Fossil Group, Inc. Reports Third Quarter 2024 Financial Results
Fossil Group (FOSL) reported Q3 2024 financial results with worldwide net sales decreasing 16% to $288 million. Gross margins expanded 240 basis points to 49.4%, while operating loss improved to $24 million from $46 million last year. The company reduced inventory by 31% year-over-year to $226 million and maintained total liquidity of $130 million. Under the Transform and Grow (TAG) Plan, FOSL remains on track to achieve at least $100 million in annualized savings for 2024. The company revised its 2024 outlook, expecting worldwide net sales of approximately $1.1 billion and adjusted operating margin between -6% to -8%.
Fossil Group (FOSL) ha riportato i risultati finanziari del terzo trimestre 2024, evidenziando un calo delle vendite nette globali del 16%, arrivando a 288 milioni di dollari. I margini lordi sono aumentati di 240 punti base, raggiungendo il 49,4%, mentre la perdita operativa è migliorata a 24 milioni di dollari rispetto ai 46 milioni dell'anno precedente. L'azienda ha ridotto l'inventario del 31% su base annua, portandolo a 226 milioni di dollari, e ha mantenuto una liquidità totale di 130 milioni di dollari. Nell'ambito del piano Trasformare e Crescere (TAG), FOSL è ancora in linea per raggiungere almeno 100 milioni di dollari di risparmi annualizzati per il 2024. L'azienda ha rivisto le sue previsioni per il 2024, aspettandosi vendite nette globali di circa 1,1 miliardi di dollari e un margine operativo rettificato compreso tra -6% e -8%.
Fossil Group (FOSL) reportó los resultados financieros del tercer trimestre de 2024, mostrando una disminución del 16% en las ventas netas a nivel mundial, que alcanzaron los 288 millones de dólares. Los márgenes brutos se expandieron en 240 puntos básicos, llegando al 49,4%, mientras que la pérdida operativa mejoró a 24 millones de dólares desde los 46 millones del año anterior. La compañía redujo su inventario en un 31% interanual, a 226 millones de dólares, y mantuvo una liquidez total de 130 millones de dólares. Bajo el Plan Transformar y Crecer (TAG), FOSL sigue en camino de alcanzar al menos 100 millones de dólares en ahorros anualizados para 2024. La compañía revisó su pronóstico para 2024, esperando ventas netas a nivel mundial de aproximadamente 1.1 mil millones de dólares y un margen operativo ajustado entre -6% y -8%.
화석 그룹 (FOSL)이 2024년 3분기 재무 결과를 발표했으며, 전 세계 순 매출이 16% 감소한 2억 8,800만 달러에 달했습니다. 총 이익률은 240bp 증가하여 49.4%에 이르렀고, 운영 손실은 작년 4,600만 달러에서 2,400만 달러로 개선되었습니다. 회사는 연간 기준으로 재고를 31% 줄여 2억 2,600만 달러를 유지했으며, 총 유동성은 1억 3,000만 달러를 유지했습니다. 변환 및 성장(TAG) 계획에 따라 FOSL은 2024년 연간 1억 달러 이상의 절감을 달성할 수 있는 길에 있습니다. 회사는 2024년 전망을 수정하여 전 세계 순 매출이 약 11억 달러이고 조정된 운영 마진이 -6%에서 -8% 사이일 것으로 예상하고 있습니다.
Fossil Group (FOSL) a annoncé les résultats financiers du troisième trimestre 2024, montrant une diminution des ventes nettes mondiales de 16%, atteignant 288 millions de dollars. Les marges brutes se sont étendues de 240 points de base pour atteindre 49,4%, tandis que la perte d'exploitation s'est améliorée à 24 millions de dollars, contre 46 millions l'année précédente. La société a réduit son inventaire de 31% d'une année sur l'autre, atteignant 226 millions de dollars, et a maintenu une liquidité totale de 130 millions de dollars. Dans le cadre du Plan Transformer et Croître (TAG), FOSL reste sur la bonne voie pour atteindre au moins 100 millions de dollars d'économies annualisées pour 2024. L'entreprise a révisé ses prévisions pour 2024, s'attendant à des ventes nettes mondiales d'environ 1,1 milliard de dollars et une marge opérationnelle ajustée entre -6% et -8%.
Fossil Group (FOSL) hat die Finanzergebnisse für das dritte Quartal 2024 veröffentlicht, wobei die weltweiten Nettoumsätze um 16% auf 288 Millionen Dollar gesunken sind. Die Bruttomargen haben sich um 240 Basispunkte auf 49,4% erhöht, während der operative Verlust sich auf 24 Millionen Dollar von 46 Millionen Dollar im Vorjahr verbessert hat. Das Unternehmen hat den Lagerbestand im Jahresvergleich um 31% auf 226 Millionen Dollar reduziert und die Gesamtliquidität von 130 Millionen Dollar aufrechterhalten. Im Rahmen des Transformieren und Wachsen (TAG) Plans bleibt FOSL auf Kurs, um in 2024 mindestens 100 Millionen Dollar an Einsparungen zu erzielen. Das Unternehmen hat seine Prognose für 2024 überarbeitet und erwartet weltweit Nettoumsätze von etwa 1,1 Milliarden Dollar sowie eine angepasste operative Marge zwischen -6% und -8%.
- Gross margin improved by 240 basis points to 49.4%
- Operating loss reduced to $24 million from $46 million year-over-year
- Inventory reduced by 31% to $226 million
- SG&A expenses decreased by 16%
- Worldwide net sales declined 16% to $288 million
- Traditional watch sales declined 12%
- Direct to consumer sales decreased 24%
- Net loss of $32 million ($0.60 per share)
- Negative adjusted operating margin of -6.5%
Insights
The Q3 results paint a concerning picture for Fossil Group.
The company's liquidity position is tight with
The TAG Plan's cost-saving initiatives, while promising
Fossil's market challenges extend beyond company-specific issues to broader industry trends. The exit from smartwatches, contributing to
The decline across multiple product categories (watches, leather goods, jewelry) and distribution channels indicates systemic issues rather than isolated problems. The engagement of Evercore for strategic review suggests potential major structural changes ahead, including possible asset sales or refinancing.
Remains On Track to Achieve at Least
Updates Full Year Outlook
RICHARDSON, Texas, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Fossil Group, Inc. (NASDAQ: FOSL) today announced financial results for the fiscal third quarter ended September 28, 2024.
Third Quarter Summary
- Third quarter worldwide net sales decreased to
$288 million , down16% on both a reported and constant currency basis. The results included six points of negative impact related to the Company’s strategic actions to exit the smartwatch category and optimize its retail store portfolio. - Gross margins expanded 240 basis points to
49.4% , primarily reflecting progress under the Company’s Transform and Grow ("TAG") Plan. - Selling, general and administrative (“SG&A”) expenses of
$161 million were down16% versus last year, primarily due to lower compensation costs as a result of efficiencies from the Company’s TAG Plan. - Third quarter operating loss of
$24 million compared to an operating loss of$46 million a year ago. Adjusted operating loss of$19 million compared to an adjusted operating loss of$31 million last year. - Inventory totaled
$226 million , a decrease of31% versus a year ago; the Company had total liquidity of$130 million at quarter end, including cash and cash equivalents of$106 million and$24 million of availability under its revolving credit facility.
“In my first sixty days at Fossil Group, I’ve been spending time with our brands, teams and partners around the world to immerse myself in the business,” said Franco Fogliato, Chief Executive Officer. “During this time, I have developed an even stronger conviction about the Company’s significant potential and our ability to return the business to profitable growth. We are moving quickly to develop a plan that will be built upon discipline, simplification and focus, leveraging our great brands and talented teams to drive a successful turnaround and create value for our shareholders.”
Third Quarter 2024 Operating Results
Amounts referred to as “adjusted” as well as “constant currency” are non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to their closest reported GAAP measures are included at the end of this press release.
- Net sales totaled
$287.8 million , a decrease of16.4% on a reported basis and16.3% in constant currency compared to$344.1 million in the third quarter of fiscal 2023. The sales decrease was largely driven by overall category, consumer and channel softness. Declines in smartwatch sales resulting from our exit of the category, and our store rationalization initiatives comprised approximately six points of the sales decline in the third quarter. Net sales in constant currency declined20% in the Americas,11% in Europe and17% in Asia. Wholesale sales in constant currency declined12% , while our direct to consumer sales decreased24% . Within our direct to consumer channels, comparable retail sales declined12% . In our major product categories, traditional watch sales declined12% in constant currency in the third quarter compared to the prior year period. The leathers category decreased28% and jewelry sales declined10% in constant currency during the third quarter. From a brand lens, the majority of the brands in our portfolio decreased in the third quarter. - Gross profit totaled
$142.2 million compared to$161.7 million in the third quarter of 2023. Gross margin increased 240 basis points to49.4% versus47.0% in the third quarter of 2023. The year-over-year increase was primarily due to initiatives under our TAG Plan, including improved product margins in our core categories and our exit from the smartwatch category. These favorable impacts were partially offset by increased licensor minimum royalty costs. - Operating expenses totaled
$166.7 million , down20% compared to$208.1 million a year ago. As a percentage of net sales, operating expenses were57.9% in the third quarter of 2024 compared to60.5% in the prior year third quarter. Operating expenses in the third quarter of 2024 included$4.8 million of restructuring costs, primarily related to professional services and employee costs, while operating expenses in the third quarter of 2023 included$16.0 million of restructuring costs. SG&A expenses were$160.9 million , down16% compared to the third quarter of 2023. As a percentage of net sales, SG&A expenses were55.9% in the third quarter of 2024 compared to55.6% in the prior year third quarter, largely driven by decreased sales. - Operating loss was
$24.5 million compared to$46.4 million in the third quarter of 2023. Operating margin was (8.5)% in the third quarter of 2024 compared to (13.5)% in the prior year third quarter. Adjusted operating loss totaled$18.7 million compared to$31.1 million in the third quarter of 2023. Adjusted operating margin was (6.5)% in the third quarter of 2024 compared to (9.0)% in the prior year third quarter. - Interest expense decreased to
$4.9 million compared to$5.8 million in the third quarter of 2023, primarily driven by a lower debt balance. - Other income (expense) was income of
$3.6 million compared to expense of$3.0 million in the third quarter of 2023, reflecting net currency gains in the third quarter of 2024 as compared to net currency losses in the prior year third quarter. - Income (loss) before income taxes was
$(25.8) million compared to$(55.2) million in the third quarter of 2023. - Adjusted EBITDA was
$(12.3) million , or (4.3)% of net sales in the third quarter of 2024 and$(29.3) million , or (8.4)% of net sales in the prior year quarter. - Provision (benefit) for income taxes was an expense of
$6.2 million , resulting in an effective income tax rate of (23.9)% compared to an expense of$5.6 million and an effective tax rate of (10.1)% in the prior year. The effective tax rate in the third quarter of 2024 differed from the prior year third quarter primarily due to a change in the Company’s global mix of earnings. - Net loss totaled
$32.0 million with net loss per diluted share of$0.60 , which compares to net loss of$61.1 million and net loss per diluted share of$1.16 in the prior year quarter. Adjusted net loss for the third quarter was$27.4 million with adjusted net loss per diluted share of$0.51 compared to adjusted net loss of$49.0 million with adjusted net loss per diluted share of$0.93 in the prior year quarter. During the third quarter of 2024, currencies favorably affected net loss per diluted share by approximately$0.07 .
Balance Sheet Summary
As of September 28, 2024, the Company had total liquidity of
Transform and Grow Plan
The Company remains on track with its TAG Plan, a comprehensive operational plan designed to reduce operating expenses, improve operating margins and advance the Company’s commitment to profitable growth. The plan encompasses multiple workstreams with a target to drive
Strategic Business Review
In March 2024, the Company announced a strategic review of its current business model and capital structure. This includes efforts to optimize its business model through additional changes to its operations, as well as further structural cost reductions, which are under consideration. The Company anticipates this effort will expand on its current TAG Plan and could include additional debt and equity financing options, including monetization of various assets to strengthen its balance sheet. The Company has retained Evercore to act as its financial advisor.
Outlook
The Company is revising its full year financial outlook for 2024. Worldwide net sales are expected to be approximately
(1) A reconciliation of adjusted operating margin, a non-GAAP financial measure, to a corresponding GAAP measure is not available on a forward-looking basis without unreasonable efforts due to the high variability and low visibility of certain income and expense items that are excluded in calculating adjusted operating margin.
(2) Free cash flow is a non-GAAP financial measure, defined as net cash from operating activities less net cash used in investing activities. A corresponding reconciliation of free cash flow to a corresponding GAAP measure is not available on a forward-looking basis without unreasonable effort.
Safe Harbor
Certain statements contained herein that are not historical facts, including, but not limited to, statements regarding our outlook, expected financial position, TAG Plan benefits and expenses, liquidity and strategic review, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: increased political uncertainty, the effect of worldwide economic conditions; the effect of any pandemics; risks related to the success of our restructuring program; the failure to meet the continued listing requirements of Nasdaq; significant changes in consumer spending patterns or preferences; interruptions or delays in the supply of key components or products; acts of war or acts of terrorism; loss of key facilities; a data security or privacy breach or information systems disruptions; changes in foreign currency valuations in relation to the U.S. dollar; lower levels of consumer spending resulting from inflation, a general economic downturn or generally reduced shopping activity caused by public safety or consumer confidence concerns; the performance of our products within the prevailing retail environment; customer acceptance of both new designs and newly-introduced product lines; changes in the mix of product sales; the effects of vigorous competition in the markets in which we operate; compliance with debt covenants and other contractual provisions and meeting debt service obligations; risks related to the success of our business strategy; the termination or non-renewal of material licenses; any impact of minimum royalty commitments in excess of royalties payable on actual sales; risks related to foreign operations and manufacturing; changes in the costs of materials and labor; government regulation and tariffs; our ability to secure and protect trademarks and other intellectual property rights; levels of traffic to and management of our retail stores; loss of key personnel or failure to attract and retain key employees and the outcome of current and possible future litigation, as well as the risks and uncertainties set forth in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”). These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Readers of this release should consider these factors in evaluating, and are cautioned not to place undue reliance on, the forward-looking statements contained herein. The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
About Fossil Group, Inc.
Fossil Group, Inc. is a global design, marketing, distribution and innovation company specializing in lifestyle accessories. Under a diverse portfolio of owned and licensed brands, our offerings include watches, jewelry, handbags, small leather goods, belts and sunglasses. We are committed to delivering the best in design and innovation across our owned brands, Fossil, Michele, Relic, Skagen and Zodiac, and licensed brands, Armani Exchange, Diesel, DKNY, Emporio Armani, kate spade new york, Michael Kors, and Tory Burch. We bring each brand story to life through an extensive distribution network across numerous geographies, categories and channels. Certain press release and SEC filing information concerning the Company is also available at www.fossilgroup.com.
Investor Relations: | Christine Greany |
The Blueshirt Group | |
(858) 722-7815 | |
christine@blueshirtgroup.com | |
Consolidated Income Statement Data | For the 13 Weeks Ended | For the 13 Weeks Ended | For the 39 Weeks Ended | For the 39 Weeks Ended | |||||||||||
($ in millions, except per share data): | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | |||||||||||
Net sales | $ | 287.8 | $ | 344.1 | $ | 802.7 | $ | 991.1 | |||||||
Cost of sales | 145.6 | 182.4 | 390.1 | 512.1 | |||||||||||
Gross profit | 142.2 | 161.7 | 412.6 | 479.0 | |||||||||||
Gross margin | 49.4 | % | 47.0 | % | 51.4 | % | 48.3 | % | |||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative expenses | 160.9 | 191.5 | 466.7 | 569.5 | |||||||||||
Other long-lived asset impairments | 1.0 | 0.6 | 1.9 | 0.8 | |||||||||||
Restructuring charges | 4.8 | 16.0 | 31.6 | 27.7 | |||||||||||
Total operating expenses | $ | 166.7 | $ | 208.1 | $ | 500.2 | $ | 598.0 | |||||||
Total operating expenses (% of net sales) | 57.9 | % | 60.5 | % | 62.3 | % | 60.3 | % | |||||||
Operating income (loss) | (24.5 | ) | (46.4 | ) | (87.6 | ) | (119.0 | ) | |||||||
Operating margin | (8.5)% | (13.5)% | (10.9)% | (12.0)% | |||||||||||
Interest expense | 4.9 | 5.8 | 14.1 | 16.1 | |||||||||||
Other income (expense) - net | 3.6 | (3.0 | ) | 8.9 | 6.8 | ||||||||||
Income (loss) before income taxes | (25.8 | ) | (55.2 | ) | (92.8 | ) | (128.3 | ) | |||||||
Provision (benefit) for income taxes | 6.2 | 5.6 | 2.3 | — | |||||||||||
Less: Net income attributable to noncontrolling interest | — | 0.3 | — | 0.6 | |||||||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (32.0 | ) | $ | (61.1 | ) | $ | (95.1 | ) | $ | (128.9 | ) | |||
Earnings per share: | |||||||||||||||
Basic | $ | (0.60 | ) | $ | (1.16 | ) | $ | (1.80 | ) | $ | (2.47 | ) | |||
Diluted | $ | (0.60 | ) | $ | (1.16 | ) | $ | (1.80 | ) | $ | (2.47 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 53.2 | 52.5 | 52.9 | 52.2 | |||||||||||
Diluted | 53.2 | 52.5 | 52.9 | 52.2 |
`
Consolidated Balance Sheet Data ($ in millions): | September 28, 2024 | September 30, 2023 | |||
Assets: | |||||
Cash and cash equivalents | $ | 106.3 | $ | 116.1 | |
Accounts receivable - net | 173.7 | 194.0 | |||
Inventories | 226.4 | 326.7 | |||
Other current assets | 69.5 | 148.1 | |||
Total current assets | $ | 575.9 | $ | 784.9 | |
Property, plant and equipment - net | $ | 45.2 | $ | 68.6 | |
Operating lease right-of-use assets | 135.5 | 154.5 | |||
Intangible and other assets - net | 55.8 | 55.2 | |||
Total long-term assets | $ | 236.5 | $ | 278.3 | |
Total assets | $ | 812.4 | $ | 1,063.2 | |
Liabilities and stockholders’ equity: | |||||
Accounts payable, accrued expenses and other current liabilities | $ | 315.2 | $ | 348.1 | |
Short-term debt | 2.3 | 0.5 | |||
Total current liabilities | $ | 317.5 | $ | 348.6 | |
Long-term debt | $ | 173.4 | $ | 255.9 | |
Long-term operating lease liabilities | 120.6 | 142.1 | |||
Other long-term liabilities | 39.0 | 37.8 | |||
Total long-term liabilities | $ | 333.0 | $ | 435.8 | |
Stockholders’ equity | 161.9 | 278.8 | |||
Total liabilities and stockholders’ equity | $ | 812.4 | $ | 1,063.2 |
Constant Currency Financial Information
The following table presents the Company’s business segment and product net sales on a constant currency basis which are non-GAAP financial measures. To calculate net sales on a constant currency basis, net sales for the current fiscal year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average rates during the comparable period of the prior fiscal year. The Company presents constant currency information to provide investors with a basis to evaluate how its underlying business performed excluding the effects of foreign currency exchange rate fluctuations. The constant currency financial information presented herein should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.
Net Sales For the 13 Weeks Ended | Net Sales For the 39 Weeks Ended | ||||||||||||||||||||||||
September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | ||||||||||||||||||||||
($ in millions) | As Reported | Impact of Foreign Currency Exchange Rates | Constant Currency | As Reported | As Reported | Impact of Foreign Currency Exchange Rates | Constant Currency | As Reported | |||||||||||||||||
Segment: | |||||||||||||||||||||||||
Americas | $ | 121.3 | $ | 1.2 | $ | 122.5 | $ | 152.6 | $ | 351.0 | $ | 0.3 | $ | 351.3 | $ | 437.2 | |||||||||
Europe | 97.0 | (1.3 | ) | 95.7 | 107.7 | 250.6 | (1.9 | ) | 248.7 | 301.6 | |||||||||||||||
Asia | 69.0 | 0.2 | 69.2 | 83.0 | 199.7 | 4.3 | 204.0 | 247.3 | |||||||||||||||||
Corporate | 0.5 | (0.1 | ) | 0.4 | 0.8 | 1.4 | — | 1.4 | 5.0 | ||||||||||||||||
Total net sales | $ | 287.8 | $ | — | $ | 287.8 | $ | 344.1 | $ | 802.7 | $ | 2.7 | $ | 805.4 | $ | 991.1 | |||||||||
Product categories: | |||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||
Traditional watches | $ | 223.2 | $ | 0.3 | $ | 223.5 | $ | 252.7 | $ | 603.9 | $ | 1.7 | $ | 605.6 | $ | 714.2 | |||||||||
Smartwatches | 4.0 | (0.1 | ) | 3.9 | 17.3 | 21.2 | 0.1 | 21.3 | 59.5 | ||||||||||||||||
Total watches | $ | 227.2 | $ | 0.2 | $ | 227.4 | $ | 270.0 | $ | 625.1 | $ | 1.8 | $ | 626.9 | $ | 773.7 | |||||||||
Leathers | 23.9 | — | 23.9 | 33.0 | 78.7 | 0.3 | 79.0 | 106.6 | |||||||||||||||||
Jewelry | 31.5 | (0.2 | ) | 31.3 | 34.6 | 81.9 | 0.5 | 82.4 | 91.0 | ||||||||||||||||
Other | 5.2 | — | 5.2 | 6.5 | 17.0 | 0.1 | 17.1 | 19.8 | |||||||||||||||||
Total net sales | $ | 287.8 | $ | — | $ | 287.8 | $ | 344.1 | $ | 802.7 | $ | 2.7 | $ | 805.4 | $ | 991.1 |
Adjusted EBITDA, Adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share
Adjusted EBITDA, Adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share are non-GAAP financial measures. We define Adjusted EBITDA as our net income (loss) before the impact of income tax expense (benefit), plus interest expense, amortization and depreciation, impairment expense, other non-cash charges, stock-based compensation expense, restructuring expense and unamortized debt issuance costs included in loss on extinguishment of debt minus interest income. We define Adjusted operating income (loss) as operating income (loss) before impairment expense and restructuring expense. We define Adjusted net income (loss) and Adjusted earnings (loss) per share as net income (loss) attributable to Fossil Group, Inc. and diluted earnings (loss) per share, respectively, before impairment expense, restructuring expense and unamortized debt issuance costs included in loss on extinguishment of debt. We have included Adjusted EBITDA, Adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share herein because they are widely used by investors for valuation and for comparing our financial performance with the performance of our competitors. We also use both non-GAAP financial measures to monitor and compare the financial performance of our operations. Our presentation of Adjusted EBITDA, Adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share may not be comparable to similarly titled measures other companies report. Adjusted EBITDA, Adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share are not intended to be used as alternatives to any measure of our performance in accordance with GAAP.
The following tables reconcile Adjusted EBITDA to the most directly comparable GAAP financial measure, which is income (loss) before income taxes. Certain line items presented in the tables below, when aggregated, may not foot due to rounding.
Fiscal 2023 | Fiscal 2024 | ||||||||||||||||||||
($ in millions): | Q4 | Q1 | Q2 | Q3 | Total | ||||||||||||||||
Income (loss) before income taxes | $ | (27.8 | ) | $ | (30.4 | ) | $ | (36.6 | ) | $ | (25.8 | ) | $ | (120.6 | ) | ||||||
Plus: | |||||||||||||||||||||
Interest expense | 5.7 | 5.1 | 4.1 | 4.9 | 19.8 | ||||||||||||||||
Amortization and depreciation | 4.6 | 4.5 | 3.9 | 3.8 | 16.8 | ||||||||||||||||
Impairment expense | 1.3 | 0.4 | 0.6 | 1.0 | 3.3 | ||||||||||||||||
Other non-cash charges | 0.1 | (0.1 | ) | 0.1 | (0.5 | ) | (0.4 | ) | |||||||||||||
Stock-based compensation | 1.1 | 1.0 | 0.6 | 0.6 | 3.3 | ||||||||||||||||
Restructuring expense | 15.5 | 10.1 | 16.7 | 4.8 | 47.1 | ||||||||||||||||
Restructuring cost of sales | (1.3 | ) | (0.2 | ) | — | — | (1.5 | ) | |||||||||||||
Less: | |||||||||||||||||||||
Interest income | 0.9 | 1.1 | 1.1 | 1.1 | 4.2 | ||||||||||||||||
Adjusted EBITDA | $ | (1.6 | ) | $ | (10.7 | ) | $ | (11.7 | ) | $ | (12.3 | ) | $ | (36.4 | ) |
Fiscal 2022 | Fiscal 2023 | |||||||||||||||||||
($ in millions): | Q4 | Q1 | Q2 | Q3 | Total | |||||||||||||||
Income (loss) before income taxes | $ | (4.0 | ) | $ | (39.6 | ) | $ | (33.5 | ) | $ | (55.2 | ) | $ | (132.3 | ) | |||||
Plus: | ||||||||||||||||||||
Interest expense | 5.8 | 5.0 | 5.3 | 5.8 | 21.9 | |||||||||||||||
Amortization and depreciation | 5.7 | 5.1 | 4.8 | 4.5 | 20.1 | |||||||||||||||
Impairment expense | 1.2 | 0.1 | 0.2 | 0.6 | 2.1 | |||||||||||||||
Other non-cash charges | (0.3 | ) | (0.2 | ) | (0.5 | ) | (0.2 | ) | (1.2 | ) | ||||||||||
Stock-based compensation | 2.3 | 1.4 | 1.6 | 1.5 | 6.8 | |||||||||||||||
Restructuring expense | 0.7 | 7.1 | 4.6 | 16.0 | 28.4 | |||||||||||||||
Restructuring cost of sales | — | 5.3 | 2.9 | (1.3 | ) | 6.9 | ||||||||||||||
Unamortized debt issuance costs included in loss on extinguishment of debt | 1.1 | — | — | — | 1.1 | |||||||||||||||
Less: | ||||||||||||||||||||
Interest income | 0.4 | 0.6 | 0.8 | 1.0 | 2.8 | |||||||||||||||
Adjusted EBITDA | $ | 12.1 | $ | (16.4 | ) | $ | (15.4 | ) | $ | (29.3 | ) | $ | (49.0 | ) | ||||||
The following tables reconcile Adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share to the most directly comparable GAAP financial measures, which are operating income (loss), net income (loss) attributable to Fossil Group, Inc. and diluted earnings (loss) per share, respectively. Certain line items presented in the table below, when aggregated, may not foot due to rounding.
For the 13 Weeks Ended September 28, 2024 | ||||||||||
($ in millions, except per share data): | As Reported | Other Long-Lived Asset Impairment | Restructuring Expenses | As Adjusted | ||||||
Operating income (loss) | $ | (24.5 | ) | $ | 1.0 | $ | 4.8 | $ | (18.7 | ) |
Operating margin (% of net sales) | (8.5)% | (6.5)% | ||||||||
Interest expense | (4.9 | ) | — | — | (4.9 | ) | ||||
Other income (expense) - net | 3.6 | — | — | 3.6 | ||||||
Income (loss) before income taxes | (25.8 | ) | 1.0 | 4.8 | (20.0 | ) | ||||
Provision (benefit) for income taxes | 6.2 | 0.2 | 1.0 | 7.4 | ||||||
Less: Net income attributable to noncontrolling interest | — | — | — | — | ||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (32.0 | ) | $ | 0.8 | $ | 3.8 | $ | (27.4 | ) |
Diluted earnings (loss) per share | $ | (0.60 | ) | $ | 0.02 | $ | 0.07 | $ | (0.51 | ) |
For the 13 Weeks Ended September 30, 2023 | |||||||||||||
($ in millions, except per share data): | As Reported | Restructuring Cost of Sales | Other Long-Lived Asset Impairment | Restructuring Expenses | As Adjusted | ||||||||
Operating income (loss) | $ | (46.4 | ) | $ | (1.3 | ) | $ | 0.6 | $ | 16.0 | $ | (31.1 | ) |
Operating margin (% of net sales) | (13.5)% | (9.0)% | |||||||||||
Interest expense | (5.8 | ) | — | — | — | (5.8 | ) | ||||||
Other income (expense) - net | (3.1 | ) | — | — | — | (3.1 | ) | ||||||
Income (loss) before income taxes | (55.2 | ) | (1.3 | ) | 0.6 | 16.0 | (39.9 | ) | |||||
Provision for income taxes | 5.6 | (0.3 | ) | 0.1 | 3.4 | 8.8 | |||||||
Less: Net income attributable to noncontrolling interest | (0.3 | ) | — | — | — | (0.3 | ) | ||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (61.1 | ) | $ | (1.0 | ) | $ | 0.5 | $ | 12.6 | $ | (49.0 | ) |
Diluted earnings (loss) per share | $ | (1.16 | ) | $ | (0.02 | ) | $ | 0.01 | $ | 0.24 | $ | (0.93 | ) |
For the 39 Weeks Ended September 28, 2024 | |||||||||||||
($ in millions, except per share data): | As Reported | Restructuring Cost of Sales | Other Long-Lived Asset Impairment | Restructuring Expenses | As Adjusted | ||||||||
Operating income (loss) | $ | (87.7 | ) | $ | (0.2 | ) | $ | 1.9 | $ | 31.6 | $ | (54.4 | ) |
Operating margin (% of net sales) | (10.9)% | (6.8)% | |||||||||||
Interest expense | (14.1 | ) | — | — | — | (14.1 | ) | ||||||
Other income (expense) - net | 9.0 | — | — | — | 9.0 | ||||||||
Income (loss) before income taxes | (92.8 | ) | (0.2 | ) | 1.9 | 31.6 | (59.5 | ) | |||||
Provision (benefit) for income taxes | 2.3 | — | 0.4 | 6.6 | 9.3 | ||||||||
Less: Net income attributable to noncontrolling interest | — | — | — | — | — | ||||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (95.1 | ) | $ | (0.2 | ) | $ | 1.5 | $ | 25.0 | $ | (68.8 | ) |
Diluted earnings (loss) per share | $ | (1.80 | ) | $ | — | $ | 0.03 | $ | 0.47 | $ | (1.30 | ) |
For the 39 Weeks Ended September 30, 2023 | ||||||||||||
($ in millions, except per share data): | As Reported | Restructuring Cost of Sales | Other Long-Lived Asset Impairment | Restructuring Expenses | As Adjusted | |||||||
Operating income (loss) | $ | (119.0 | ) | $ | 6.8 | $ | 0.8 | $ | 27.7 | $ | (83.7 | ) |
Operating margin (% of net sales) | (12.0)% | (8.4)% | ||||||||||
Interest expense | (16.1 | ) | — | — | — | (16.1 | ) | |||||
Other income (expense) - net | 6.8 | — | — | — | 6.8 | |||||||
Income (loss) before income taxes | (128.3 | ) | 6.8 | 0.8 | 27.7 | (93.0 | ) | |||||
Provision for income taxes | — | 1.4 | 0.2 | 5.8 | 7.4 | |||||||
Less: Net income attributable to noncontrolling interest | (0.6 | ) | — | — | — | (0.6 | ) | |||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (128.9 | ) | $ | 5.4 | $ | 0.6 | $ | 21.9 | $ | (101.0 | ) |
Diluted earnings (loss) per share | $ | (2.47 | ) | $ | 0.10 | $ | 0.01 | $ | 0.42 | $ | (1.94 | ) |
Store Count Information
September 30, 2023 | Opened | Closed | September 28, 2024 | ||||
Americas | 143 | 2 | 29 | 116 | |||
Europe | 87 | 0 | 20 | 67 | |||
Asia | 73 | 2 | 7 | 68 | |||
Total stores | 303 | 4 | 56 | 251 |
FAQ
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