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Jul 05, 2025
Fossil Q2 2025 Earnings Report
Fossil posted a second quarter net loss of $2.3 million despite achieving positive operating income of $8.5 million and a higher gross margin.
Key Takeaways
Fossil reported a net sales decline of 15% in Q2 2025, impacted by softness in key categories and store closures. Despite the sales drop, the company achieved positive operating income and expanded its gross margin to 57.5%. SG&A expenses dropped significantly as restructuring efforts took hold.
Net sales declined to $220.4 million, primarily due to weak consumer demand and exit from smartwatches.
Gross margin improved significantly to 57.5%, driven by product mix and cost controls.
Operating income reached $8.5 million, marking a turnaround from the $34 million loss in Q2 2024.
Adjusted net loss was $5.6 million; GAAP net loss was $2.3 million.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Fossil raised its full-year 2025 guidance based on strong year-to-date performance and improving margins.
Positive Outlook
- Raised full-year 2025 guidance due to stronger-than-expected results.
- Expecting break-even to slightly positive adjusted operating margin.
- Gross margin strength expected to continue.
- Refinancing plan expected to improve liquidity.
- Operational momentum seen across key turnaround pillars.
Challenges Ahead
- Mid-teens decline in net sales still expected for full-year.
- Retail store closures expected to impact sales by $45 million.
- Consumer demand and category softness remain concerns.
- Adjusted margin guidance excludes foreign currency effects.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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