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Fossil reports smaller-than-expected Q2 adjusted net loss

ReutersAug 13, 2025 8:18 PM


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

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