Fossil Q2 2023 Earnings Report
Key Takeaways
Fossil Group reported a 13% decrease in worldwide net sales, totaling $322 million. The company's operating loss was $35 million, compared to $11 million in the same quarter last year. The Transform and Grow Plan was expanded to $300 million in annualized operating income benefits by the end of 2025.
Worldwide net sales decreased by 13% to $322 million.
Direct to consumer channels saw a 4% decrease in net sales in constant currency, while wholesale channels decreased by 19%.
Fossil brand sales decreased by 8% in constant currency, with traditional watch sales growing slightly but offset by declines in smartwatches and leathers.
Operating loss was $35 million, compared to a loss of $11 million a year ago.
Fossil
Fossil
Fossil Revenue by Geographic Location
Forward Guidance
The company is updating its guidance for the full year 2023 to reflect results from the second quarter, continued declines in wholesale channels in the Americas and Europe and a more gradual sales recovery in China than previously estimated.
Challenges Ahead
- Worldwide net sales declines of approximately 5% to 10%.
- Adjusted operating margin to be -2% to -4% of net sales.
- Restructuring charges of approximately $35 million for the full year 2023.
- Continued declines in wholesale channels in the Americas and Europe.
- A more gradual sales recovery in China than previously estimated.
Revenue & Expenses
Visualization of income flow from segment revenue to net income