Fossil Group, Inc. reported a decline in financial performance for the second quarter of fiscal 2026, with net sales of $209.7 million, a decrease of 4.9% compared to $220.4 million in the same period last year. The company's gross profit increased to $130.8 million, up from $126.7 million, resulting in a gross profit margin of 62.4%, compared to 57.5% in the prior year. However, the company recorded a net loss of $10.6 million, or $0.18 per diluted share, compared to a loss of $2.3 million, or $0.04 per diluted share, in the previous year.

The decline in sales was primarily attributed to a 14.6% drop in direct-to-consumer sales, driven by a reduced store footprint and lower comparable retail sales. The company has reduced its store count by 17.8% since the end of the prior year, including the conversion of some stores to franchises. The Europe segment experienced the most significant decline, with sales down 17.0%, largely due to geopolitical tensions affecting consumer behavior. In contrast, the Americas segment saw a slight increase in sales of 1.0%, while the Asia segment reported a minor decrease of 1.0%.

Fossil Group has been implementing a Turnaround Plan aimed at returning to profitable growth, which includes restructuring efforts and cost-saving initiatives. The company incurred restructuring expenses of $3.4 million in the second quarter, down from $7.3 million in the prior year. The plan focuses on optimizing the operating model, driving profitable growth, and building shareholder value. The company expects to incur approximately $15 million in charges related to the Turnaround Plan in fiscal 2026.

As of July 4, 2026, Fossil Group had cash and cash equivalents of $79.0 million, down from $109.9 million a year earlier. The company also reported long-term debt of $203.0 million, an increase from $165.6 million in the prior year. The company’s total liquidity, which includes available borrowings under its revolving credit facility, was $96.6 million. Looking ahead, Fossil Group anticipates continued challenges due to macroeconomic factors, including inflation and changing consumer preferences, but remains focused on executing its strategic initiatives to improve financial performance.

About Fossil Group, Inc.

Fossil Group designs, markets, and distributes fashion accessories, primarily watches, jewelry, handbags, and small leather goods. It owns brands like Fossil, Skagen, Michele, Relic, and Zodiac, and licenses brands such as Michael Kors and Armani Exchange. Serving global markets through retail stores, e-commerce, and wholesale channels, the company emphasizes innovation, brand strength, and a multi-channel distribution model to attract style-conscious consumers.

This description was generated via AI from an annual report. Updated about 1 year ago.

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