Fossil Group, Inc. reported a significant decline in its financial performance for the fiscal year ending January 3, 2026, with total net sales of $1.004 billion, a decrease of 12.3% from $1.145 billion in the previous fiscal year. The company experienced a net loss of $78.3 million, or $1.45 per diluted share, compared to a net loss of $102.7 million, or $1.94 per diluted share, in fiscal 2024. The decline in sales was attributed to a shift to a full-price selling model in its direct-to-consumer channels and a decrease in sales across various product categories, particularly in smartwatches, which saw a 52.6% drop as the company exited that market segment.
In response to these challenges, Fossil implemented a Turnaround Plan initiated in September 2024 under the leadership of newly appointed CEO Franco Fogliato. The plan focuses on three key areas: refocusing on core businesses, rightsizing the cost structure, and strengthening the balance sheet. The company achieved approximately $100 million in selling, general, and administrative (SG&A) cost savings in fiscal 2025, primarily through workforce reductions and the closure of 49 underperforming retail stores. The gross profit margin improved to 56.1%, up from 52.2% in the previous year, driven by better product margins and cost management.
Fossil's operational metrics reflected a challenging retail environment, with global comparable retail sales decreasing by 23.3%. The Americas segment accounted for 42.9% of total net sales, while Europe and Asia contributed 33.2% and 23.8%, respectively. The company reported a total of 199 stores at the end of fiscal 2025, down from 248 the previous year, as part of its strategy to optimize its retail footprint. The decline in store count and sales was particularly pronounced in the Americas, where net sales fell by 16.4%.
Looking ahead, Fossil aims to drive profitable growth by leveraging its FOSSIL brand platform and enhancing consumer engagement through storytelling and product innovation. The company plans to stabilize its e-commerce business and reduce the pace of store closures. Additionally, Fossil is focused on optimizing its operating model and building shareholder value, with expectations of returning to top-line growth and improved operating margins over the next three years. The company remains cautious about external factors, including ongoing tariff impacts and economic conditions that could affect consumer spending.
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.
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