed with restructuring through the Companies Act 2006 of England and Wales, potentially eliminating all Unsecured Notes [3].

Core Insights - Fossil Group, Inc. has appointed Laks Lakshmanan as the Chief Supply Chain Officer, effective June 16, 2025, to enhance its supply chain operations [1][3]. Company Overview - Fossil Group, Inc. specializes in design, marketing, distribution, and innovation of lifestyle accessories, including watches, jewelry, handbags, and more, under a diverse portfolio of owned and licensed brands [6]. Leadership Appointment - Laks Lakshmanan brings over 20 years of supply chain leadership experience, having previously served as Managing Director at Alvarez & Marsal and interim Head of Supply Chain for Fossil [2][4]. - His role will encompass overseeing Fossil's global end-to-end supply chain, including manufacturing, sourcing, distribution, and logistics [2]. Strategic Goals - The CEO of Fossil Group emphasized the importance of building a high-performing leadership team, highlighting Lakshmanan's operational expertise and strategic mindset as crucial for the company's turnaround [3]. - Lakshmanan expressed his commitment to modernizing Fossil's supply chain and enhancing its operational efficiency [3][4]. Previous Experience - Prior to joining Fossil, Lakshmanan held senior roles at Kearney and Target, focusing on supply chain optimization and transformational initiatives [5].

Core Insights - Fossil Group, Inc. reported a first quarter net sales of $233 million, reflecting an 8.5% decrease compared to the previous year, primarily due to category softness and declines in smartwatch sales [5][12] - The company achieved a gross margin of 61.3%, an increase of 890 basis points year-over-year, attributed to improved product margins and reduced freight costs [5][6] - Despite an operating loss of $7 million, the adjusted operating income was $10 million, indicating a positive trend in operational performance [2][6] Financial Performance - First quarter net sales were $233.3 million, down from $254.9 million in the same quarter last year, with a constant currency decline of 6.2% [5][15] - Gross profit increased to $143 million from $133.5 million, with a gross margin improvement to 61.3% from 52.4% [5][15] - Operating expenses decreased by 8% to $149.7 million, with selling, general and administrative expenses down 12.1% to $133.8 million [5][15] Operational Highlights - The company reported a total liquidity of $100 million, including $78.3 million in cash and cash equivalents [2][7] - Inventory levels decreased by 19% year-over-year to $182.1 million, indicating improved inventory management [7] - The company closed 62 stores, reducing the total store count to 220, with significant closures in the Americas and Europe [28] Market Trends - Sales in the Americas declined by 9% and by 10% in Asia, while Europe saw a slight increase of 1% [5] - Direct-to-consumer sales decreased by 24%, while wholesale sales increased by 6% on a constant currency basis [5] - The traditional watch category saw a 2% increase in sales, contrasting with a 37% decline in the leathers category [5] Future Outlook - The company reiterated its full-year guidance for 2025, anticipating a worldwide net sales impact of approximately $45 million due to retail store closures [8] - The management expressed confidence in the turnaround plan, aiming for long-term profitable growth despite current challenges [4][8]

Group 1 - Fossil Group, Inc. will report its first quarter 2025 financial results after market close on May 14, 2025 [1] - A conference call to discuss the financial results will take place at 5:00 p.m. ET on the same day, accessible via the company's investor relations website [1] - The call will also be archived for replay, providing investors with ongoing access to the information [1] Group 2 - Fossil Group, Inc. specializes in lifestyle accessories, including watches, jewelry, handbags, small leather goods, belts, and sunglasses [2] - The company operates a diverse portfolio of owned and licensed brands, such as Fossil, Michele, Relic, Skagen, Zodiac, Armani Exchange, Diesel, Emporio Armani, kate spade new york, Michael Kors, Skechers, and Tory Burch [2] - Fossil Group is committed to design and innovation, supported by an extensive distribution network across various geographies, categories, and channels [2]