Fossil Group, Inc. reported a significant decline in its financial performance for the fiscal year ending December 28, 2024, with total net sales of $1.145 billion, a decrease of 18.9% from $1.412 billion in the previous fiscal year. The company's net loss attributable to Fossil Group, Inc. was $102.7 million, or $1.94 per diluted share, compared to a net loss of $157.1 million, or $3.00 per diluted share, in fiscal 2023. The decline in sales was attributed to overall category softness, reduced consumer demand, and the company's exit from the smartwatch category, which collectively impacted sales by approximately $95 million.
In terms of operational changes, Fossil Group has been undergoing a strategic transformation through its "Transform and Grow" (TAG) plan initiated in early 2023, which aimed to reduce operating expenses and improve margins. The TAG plan was expanded in August 2023 to include a broader restructuring of operations, resulting in annualized operating income benefits of $280 million over two years. The company also appointed Franco Fogliato as CEO in September 2024, who is leading a new "Turnaround Plan" focused on refocusing on core brands, rightsizing the cost structure, and strengthening the balance sheet.
Fossil's operational metrics reflected challenges in customer engagement, with comparable retail sales decreasing by 14.5% during fiscal 2024. The company closed 59 underperforming stores, reducing its total store count to 248. The Americas segment accounted for 45% of consolidated revenue, with net sales in this region decreasing by 19.6%. The Europe and Asia segments also experienced declines of 18.2% and 17.7%, respectively. The company reported a gross profit margin improvement to 52.2%, up from 48.1% in the previous year, primarily due to improved product margins and the exit from the smartwatch category.
Looking ahead, Fossil Group is focused on enhancing its liquidity and addressing upcoming debt maturities, with $168.1 million in outstanding debt as of the end of fiscal 2024. The company has initiated plans to monetize non-core assets and improve working capital. Despite the challenges, management remains optimistic about achieving positive adjusted operating margins and is committed to executing its Turnaround Plan to restore profitable growth. The company anticipates achieving SG&A cost savings of approximately $100 million in fiscal 2025 as part of its restructuring efforts.
About Fossil Group, Inc.
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