Fossil Q2 2022 Earnings Report
Key Takeaways
Fossil Group, Inc. reported a decrease in worldwide net sales by 10% to $371 million, with an operating loss of $11 million. The company is adjusting its full year outlook to reflect softening consumer demand and ongoing inflationary pressure.
Worldwide net sales decreased 10% to $371 million, or 5% in constant currency, with declines across all three regions.
FOSSIL brand sales increased 7% in constant currency driven by traditional watches, jewelry and leathers.
Direct to consumer net sales increased 5% in constant currency, led by 26% growth in store sales offset by decreased e-commerce sales.
Operating loss was $11 million compared to operating income of $14 million a year ago.
Fossil
Fossil
Fossil Revenue by Geographic Location
Forward Guidance
The Company is updating its guidance for full year 2022 to reflect a more cautious outlook on global markets, including a slowdown in consumer spending, COVID-19 related restrictions in mainland China, and the impact of foreign currency translation.
Positive Outlook
- Focusing on core initiatives in digital and brand heat.
- Implementing strategies to maximize shareholder value.
- Remaining agile to navigate global operating conditions.
- Adjusting full year outlook to reflect moderating demand globally.
- Anticipating growth in jewelry and leathers businesses.
Challenges Ahead
- Expecting worldwide net sales declines of approximately 8% to 4%.
- Including an estimated foreign currency negative impact of 450 basis points.
- Reducing adjusted operating margin guidance for the full year to 2% to 4%.
- Acknowledging softening consumer demand.
- Considering the likelihood of ongoing COVID-19 related restrictions in mainland China.
Revenue & Expenses
Visualization of income flow from segment revenue to net income