Overview
Fossil Group Q2 sales decline 15.2% yr/yr to $220 mln, beat estimates, per LSEG data
Adjusted net income, EBITDA, and operating income all beat analyst expectations
Co raises full-year 2025 guidance, announces refinancing plan to strengthen balance sheet
Outlook
Fossil raises 2025 guidance, sees mid-teens sales decline
Company expects adjusted operating margin to be break even to positive
Fossil's 2025 sales guidance excludes $45 mln from store closures
Result Drivers
SALES DECLINE - Net sales fell 15.2% yr/yr due to category, consumer, and channel softness, exit from smartwatch category, and store rationalization
GROSS MARGIN IMPROVEMENT - Gross margin increased 490 basis points to 57.5% due to improved product margins, reduced freight costs, and sourcing initiatives
OPERATING EXPENSE REDUCTION - Operating expenses decreased 30.8% yr/yr, aided by a gain from the sale of a European warehouse and restructuring efforts
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales | Beat | $220 mln | $198 mln (1 Analyst) |
Q2 Adjusted Net Income | Beat | -$5.60 mln | -$11.20 mln (1 Analyst) |
Q2 Adjusted EBITDA | Beat | $7 mln | -$7.98 mln (1 Analyst) |
Q2 Gross Margin |
| 57.5% |
|
Q2 Adjusted Operating Income | Beat | $4 mln | -$11.20 mln (1 Analyst) |
Q2 Adjusted Operating Margin |
| 1.7% |
|
Analyst Coverage
The one available analyst rating on the shares is "buy"
The average consensus recommendation for the apparel & accessories peer group is "hold."
Wall Street's median 12-month price target for Fossil Group Inc is $5.00, about 65% above its August 12 closing price of $1.75
Press Release: ID:nGNX1mSsGg