NASDAQ$FOSL

Fossil Group Inc. · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Fossil Group's Q2 2023 financial performance was announced, marked by a decrease in net sales and an expanded Transform and Grow Plan.

Fossil Group reported a 13% decrease in worldwide net sales, totaling $322 million. The company's operating loss was $35 million, compared to $11 million in the same quarter last year. The Transform and Grow Plan was expanded to $300 million in annualized operating income benefits by the end of 2025.

  • Worldwide net sales decreased by 13% to $322 million.
  • Direct to consumer channels saw a 4% decrease in net sales in constant currency, while wholesale channels decreased by 19%.
  • Fossil brand sales decreased by 8% in constant currency, with traditional watch sales growing slightly but offset by declines in smartwatches and leathers.
  • Operating loss was $35 million, compared to a loss of $11 million a year ago.

Headline financials

Total Revenue

$322M

Previous: $371M-13.3%
EPS (adj)

-$0.40

Previous: -$0.33-21.2%
Operating Margin

-11.0%

No prior period
Gross Margin

48.7%

Previous: 51.6%-5.6%
Capital Expenditures

-$4.57M

Previous: -$4.47M-2.3%
Free Cash Flow

-$30.9M

Previous: -$23.4M-31.9%
Net Income

-$26.3M

Previous: -$18.9M-38.8%
Operating Income

-$35.3M

Previous: -$10.9M-222.9%
Gross Profit

$157M

Previous: $191M-18.1%
Cash & Equivalents

$132M

Previous: $167M-20.9%
Total Assets

$1.07B

Previous: $1.28B-16.4%
Stock-Based Comp

$1.69M

Previous: $3.84M-56.1%

Revenue & EPS history

Fossil · Revenue · Quarterly

$322M

Q2 2023-13.3%vs Q2 2022
Beat estimate in 6 of 11 quarters(55%)
ActualEstimate

Revenue by segment

Fossil · $225M total across 4 segments · Q1 2026

  • Watches
    $190M
  • Jewelry
    $20.1M
  • Leathers
    $10.6M
  • Other
    $3.52M

Forward guidance

The company is updating its guidance for the full year 2023 to reflect results from the second quarter, continued declines in wholesale channels in the Americas and Europe and a more gradual sales recovery in China than previously estimated.

Headwinds

  • Worldwide net sales declines of approximately 5% to 10%.
  • Adjusted operating margin to be -2% to -4% of net sales.
  • Restructuring charges of approximately $35 million for the full year 2023.
  • Continued declines in wholesale channels in the Americas and Europe.
  • A more gradual sales recovery in China than previously estimated.

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 2023

Historical avgQ2 2023

+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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