Business
Fossil Group, Inc. Reports Second Quarter 2023 Financial Results
Triples Transform and Grow Plan to $300 Million Provides Updated Full Year 2023 Outlook RICHARDSON, Texas, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Fossil Group,
About this update from Fossil Group, Inc.
[{"type":"text","content":"Triples Transform and Grow Plan to $300 Million Provides Updated Full Year 2023 Outlook RICHARDSON, Texas, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Fossil Group, Inc. (NASDAQ: FOSL) today announced financial results for the fiscal second quarter ended July 1, 2023. Second Quarter Summary Second quarter worldwide net sales totaled $322 million, decreasing 13%. Net sales in the Company’s direct to consumer channels were down 4% in constant currency, with comparable retail sales growth of 3%. Net sales in our wholesale channels were down 19%. FOSSIL brand sales grew slightly in traditional watches, more than offset by declines in smartwatches and leathers, resulting in a total brand sales decline of 8% in constant currency.Operating loss of $35 million compared to a loss of $11 million a year ago. Adjusted operating loss of $28 million compared to adjusted operating loss of $8 million last year. Inventory totaled $324 million, a decrease of 26% versus a year ago; and the Company total liquidity of $205 million at quarter end. Expanded Transform and Grow Plan The Company is expanding its previously announced Transform and Grow Plan (“TAG Plan”) following a more comprehensive review of its business model. The financial goals of the TAG Plan have expanded beyond operating expense reductions to include gross margin improvements, which are expected to drive incremental operating income benefits over the next three years. The expanded TAG Plan is expected to generate approximately $300 million of annualized operating income benefits by the end of 2025. The previously announced TAG Plan was expected to generate $100 million of annualized operating income benefits by the end of 2024. In connection with the TAG Plan, the Company expects to incur charges of approximately $35 million in 2023, and approximately $100 million - $120 million over the duration of the program. With these measures, our goal is to achieve adjusted gross margins in the low to mid 50% range and adjusted operating margins of approximately 10%. To execute the expanded TAG Plan, the Company has created a Transformation Office and will partner with Alvarez & Marsal’s Consumer and Retail Group, leaders in consumer and retail transformation. In addition to the program outlined above, the Transformation Office is focused on the three growth pillars outlined in March 2023, which incl...