Fossil Group, Inc. (NASDAQ: FOSL) today announced financial results
for the fiscal third quarter ended September 28, 2024.
Third Quarter Summary
- Third quarter worldwide net sales
decreased to $288 million, down 16% on both a reported and constant
currency basis. The results included six points of negative impact
related to the Company’s strategic actions to exit the smartwatch
category and optimize its retail store portfolio.
- Gross margins expanded 240 basis points to 49.4%, primarily
reflecting progress under the Company’s Transform and Grow ("TAG")
Plan.
- Selling, general and administrative (“SG&A”) expenses of
$161 million were down 16% versus last year, primarily due to lower
compensation costs as a result of efficiencies from the Company’s
TAG Plan.
- Third quarter operating loss of $24
million compared to an operating loss of $46 million a year
ago. Adjusted operating loss of $19 million compared to an adjusted
operating loss of $31 million last year.
- Inventory totaled $226 million, a
decrease of 31% versus a year ago; the Company had total liquidity
of $130 million at quarter end, including cash and cash equivalents
of $106 million and $24 million of availability under its revolving
credit facility.
“In my first sixty days at Fossil Group, I’ve
been spending time with our brands, teams and partners around the
world to immerse myself in the business,” said Franco Fogliato,
Chief Executive Officer. “During this time, I have developed an
even stronger conviction about the Company’s significant potential
and our ability to return the business to profitable growth. We are
moving quickly to develop a plan that will be built upon
discipline, simplification and focus, leveraging our great brands
and talented teams to drive a successful turnaround and create
value for our shareholders.”
Third Quarter 2024 Operating
Results
Amounts referred to as “adjusted” as well as
“constant currency” are non-GAAP financial measures.
Reconciliations of these non-GAAP financial measures to their
closest reported GAAP measures are included at the end of this
press release.
- Net sales totaled
$287.8 million, a decrease of 16.4% on a reported basis and 16.3%
in constant currency compared to $344.1 million in the third
quarter of fiscal 2023. The sales decrease was largely driven by
overall category, consumer and channel softness. Declines in
smartwatch sales resulting from our exit of the category, and our
store rationalization initiatives comprised approximately six
points of the sales decline in the third quarter. Net sales in
constant currency declined 20% in the Americas, 11% in Europe and
17% in Asia. Wholesale sales in constant currency declined 12%,
while our direct to consumer sales decreased 24%. Within our direct
to consumer channels, comparable retail sales declined 12%. In our
major product categories, traditional watch sales declined 12% in
constant currency in the third quarter compared to the prior year
period. The leathers category decreased 28% and jewelry sales
declined 10% in constant currency during the third quarter. From a
brand lens, the majority of the brands in our portfolio decreased
in the third quarter.
- Gross profit
totaled $142.2 million compared to $161.7 million in the third
quarter of 2023. Gross margin increased 240 basis points to 49.4%
versus 47.0% in the third quarter of 2023. The year-over-year
increase was primarily due to initiatives under our TAG Plan,
including improved product margins in our core categories and our
exit from the smartwatch category. These favorable impacts were
partially offset by increased licensor minimum royalty costs.
- Operating expenses
totaled $166.7 million, down 20% compared to $208.1 million a year
ago. As a percentage of net sales, operating expenses were 57.9% in
the third quarter of 2024 compared to 60.5% in the prior year third
quarter. Operating expenses in the third quarter of 2024 included
$4.8 million of restructuring costs, primarily related to
professional services and employee costs, while operating expenses
in the third quarter of 2023 included $16.0 million of
restructuring costs. SG&A expenses were $160.9 million, down
16% compared to the third quarter of 2023. As a percentage of net
sales, SG&A expenses were 55.9% in the third quarter of 2024
compared to 55.6% in the prior year third quarter, largely driven
by decreased sales.
- Operating loss was
$24.5 million compared to $46.4 million in the third quarter of
2023. Operating margin was (8.5)% in the third quarter
of 2024 compared to (13.5)% in the prior year third quarter.
Adjusted operating loss totaled $18.7 million compared to $31.1
million in the third quarter of 2023. Adjusted operating margin was
(6.5)% in the third quarter of 2024 compared to (9.0)% in the prior
year third quarter.
- Interest expense
decreased to $4.9 million compared to $5.8 million in the third
quarter of 2023, primarily driven by a lower debt balance.
- Other income
(expense) was income of $3.6 million compared to expense
of $3.0 million in the third quarter of 2023, reflecting net
currency gains in the third quarter of 2024 as compared to net
currency losses in the prior year third quarter.
- Income (loss) before income
taxes was $(25.8) million compared to $(55.2) million in
the third quarter of 2023.
- Adjusted EBITDA
was $(12.3) million, or (4.3)% of net sales in the third quarter of
2024 and $(29.3) million, or (8.4)% of net sales in the prior year
quarter.
- Provision (benefit) for
income taxes was an expense of $6.2 million, resulting in
an effective income tax rate of (23.9)% compared to an expense of
$5.6 million and an effective tax rate of (10.1)% in the prior
year. The effective tax rate in the third quarter of 2024 differed
from the prior year third quarter primarily due to a change in the
Company’s global mix of earnings.
- Net loss totaled
$32.0 million with net loss per diluted share of $0.60, which
compares to net loss of $61.1 million and net loss per diluted
share of $1.16 in the prior year quarter. Adjusted net loss for the
third quarter was $27.4 million with adjusted net loss per diluted
share of $0.51 compared to adjusted net loss of $49.0 million with
adjusted net loss per diluted share of $0.93 in the prior year
quarter. During the third quarter of 2024, currencies
favorably affected net loss per diluted share by approximately
$0.07.
Balance Sheet Summary
As of September 28, 2024, the Company had total
liquidity of $130.1 million, including $106.3 million of cash and
cash equivalents and $23.8 million of availability under its
revolving credit facility. Inventories at the end of the third
quarter of 2024 totaled $226.4 million, a decrease of 31% versus a
year ago. Total debt was $175.7 million.
Transform and Grow Plan
The Company remains on track with its TAG Plan,
a comprehensive operational plan designed to reduce operating
expenses, improve operating margins and advance the Company’s
commitment to profitable growth. The plan encompasses multiple
workstreams with a target to drive $300 million in annualized
operating income benefits by the end of 2025. The TAG Plan
generated annualized operating income benefits of approximately
$125 million in 2023 and is expected to generate additional
annualized operating income benefits of at least $100 million in
2024. Restructuring costs associated with the TAG Plan are
estimated to be $40 million in fiscal year 2024.
Strategic Business Review
In March 2024, the Company announced a strategic
review of its current business model and capital structure. This
includes efforts to optimize its business model through additional
changes to its operations, as well as further structural cost
reductions, which are under consideration. The Company anticipates
this effort will expand on its current TAG Plan and could include
additional debt and equity financing options, including
monetization of various assets to strengthen its balance sheet. The
Company has retained Evercore to act as its financial advisor.
Outlook
The Company is revising its full year financial
outlook for 2024. Worldwide net sales are expected to be
approximately $1.1 billion, reflecting consumer and channel
softness, as well as approximately $100 million of negative impact
related to the exit of its smartwatch business, and the closure of
owned retail stores. Fiscal year adjusted operating margin(1) is
expected to be in the range of (6)% to (8)%. The Company expects to
generate positive free cash flow(2) in full year 2024, inclusive of
tax refunds of approximately $57 million, which were received in
the second quarter of 2024.
(1) A reconciliation of adjusted operating
margin, a non-GAAP financial measure, to a corresponding GAAP
measure is not available on a forward-looking basis without
unreasonable efforts due to the high variability and low visibility
of certain income and expense items that are excluded in
calculating adjusted operating margin. (2) Free cash flow is a
non-GAAP financial measure, defined as net cash from operating
activities less net cash used in investing activities. A
corresponding reconciliation of free cash flow to a corresponding
GAAP measure is not available on a forward-looking basis without
unreasonable effort.
Safe Harbor
Certain statements contained herein that are not historical
facts, including, but not limited to, statements regarding our
outlook, expected financial position, TAG Plan benefits and
expenses, liquidity and strategic review, constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 and involve a number of
risks and uncertainties. The actual results of the future events
described in such forward-looking statements could differ
materially from those stated in such forward-looking statements.
Among the factors that could cause actual results to differ
materially are: increased political uncertainty, the effect of
worldwide economic conditions; the effect of any pandemics; risks
related to the success of our restructuring program; the failure to
meet the continued listing requirements of Nasdaq; significant
changes in consumer spending patterns or preferences; interruptions
or delays in the supply of key components or products; acts of war
or acts of terrorism; loss of key facilities; a data security or
privacy breach or information systems disruptions; changes in
foreign currency valuations in relation to the U.S. dollar; lower
levels of consumer spending resulting from inflation, a general
economic downturn or generally reduced shopping activity caused by
public safety or consumer confidence concerns; the performance of
our products within the prevailing retail environment; customer
acceptance of both new designs and newly-introduced product lines;
changes in the mix of product sales; the effects of vigorous
competition in the markets in which we operate; compliance with
debt covenants and other contractual provisions and meeting debt
service obligations; risks related to the success of our business
strategy; the termination or non-renewal of material licenses; any
impact of minimum royalty commitments in excess of royalties
payable on actual sales; risks related to foreign operations and
manufacturing; changes in the costs of materials and labor;
government regulation and tariffs; our ability to secure and
protect trademarks and other intellectual property rights; levels
of traffic to and management of our retail stores; loss of key
personnel or failure to attract and retain key employees and the
outcome of current and possible future litigation, as well as the
risks and uncertainties set forth in the Company’s most recent
Annual Report on Form 10-K filed with the Securities and Exchange
Commission (the “SEC”). These forward-looking statements are based
on our current expectations and beliefs concerning future
developments and their potential effect on us. While management
believes that these forward-looking statements are reasonable as
and when made, there can be no assurance that future developments
affecting us will be those that we anticipate. Readers of this
release should consider these factors in evaluating, and are
cautioned not to place undue reliance on, the forward-looking
statements contained herein. The Company assumes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise, except
as required by law.
About Fossil
Group, Inc.
Fossil Group, Inc. is a global design,
marketing, distribution and innovation company specializing in
lifestyle accessories. Under a diverse portfolio of owned and
licensed brands, our offerings include watches, jewelry, handbags,
small leather goods, belts and sunglasses. We are committed to
delivering the best in design and innovation across our owned
brands, Fossil, Michele, Relic, Skagen and Zodiac, and licensed
brands, Armani Exchange, Diesel, DKNY, Emporio Armani, kate spade
new york, Michael Kors, and Tory Burch. We bring each brand story
to life through an extensive distribution network across numerous
geographies, categories and channels. Certain press release and SEC
filing information concerning the Company is also available at
www.fossilgroup.com.
Investor Relations: |
Christine Greany |
|
The Blueshirt Group |
|
(858) 722-7815 |
|
christine@blueshirtgroup.com |
|
|
Consolidated Income Statement Data |
For the 13
Weeks Ended |
|
For the 13
Weeks Ended |
|
For the 39 Weeks Ended |
|
For the 39 Weeks Ended |
($ in millions, except per share data): |
September 28, 2024 |
|
September 30, 2023 |
|
September 28, 2024 |
|
September 30, 2023 |
Net sales |
$ |
287.8 |
|
|
$ |
344.1 |
|
|
$ |
802.7 |
|
|
$ |
991.1 |
|
Cost of sales |
|
145.6 |
|
|
|
182.4 |
|
|
|
390.1 |
|
|
|
512.1 |
|
Gross profit |
|
142.2 |
|
|
|
161.7 |
|
|
|
412.6 |
|
|
|
479.0 |
|
Gross margin |
|
49.4 |
% |
|
|
47.0 |
% |
|
|
51.4 |
% |
|
|
48.3 |
% |
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
160.9 |
|
|
|
191.5 |
|
|
|
466.7 |
|
|
|
569.5 |
|
Other long-lived asset impairments |
|
1.0 |
|
|
|
0.6 |
|
|
|
1.9 |
|
|
|
0.8 |
|
Restructuring charges |
|
4.8 |
|
|
|
16.0 |
|
|
|
31.6 |
|
|
|
27.7 |
|
Total operating expenses |
$ |
166.7 |
|
|
$ |
208.1 |
|
|
$ |
500.2 |
|
|
$ |
598.0 |
|
Total operating expenses (% of net sales) |
|
57.9 |
% |
|
|
60.5 |
% |
|
|
62.3 |
% |
|
|
60.3 |
% |
Operating income (loss) |
|
(24.5 |
) |
|
|
(46.4 |
) |
|
|
(87.6 |
) |
|
|
(119.0 |
) |
Operating margin |
(8.5)% |
|
(13.5)% |
|
(10.9)% |
|
(12.0)% |
Interest expense |
|
4.9 |
|
|
|
5.8 |
|
|
|
14.1 |
|
|
|
16.1 |
|
Other income (expense) - net |
|
3.6 |
|
|
|
(3.0 |
) |
|
|
8.9 |
|
|
|
6.8 |
|
Income (loss) before income taxes |
|
(25.8 |
) |
|
|
(55.2 |
) |
|
|
(92.8 |
) |
|
|
(128.3 |
) |
Provision (benefit) for income taxes |
|
6.2 |
|
|
|
5.6 |
|
|
|
2.3 |
|
|
|
— |
|
Less: Net income attributable to noncontrolling interest |
|
— |
|
|
|
0.3 |
|
|
|
— |
|
|
|
0.6 |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(32.0 |
) |
|
$ |
(61.1 |
) |
|
$ |
(95.1 |
) |
|
$ |
(128.9 |
) |
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.60 |
) |
|
$ |
(1.16 |
) |
|
$ |
(1.80 |
) |
|
$ |
(2.47 |
) |
Diluted |
$ |
(0.60 |
) |
|
$ |
(1.16 |
) |
|
$ |
(1.80 |
) |
|
$ |
(2.47 |
) |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
53.2 |
|
|
|
52.5 |
|
|
|
52.9 |
|
|
|
52.2 |
|
Diluted |
|
53.2 |
|
|
|
52.5 |
|
|
|
52.9 |
|
|
|
52.2 |
|
`
Consolidated Balance Sheet Data ($ in
millions): |
September 28, 2024 |
|
September 30, 2023 |
Assets: |
|
|
|
Cash and cash equivalents |
$ |
106.3 |
|
$ |
116.1 |
Accounts receivable - net |
|
173.7 |
|
|
194.0 |
Inventories |
|
226.4 |
|
|
326.7 |
Other current assets |
|
69.5 |
|
|
148.1 |
Total current assets |
$ |
575.9 |
|
$ |
784.9 |
Property, plant and equipment - net |
$ |
45.2 |
|
$ |
68.6 |
Operating lease right-of-use assets |
|
135.5 |
|
|
154.5 |
Intangible and other assets - net |
|
55.8 |
|
|
55.2 |
Total long-term assets |
$ |
236.5 |
|
$ |
278.3 |
Total assets |
$ |
812.4 |
|
$ |
1,063.2 |
|
|
|
|
Liabilities and stockholders’ equity: |
|
|
|
Accounts payable, accrued expenses and other current
liabilities |
$ |
315.2 |
|
$ |
348.1 |
Short-term debt |
|
2.3 |
|
|
0.5 |
Total current liabilities |
$ |
317.5 |
|
$ |
348.6 |
Long-term debt |
$ |
173.4 |
|
$ |
255.9 |
Long-term operating lease liabilities |
|
120.6 |
|
|
142.1 |
Other long-term liabilities |
|
39.0 |
|
|
37.8 |
Total long-term liabilities |
$ |
333.0 |
|
$ |
435.8 |
Stockholders’ equity |
|
161.9 |
|
|
278.8 |
Total liabilities and stockholders’ equity |
$ |
812.4 |
|
$ |
1,063.2 |
Constant Currency Financial
Information
The following table presents the Company’s
business segment and product net sales on a constant currency basis
which are non-GAAP financial measures. To calculate net sales on a
constant currency basis, net sales for the current fiscal year
period for entities reporting in currencies other than the U.S.
dollar are translated into U.S. dollars at the average rates during
the comparable period of the prior fiscal year. The Company
presents constant currency information to provide investors with a
basis to evaluate how its underlying business performed excluding
the effects of foreign currency exchange rate fluctuations. The
constant currency financial information presented herein should not
be considered a substitute for, or superior to, the measures of
financial performance prepared in accordance with GAAP.
|
Net Sales For the 13 Weeks Ended |
|
Net Sales For the 39 Weeks Ended |
September 28, 2024 |
|
September 30, 2023 |
|
September 28, 2024 |
|
September 30, 2023 |
($ in millions) |
As Reported |
|
Impact of Foreign Currency Exchange Rates |
|
Constant Currency |
|
As Reported |
|
As Reported |
|
Impact of Foreign Currency Exchange Rates |
|
Constant Currency |
|
As Reported |
Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
121.3 |
|
$ |
1.2 |
|
|
$ |
122.5 |
|
$ |
152.6 |
|
$ |
351.0 |
|
$ |
0.3 |
|
|
$ |
351.3 |
|
$ |
437.2 |
Europe |
|
97.0 |
|
|
(1.3 |
) |
|
|
95.7 |
|
|
107.7 |
|
|
250.6 |
|
|
(1.9 |
) |
|
|
248.7 |
|
|
301.6 |
Asia |
|
69.0 |
|
|
0.2 |
|
|
|
69.2 |
|
|
83.0 |
|
|
199.7 |
|
|
4.3 |
|
|
|
204.0 |
|
|
247.3 |
Corporate |
|
0.5 |
|
|
(0.1 |
) |
|
|
0.4 |
|
|
0.8 |
|
|
1.4 |
|
|
— |
|
|
|
1.4 |
|
|
5.0 |
Total net sales |
$ |
287.8 |
|
$ |
— |
|
|
$ |
287.8 |
|
$ |
344.1 |
|
$ |
802.7 |
|
$ |
2.7 |
|
|
$ |
805.4 |
|
$ |
991.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product categories: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Watches: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Traditional watches |
$ |
223.2 |
|
$ |
0.3 |
|
|
$ |
223.5 |
|
$ |
252.7 |
|
$ |
603.9 |
|
$ |
1.7 |
|
|
$ |
605.6 |
|
$ |
714.2 |
Smartwatches |
|
4.0 |
|
|
(0.1 |
) |
|
|
3.9 |
|
|
17.3 |
|
|
21.2 |
|
|
0.1 |
|
|
|
21.3 |
|
|
59.5 |
Total watches |
$ |
227.2 |
|
$ |
0.2 |
|
|
$ |
227.4 |
|
$ |
270.0 |
|
$ |
625.1 |
|
$ |
1.8 |
|
|
$ |
626.9 |
|
$ |
773.7 |
Leathers |
|
23.9 |
|
|
— |
|
|
|
23.9 |
|
|
33.0 |
|
|
78.7 |
|
|
0.3 |
|
|
|
79.0 |
|
|
106.6 |
Jewelry |
|
31.5 |
|
|
(0.2 |
) |
|
|
31.3 |
|
|
34.6 |
|
|
81.9 |
|
|
0.5 |
|
|
|
82.4 |
|
|
91.0 |
Other |
|
5.2 |
|
|
— |
|
|
|
5.2 |
|
|
6.5 |
|
|
17.0 |
|
|
0.1 |
|
|
|
17.1 |
|
|
19.8 |
Total net sales |
$ |
287.8 |
|
$ |
— |
|
|
$ |
287.8 |
|
$ |
344.1 |
|
$ |
802.7 |
|
$ |
2.7 |
|
|
$ |
805.4 |
|
$ |
991.1 |
Adjusted EBITDA, Adjusted operating
income (loss), Adjusted net income (loss) and Adjusted earnings
(loss) per share
Adjusted EBITDA, Adjusted operating income
(loss), Adjusted net income (loss) and Adjusted earnings (loss) per
share are non-GAAP financial measures. We define Adjusted EBITDA as
our net income (loss) before the impact of income tax expense
(benefit), plus interest expense, amortization and depreciation,
impairment expense, other non-cash charges, stock-based
compensation expense, restructuring expense and unamortized debt
issuance costs included in loss on extinguishment of debt minus
interest income. We define Adjusted operating income (loss) as
operating income (loss) before impairment expense and restructuring
expense. We define Adjusted net income (loss) and Adjusted earnings
(loss) per share as net income (loss) attributable to Fossil Group,
Inc. and diluted earnings (loss) per share, respectively, before
impairment expense, restructuring expense and unamortized debt
issuance costs included in loss on extinguishment of debt. We have
included Adjusted EBITDA, Adjusted operating income (loss),
Adjusted net income (loss) and Adjusted earnings (loss) per share
herein because they are widely used by investors for valuation and
for comparing our financial performance with the performance of our
competitors. We also use both non-GAAP financial measures to
monitor and compare the financial performance of our
operations. Our presentation of Adjusted EBITDA,
Adjusted operating income (loss), Adjusted net income (loss) and
Adjusted earnings (loss) per share may not be comparable to
similarly titled measures other companies report.
Adjusted EBITDA, Adjusted operating income (loss), Adjusted net
income (loss) and Adjusted earnings (loss) per share are not
intended to be used as alternatives to any measure of our
performance in accordance with GAAP.
The following tables reconcile Adjusted EBITDA
to the most directly comparable GAAP financial measure, which is
income (loss) before income taxes. Certain line items
presented in the tables below, when aggregated, may not foot due to
rounding.
|
|
|
Fiscal 2023 |
|
Fiscal 2024 |
|
|
($ in
millions): |
|
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
Total |
Income (loss) before income taxes |
|
|
$ |
(27.8 |
) |
|
$ |
(30.4 |
) |
|
$ |
(36.6 |
) |
|
$ |
(25.8 |
) |
|
$ |
(120.6 |
) |
Plus: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
5.7 |
|
|
|
5.1 |
|
|
|
4.1 |
|
|
|
4.9 |
|
|
|
19.8 |
|
Amortization and depreciation |
|
|
|
4.6 |
|
|
|
4.5 |
|
|
|
3.9 |
|
|
|
3.8 |
|
|
|
16.8 |
|
Impairment expense |
|
|
|
1.3 |
|
|
|
0.4 |
|
|
|
0.6 |
|
|
|
1.0 |
|
|
|
3.3 |
|
Other non-cash charges |
|
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
0.1 |
|
|
|
(0.5 |
) |
|
|
(0.4 |
) |
Stock-based compensation |
|
|
|
1.1 |
|
|
|
1.0 |
|
|
|
0.6 |
|
|
|
0.6 |
|
|
|
3.3 |
|
Restructuring expense |
|
|
|
15.5 |
|
|
|
10.1 |
|
|
|
16.7 |
|
|
|
4.8 |
|
|
|
47.1 |
|
Restructuring cost of sales |
|
|
|
(1.3 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1.5 |
) |
Less: |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
0.9 |
|
|
|
1.1 |
|
|
|
1.1 |
|
|
|
1.1 |
|
|
|
4.2 |
|
Adjusted EBITDA |
|
|
$ |
(1.6 |
) |
|
$ |
(10.7 |
) |
|
$ |
(11.7 |
) |
|
$ |
(12.3 |
) |
|
$ |
(36.4 |
) |
|
|
Fiscal 2022 |
|
Fiscal 2023 |
|
|
($ in
millions): |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
Total |
Income (loss) before income taxes |
|
$ |
(4.0 |
) |
|
$ |
(39.6 |
) |
|
$ |
(33.5 |
) |
|
$ |
(55.2 |
) |
|
$ |
(132.3 |
) |
Plus: |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
5.8 |
|
|
|
5.0 |
|
|
|
5.3 |
|
|
|
5.8 |
|
|
|
21.9 |
|
Amortization and depreciation |
|
|
5.7 |
|
|
|
5.1 |
|
|
|
4.8 |
|
|
|
4.5 |
|
|
|
20.1 |
|
Impairment expense |
|
|
1.2 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.6 |
|
|
|
2.1 |
|
Other non-cash charges |
|
|
(0.3 |
) |
|
|
(0.2 |
) |
|
|
(0.5 |
) |
|
|
(0.2 |
) |
|
|
(1.2 |
) |
Stock-based compensation |
|
|
2.3 |
|
|
|
1.4 |
|
|
|
1.6 |
|
|
|
1.5 |
|
|
|
6.8 |
|
Restructuring expense |
|
|
0.7 |
|
|
|
7.1 |
|
|
|
4.6 |
|
|
|
16.0 |
|
|
|
28.4 |
|
Restructuring cost of sales |
|
|
— |
|
|
|
5.3 |
|
|
|
2.9 |
|
|
|
(1.3 |
) |
|
|
6.9 |
|
Unamortized debt issuance costs included in loss on extinguishment
of debt |
|
|
1.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.1 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
0.4 |
|
|
|
0.6 |
|
|
|
0.8 |
|
|
|
1.0 |
|
|
|
2.8 |
|
Adjusted EBITDA |
|
$ |
12.1 |
|
|
$ |
(16.4 |
) |
|
$ |
(15.4 |
) |
|
$ |
(29.3 |
) |
|
$ |
(49.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
The following tables reconcile Adjusted
operating income (loss), Adjusted net income (loss) and Adjusted
earnings (loss) per share to the most directly comparable GAAP
financial measures, which are operating income (loss), net income
(loss) attributable to Fossil Group, Inc. and diluted earnings
(loss) per share, respectively. Certain line items presented in the
table below, when aggregated, may not foot due to rounding.
|
For the 13 Weeks Ended September 28, 2024 |
($ in millions, except
per share data): |
As Reported |
Other Long-Lived Asset Impairment |
Restructuring Expenses |
As Adjusted |
Operating income (loss) |
$ |
(24.5 |
) |
$ |
1.0 |
$ |
4.8 |
$ |
(18.7 |
) |
Operating margin (% of net sales) |
(8.5)% |
|
|
(6.5)% |
Interest expense |
|
(4.9 |
) |
|
— |
|
— |
|
(4.9 |
) |
Other income (expense) - net |
|
3.6 |
|
|
— |
|
— |
|
3.6 |
|
Income (loss) before income taxes |
|
(25.8 |
) |
|
1.0 |
|
4.8 |
|
(20.0 |
) |
Provision (benefit) for income taxes |
|
6.2 |
|
|
0.2 |
|
1.0 |
|
7.4 |
|
Less: Net income attributable to noncontrolling interest |
|
— |
|
|
— |
|
— |
|
— |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(32.0 |
) |
$ |
0.8 |
$ |
3.8 |
$ |
(27.4 |
) |
Diluted earnings (loss) per
share |
$ |
(0.60 |
) |
$ |
0.02 |
$ |
0.07 |
$ |
(0.51 |
) |
|
For the 13 Weeks Ended September 30, 2023 |
($ in millions, except
per share data): |
As Reported |
Restructuring Cost of Sales |
Other Long-Lived Asset Impairment |
Restructuring Expenses |
As Adjusted |
Operating income (loss) |
$ |
(46.4 |
) |
$ |
(1.3 |
) |
$ |
0.6 |
$ |
16.0 |
$ |
(31.1 |
) |
Operating margin (% of net sales) |
(13.5)% |
|
|
|
(9.0)% |
Interest expense |
|
(5.8 |
) |
|
— |
|
|
— |
|
— |
|
(5.8 |
) |
Other income (expense) - net |
|
(3.1 |
) |
|
— |
|
|
— |
|
— |
|
(3.1 |
) |
Income (loss) before income taxes |
|
(55.2 |
) |
|
(1.3 |
) |
|
0.6 |
|
16.0 |
|
(39.9 |
) |
Provision for income taxes |
|
5.6 |
|
|
(0.3 |
) |
|
0.1 |
|
3.4 |
|
8.8 |
|
Less: Net income attributable to noncontrolling interest |
|
(0.3 |
) |
|
— |
|
|
— |
|
— |
|
(0.3 |
) |
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(61.1 |
) |
$ |
(1.0 |
) |
$ |
0.5 |
$ |
12.6 |
$ |
(49.0 |
) |
Diluted earnings (loss) per
share |
$ |
(1.16 |
) |
$ |
(0.02 |
) |
$ |
0.01 |
$ |
0.24 |
$ |
(0.93 |
) |
|
For the 39 Weeks Ended September 28, 2024 |
($ in millions, except
per share data): |
As Reported |
Restructuring Cost of Sales |
Other Long-Lived Asset Impairment |
Restructuring Expenses |
As Adjusted |
Operating income (loss) |
$ |
(87.7 |
) |
$ |
(0.2 |
) |
$ |
1.9 |
$ |
31.6 |
$ |
(54.4 |
) |
Operating margin (% of net sales) |
(10.9)% |
|
|
|
(6.8)% |
Interest expense |
|
(14.1 |
) |
|
— |
|
|
— |
|
— |
|
(14.1 |
) |
Other income (expense) - net |
|
9.0 |
|
|
— |
|
|
— |
|
— |
|
9.0 |
|
Income (loss) before income taxes |
|
(92.8 |
) |
|
(0.2 |
) |
|
1.9 |
|
31.6 |
|
(59.5 |
) |
Provision (benefit) for income taxes |
|
2.3 |
|
|
— |
|
|
0.4 |
|
6.6 |
|
9.3 |
|
Less: Net income attributable to noncontrolling interest |
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(95.1 |
) |
$ |
(0.2 |
) |
$ |
1.5 |
$ |
25.0 |
$ |
(68.8 |
) |
Diluted earnings (loss) per
share |
$ |
(1.80 |
) |
$ |
— |
|
$ |
0.03 |
$ |
0.47 |
$ |
(1.30 |
) |
|
For the 39 Weeks Ended September 30, 2023 |
($ in millions, except
per share data): |
As Reported |
Restructuring Cost of Sales |
Other Long-Lived Asset Impairment |
Restructuring Expenses |
As Adjusted |
Operating income (loss) |
$ |
(119.0 |
) |
$ |
6.8 |
$ |
0.8 |
$ |
27.7 |
$ |
(83.7 |
) |
Operating margin (% of net sales) |
(12.0)% |
|
|
|
(8.4)% |
Interest expense |
|
(16.1 |
) |
|
— |
|
— |
|
— |
|
(16.1 |
) |
Other income (expense) - net |
|
6.8 |
|
|
— |
|
— |
|
— |
|
6.8 |
|
Income (loss) before income taxes |
|
(128.3 |
) |
|
6.8 |
|
0.8 |
|
27.7 |
|
(93.0 |
) |
Provision for income taxes |
|
— |
|
|
1.4 |
|
0.2 |
|
5.8 |
|
7.4 |
|
Less: Net income attributable to noncontrolling interest |
|
(0.6 |
) |
|
— |
|
— |
|
— |
|
(0.6 |
) |
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(128.9 |
) |
$ |
5.4 |
$ |
0.6 |
$ |
21.9 |
$ |
(101.0 |
) |
Diluted earnings (loss) per
share |
$ |
(2.47 |
) |
$ |
0.10 |
$ |
0.01 |
$ |
0.42 |
$ |
(1.94 |
) |
Store Count Information
|
September 30, 2023 |
|
Opened |
|
Closed |
|
September 28, 2024 |
Americas |
143 |
|
2 |
|
29 |
|
116 |
Europe |
87 |
|
0 |
|
20 |
|
67 |
Asia |
73 |
|
2 |
|
7 |
|
68 |
Total stores |
303 |
|
4 |
|
56 |
|
251 |
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