Fossil Q1 2020 Earnings Report
Key Takeaways
Fossil Group's worldwide net sales totaled $390.7 million, a decrease of 16% compared to the first quarter of fiscal 2019. The company reported a net loss of $85.6 million, or ($1.69) per diluted share, compared to a net loss of $12.2 million, or ($0.25) per diluted share, in the first quarter of 2019. As of April 4, 2020, the Company had total liquidity of $278 million, comprised of $245 million of cash and cash equivalents and $33 million of availability under its revolving credit facility.
Net sales decreased by 16% year-over-year to $390.7 million due to COVID-19 impact.
Global retail comparable sales decreased 14% in constant currency, but were trending up 1% prior to COVID-19 store closings.
Gross margin decreased to 35.9% from 53.3%, reflecting liquidation and increased inventory valuation adjustments.
The company is expanding its NWF 2.0 transformation program to include additional cost savings of $50 million in 2020.
Fossil
Fossil
Forward Guidance
Due to continued uncertainty related to COVID-19, the Company is not providing financial guidance at this time. The Company anticipates that the COVID-19 pandemic will continue to pressure sales throughout 2020, with the greatest impact in the second quarter. Due to closures for both FOSSIL stores and our wholesale partners during the majority of the second quarter, worldwide net sales are expected to decline in the range of 60%-70%, with contraction in retail and wholesale partly offset by strength in e-commerce channels.