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Sep 30, 2023
Fossil Q3 2023 Earnings Report
Reported a decrease in net sales and operating loss compared to the previous year, while implementing the TAG Plan to improve profitability.
Key Takeaways
Fossil Group reported a 21% decrease in worldwide net sales, with a significant operating loss compared to the previous year's operating income. The company is focused on executing its TAG Plan to reduce costs and improve profitability, expecting $100 million in annualized cost savings for 2023.
Worldwide net sales decreased by 21% to $344 million.
Operating loss was $46 million, a decline from the previous year's operating income of $22 million.
Direct to consumer channels saw a 12% decrease in net sales in constant currency, with a 6% decrease in comparable retail sales.
Inventory decreased by 28% to $327 million, and the company's total liquidity was $140 million at quarter end.
Fossil
Fossil
Fossil Revenue by Geographic Location
Revenue by Geographic Location
Americas Revenue
CapyFin.comEurope Revenue
CapyFin.comAsia Revenue
CapyFin.com Forward Guidance
Fossil Group updated its full year 2023 guidance, expecting a more significant decline in worldwide net sales and a lower adjusted operating margin than previously anticipated.
Positive Outlook
- Prevailing currency rates are projected to positively impact sales by 70 basis points.
- Company expects full year 2023 adjusted operating margin in the range of -6% to -8%
- The company is on track to capture expected annualized cost savings of approximately $100 million
Challenges Ahead
- Worldwide net sales declines of approximately 14% to 17% versus prior guidance of negative 5% to negative 10%.
- The expected year-over-year decline reflects an estimated fourth quarter net sales decline of 8% to 19%.
- The company expects an estimated fourth quarter adjusted operating margin of flat to -5%.
- Ongoing declines in the wholesale channel in the Americas and Europe
- A more gradual than expected recovery of sales trends in China and current trends in our retail stores.
Revenue & Expenses
Visualization of income flow from segment revenue to net income