CORRECTED-Fossil Group Q4 sales drops amid full-price shift and store closures
Overview
U.S. lifestyle accessories maker's Q4 net sales fell 18% yr/yr on full-price shift, store closures
Gross margin rose to 57.4% from 53.9% on improved product margins and sourcing initiatives
Outlook
Fossil Group expects 2026 net sales to decline 4% to 6%, with growth in Q4
Company forecasts 2026 adjusted operating margin between 3% and 5%
Fossil Group raises 2028 targets to net sales growth in low-to-mid single digits
Result Drivers
FULL-PRICE MODEL - Co said sales fell mainly due to a return to full-price selling and timing shift of wholesale shipments
STORE RATIONALIZATION - Store closures accounted for about four points of the Q4 sales decline
GROSS MARGIN GAINS - Gross margin rose due to improved product margins from full-price selling and sourcing initiatives
Company press release: ID:nGNX6wBwmb
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q4 Sales | Beat | $280.5 mln | $249.28 mln (2 Analysts) |
Q4 Adjusted EPS | Beat | -$0.15 | -$0.02 (1 Analyst) |
Q4 Adjusted Net Income | Miss | -$8.20 mln | -$4.80 mln (1 Analyst) |
Q4 Adjusted EBITDA | Beat | $15.8 mln | $7.25 mln (2 Analysts) |
Q4 Gross Margin |
| 57.40% |
|
Q4 Adjusted Operating Income | Beat | $11.4 mln | $3.94 mln (2 Analysts) |
Q4 Adjusted Operating Margin |
| 4.20% |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
The average consensus recommendation for the apparel & accessories peer group is "buy"
Wall Street's median 12-month price target for Fossil Group Inc is $6.00, about 48.9% above its March 10 closing price of $4.03
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