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Oct 03, 2020
Fossil Q3 2020 Earnings Report
Fossil Group's financial performance was reported with net sales decreasing due to COVID-19 impacts, but e-commerce and China showed strength. Operating income improved driven by gross margin expansion and cost reductions.
Key Takeaways
Fossil Group reported a decrease in worldwide net sales by 19% to $435 million, but outperformed topline expectations due to growth in e-commerce and Mainland China. The company achieved an operating income of $18 million, a significant improvement from the previous year's operating loss of $9 million, driven by gross margin expansion and cost reduction efforts.
Worldwide net sales decreased by 19% to $435 million, or 20% in constant currency.
Owned e-commerce sales increased by 66% and third-party marketplace e-commerce sales increased by 44% in constant currency.
Gross margin expanded by 120 basis points to 52.8%.
Operating expenses were reduced by $75 million, or 26% year-over-year.
Fossil
Fossil
Fossil Revenue by Segment
Fossil Revenue by Geographic Location
Revenue by Segment
Watches Revenue
CapyFin.comLeathers Revenue
CapyFin.comJewelry Revenue
CapyFin.comOther Revenue
CapyFin.comRevenue by Geographic Location
Americas Revenue
CapyFin.comEurope Revenue
CapyFin.comAsia Revenue
CapyFin.comCorporate Revenue
CapyFin.com Forward Guidance
The Company anticipates that impacts from COVID-19 will continue to pressure sales in the fourth quarter of 2020, with ongoing strength in e-commerce channels offset by contraction in Fossil retail stores and the wholesale channel. Worldwide net sales are expected to decline in the range of 40% to 30%.
Positive Outlook
- Ongoing strength in e-commerce channels
Challenges Ahead
- Impacts from COVID-19 will continue to pressure sales
- Contraction in Fossil retail stores
- Contraction in the wholesale channel
- Worldwide net sales are expected to decline in the range of 40% to 30%
Revenue & Expenses
Visualization of income flow from segment revenue to net income