NASDAQ$FOSL

Fossil Group Inc. · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Reported a decrease in net sales and operating loss compared to the previous year, while implementing the TAG Plan to improve profitability.

Fossil Group reported a 21% decrease in worldwide net sales, with a significant operating loss compared to the previous year's operating income. The company is focused on executing its TAG Plan to reduce costs and improve profitability, expecting $100 million in annualized cost savings for 2023.

  • Worldwide net sales decreased by 21% to $344 million.
  • Operating loss was $46 million, a decline from the previous year's operating income of $22 million.
  • Direct to consumer channels saw a 12% decrease in net sales in constant currency, with a 6% decrease in comparable retail sales.
  • Inventory decreased by 28% to $327 million, and the company's total liquidity was $140 million at quarter end.

Headline financials

Total Revenue

$344M

Previous: $436M-21.1%
EPS (adj)

-$0.93

Previous: $0.12-875.0%
Capital Expenditures

-$7.15M

Previous: -$8.72M+18.0%
Free Cash Flow

-$68M

Previous: -$2.44M-2690.9%
Net Income

-$60.8M

Previous: $6.28M-1068.0%
Operating Income

-$46.4M

Previous: $22.5M-306.4%
Gross Profit

$162M

Previous: $220M-26.4%
Cash & Equivalents

$116M

Previous: $163M-28.6%
Total Assets

$1.06B

Previous: $1.31B-19.1%
Stock-Based Comp

$1.53M

Previous: -$264K+679.9%

Revenue & EPS history

Fossil · Revenue · Quarterly

$344M

Q3 2023-21.1%vs Q3 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

Fossil Group updated its full year 2023 guidance, expecting a more significant decline in worldwide net sales and a lower adjusted operating margin than previously anticipated.

Tailwinds

  • Prevailing currency rates are projected to positively impact sales by 70 basis points.
  • Company expects full year 2023 adjusted operating margin in the range of -6% to -8%
  • The company is on track to capture expected annualized cost savings of approximately $100 million

Headwinds

  • Worldwide net sales declines of approximately 14% to 17% versus prior guidance of negative 5% to negative 10%.
  • The expected year-over-year decline reflects an estimated fourth quarter net sales decline of 8% to 19%.
  • The company expects an estimated fourth quarter adjusted operating margin of flat to -5%.
  • Ongoing declines in the wholesale channel in the Americas and Europe
  • A more gradual than expected recovery of sales trends in China and current trends in our retail stores.

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 Q3 2023

Historical avgQ3 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%
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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