Fossil Group, Inc. Reports Fourth Quarter and Full Year 2019 Results; Provides 2020 Financial Guidance

About this update from Fossil Group, Inc.

[{"type":"text","content":"RICHARDSON, Texas, Feb. 26, 2020 (GLOBE NEWSWIRE) -- Fossil Group, Inc. (NASDAQ: FOSL) today announced financial results for the fourth quarter and fiscal year ended December 28, 2019.\n Fourth Quarter Financial Overview Worldwide net sales of $712 million decreased 10% on a reported basis and 9% in constant currency.Double-digit growth in Asia and global third party e-commerce marketplaces, partially offsetting declines in the Wholesale channel.Strong performance in the Company’s latest generation display product, Gen 5, and new Hybrid HR watch, reflecting positive response to Fossil Group’s high performance technology and design innovation.Continued progress under the Company’s New World Fossil 2.0 - Transform to Grow Program (\"NWF 2.0\"), designed to achieve gross margin benefits and operating expense reductions totaling $200 million between 2019 and 2021.Gross margin of 43.3% compared to 53.0% a year ago, primarily reflecting a one-time, non-cash charge of $38 million related to the write-down of older generation connected inventory.Operating expenses of $309 million, down 12% year-over-year, attributable to continued progress under NWF 2.0.Operating loss of $1.0 million compared to operating income of $67 million a year ago due to softness in sales and gross margin, partially offset by benefits from NWF 2.0.Cash and cash equivalents of $200 million and net debt totaling $5.0 million at year-end. Kosta Kartsotis, Chairman and CEO, stated, “We are disappointed to close the year with a challenging fourth quarter, which primarily reflects lower than expected performance in our older generation connected products and ongoing softness in the department store channel. These pressures more than offset strong performance in our Gen 5 offering - our latest generation display product - and our Hybrid HR product, as well as double-digit growth in Asia and solid growth in our third party e-commerce channel. The top line softness resulted in heightened promotional activity and an inventory write-down, which had a substantial impact on our gross margins and profitability in the quarter.” “As we navigate the challenging operating environment, we are taking actions to pivot our business model by deploying greater resources toward the Direct to Consumer channel, accelerating our connected product offerings and building on our success in the...

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