NASDAQ$FOSL

Fossil Group Inc. · Q2 2020 earnings

Q2 2020 earnings · · Investor relations

Briefing

Fossil's financial performance was negatively impacted by COVID-19 related store closures, but digital channels showed strong growth and cost reduction efforts led to lower operating expenses.

Fossil Group's Q2 2020 net sales decreased by 48% due to COVID-19 related store closures, but e-commerce sales increased significantly. The company reduced operating expenses and maintained a strong cash position. They are not providing full year guidance due to macro uncertainties.

  • Worldwide net sales decreased 48% to $259 million due to COVID-19 impacts.
  • E-commerce sales from owned websites increased 138% and third-party marketplaces increased 20%.
  • Gross margin increased 140 basis points to 54.3% due to e-commerce mix and reduced licensor royalty costs.
  • Operating expenses decreased by $86 million, or 33%, due to NWF 2.0 program and cost reduction efforts.

Headline financials

Total Revenue

$259M

Previous: $501M-48.3%
EPS (adj)

-$0.28

Previous: -$0.04-600.0%
Gross Margin

54.3%

No prior period
Capital Expenditures

-$5.65M

Previous: -$10.5M+46.3%
Free Cash Flow

-$28.6M

Previous: -$17.1M-67.1%
Net Income

-$23M

Previous: -$6.61M-247.4%
Operating Income

-$36.8M

Previous: $1.68M-2289.5%
Gross Profit

$141M

Previous: $265M-47.0%
Cash & Equivalents

$278M

Previous: $227M+22.5%
Total Assets

$1.45B

Previous: $1.61B-9.8%
Stock-Based Comp

$2.87M

Previous: $5.24M-45.2%

Revenue & EPS history

Fossil · Revenue · Quarterly

$259M

Q2 2020-48.3%vs Q2 2019
Beat estimate in 6 of 16 quarters(38%)
ActualEstimate

Revenue by segment

Fossil · $259M total across 4 segments · Q2 2020

  • Watches
    $209M-49.4%
  • Leathers
    $27M-49.1%
  • Jewelry
    $15M-28.6%
  • Other
    $8M-42.9%

Forward guidance

The Company anticipates that third quarter worldwide net sales will decline in the range of 35% to 45%, reflecting continued contraction in retail and wholesale, partly offset by ongoing strength in e-commerce channels.

Tailwinds

  • Ongoing strength in e-commerce channels

Headwinds

  • Continued contraction in retail
  • Continued contraction in wholesale
  • Macro uncertainties
  • Fluid COVID-19 impacts

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q2 2020

Historical avgQ2 2020

+0.8%

Avg return

Earnings day

+4.1%

Avg return

5 days after

+5.9%

Avg return

30 days after

45%

29 / 65 earnings

Positive

+102.3%

Q4 2017

Best reaction

-37.8%

Q3 2015

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+5.6%-6.1%+6.6%
Q4 2025+16.8%+14.3%+24.8%
Q3 2025-9.2%-3.3%+85.7%
Q2 2025+31.5%+74.6%+72.4%
Q1 2025+18.0%+34.1%+5.6%
Q4 2024+29.1%+3.1%-23.6%
Q3 2024-10.8%-6.9%+51.5%
Q2 2024+1.8%-0.9%-2.8%
Q1 2024-4.7%+6.2%+25.8%
Q4 2023-5.6%-1.2%+4.7%
Q3 2023-34.3%-35.4%-28.1%
Q2 2023-10.4%-16.3%-17.9%
Q1 2023-9.2%-32.3%-27.2%
Q4 2022-13.4%-15.3%-24.9%
Q3 2022+10.3%+17.7%+21.6%
Q2 2022-4.2%-12.1%-40.2%
Q1 2022-10.2%-10.9%-23.3%
Q4 2021-28.3%-36.3%-25.3%
Q3 2021+16.7%+13.0%-28.2%
Q2 2021+9.1%+7.6%-3.7%
Q1 2021+0.7%+20.8%+38.6%
Q3 2020+18.1%+42.9%+111.3%
Q2 2020+10.2%+18.9%+50.1%
Q1 2020+27.1%+136.2%+29.2%
Q4 2019-19.4%-19.6%-36.2%
Q3 2019-23.4%-36.5%-42.9%
Q2 2019+9.1%-4.4%+34.6%
Q1 2019+17.0%+9.1%-10.4%
Q4 2018-5.9%-8.2%-9.6%
Q3 2018-7.7%-16.9%-25.7%
Q2 2018-18.9%-18.7%-19.4%
Q1 2018+23.1%+27.5%+90.6%
Q4 2017+102.3%+73.1%+38.4%
Q3 2017-18.8%-5.4%-3.9%
Q2 2017-20.8%-26.8%-21.7%
Q1 2017-16.9%-24.4%-38.5%
Q4 2016-15.2%-9.8%-27.1%
Q3 2016-0.6%+5.7%+27.0%
Q2 2016-0.6%+2.9%-8.4%
Q1 2016-27.9%
Q4 2015+32.9%
Q3 2015-37.8%
Q2 2015-6.0%
Q1 2015-5.6%
Q4 2014-15.0%
Q3 2014+9.0%
Q2 2014-6.5%
Q1 2014-10.8%
Q4 2013+5.3%
Q3 2013-1.3%
Q2 2013+12.8%
Q1 2013+10.7%
Q4 2012-2.1%
Q3 2012-10.8%
Q2 2012+25.2%
Q1 2012+4.8%
Q4 2011+3.6%
Q3 2011+1.2%
Q2 2011+9.5%
Q4 2009+6.9%
Q1 2011+3.1%
Q3 2010-1.3%
Q4 2010-1.1%
Q2 2010-1.1%
Q1 2010-4.6%

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