Fossil Group Earnings Call Transcripts
Fiscal Year 2026
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Q3 sales rose 2% to $276M, adjusted operating income reached $30M, and gross margin expanded to 59.9%. FY26 sales and adjusted margin guidance increased, with positive free cash flow still expected.
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Q2 saw net sales of $211M, gross margin expansion to 62.4%, and doubled adjusted operating income year-over-year. Strength in the U.S. and India offset EMEA headwinds, prompting a raised full-year outlook and expectations for positive free cash flow in 2026.
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Q1 saw strong gross margin and adjusted operating income, with wholesale and core brands outperforming expectations. Guidance for 2026 is reiterated, expecting a return to top-line growth in Q4 and continued focus on profitability and operational efficiency.
Fiscal Year 2025
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2025 saw a successful turnaround with improved margins, reduced costs, and positive operating income. Guidance for 2026 anticipates continued profitability, a return to sales growth in Q4, and strong momentum in key markets like India.
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Balance sheet restructuring extended debt maturity and added $32M in new capital. Q3 sales declined 7% year-over-year, but gross margin remained strong and operating loss narrowed. Full-year guidance reiterated, with break-even to slightly positive adjusted operating margin expected.
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Q2 results exceeded expectations with gross margin expansion, positive adjusted operating income, and significant cost reductions. Full-year guidance was raised, balance sheet strengthened through refinancing, and brand momentum increased via collaborations and marketing initiatives.
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Sequential sales improvement, gross margin expansion to 61.1%, and a return to profitability highlight strong Q1 progress under the turnaround plan. Full-year guidance is reiterated, with cost actions and global diversification expected to offset tariff risks.
Fiscal Year 2024
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Q4 results exceeded guidance with improved gross margin and positive adjusted operating income, despite an 18% sales decline. Cost reductions, store closures, and a shift to a distributor model are expected to drive further margin gains and a return to profitability by 2026.
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Q3 sales declined 16% year-over-year, but gross margin improved to 49.4% and adjusted operating loss narrowed. Transformation initiatives are driving cost reductions, with full-year sales expected at $1.1 billion and positive cash flow forecasted for 2024.
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Q2 saw a 19% sales decline but significant gross margin and cost improvements, narrowing adjusted operating loss by 39%. The TAG plan is on track to deliver $100M in annualized benefits for 2024, with positive free cash flow expected for the year.