Fossil Group has outlined its results for the second quarter ended June 29, 2024, a period in which the lifestyle brand has continued to carry out a transformation plan and strategic review contributing to results that fell in line with expectations, according to interim CEO, Jeffrey Boyer.
In a press release, Boyer said the “strong execution” of the initiatives, which he further noted the company had made “continued progress” on, had aided in gross margin expansion, cost reduction and adjusted operating margin improvement for the quarter.
Gross margin, for example, increased 390 basis points to 52.6 percent versus 48.7 percent a year ago, driven by projects under the Transform and Grow Plan (TAG), including the company’s exit from the smartwatch category.
Operating loss slightly narrowed from the prior 35.3 million dollars to 34 million dollars, akin to the slight reduction in adjusted EBITDA, which fell from 15.4 million dollars in the same quarter of the year prior to 11.7 million dollars. Net loss totalled 38.8 million dollars, however, up on 2023’s 26.5 million dollars.
A similar sentiment could be seen for net sales, which decreased 19.3 percent over Q2 to 260 million dollars, compared to last year’s 322 million dollars. Fossil attributed the smartwatch category exit and store rationalisation initiatives as the cause.
Asia took a particular hit, with sales dropping 20 percent. This was compared to further declines in the Americas and Europe, where sales fell 18 and 15 percent respectively.
For the full year 2024, Fossil is anticipating its net sales to be approximately 1.2 billion dollars, reflecting “consumer and channel softness”. Its operating margin, meanwhile, is forecast to be in the range of -3 to -5 percent.
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