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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.
Revenue by Segment
Revenue by Geographic Location
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
Historical Earnings Impact
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Avg. Return Before/After Earnings
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