Fossil Group Q2 net sales -13% to $322M; expands cost-saving plan to $300M by 2025

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.