Overview

* Fossil Group ( FOSL ) Q2 sales decline 15.2% yr/yr to $220 mln, beat estimates, per LSEG data

* Adjusted net income, EBITDA, and operating income all beat analyst expectations

* Co raises full-year 2025 guidance, announces refinancing plan to strengthen balance sheet

Outlook

* Fossil raises 2025 guidance, sees mid-teens sales decline

* Company expects adjusted operating margin to be break even to positive

* Fossil's 2025 sales guidance excludes $45 mln from store closures

Result Drivers

* SALES DECLINE - Net sales fell 15.2% yr/yr due to category, consumer, and channel softness, exit from smartwatch category, and store rationalization

* GROSS MARGIN IMPROVEMENT - Gross margin increased 490 basis points to 57.5% due to improved product margins, reduced freight costs, and sourcing initiatives

* OPERATING EXPENSE REDUCTION - Operating expenses decreased 30.8% yr/yr, aided by a gain from the sale of a European warehouse and restructuring efforts

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Sales Beat $220 mln $198 mln

(1

Analyst)

Q2 Beat -$5.60 -$11.20

Adjusted mln mln (1

Net Analyst)

Income

Q2 Beat $7 mln -$7.98

Adjusted mln (1

EBITDA Analyst)

Q2 Gross 57.5%

Margin

Q2 Beat $4 mln -$11.20

Adjusted mln (1

Operatin Analyst)

g Income

Q2 1.7%

Adjusted

Operatin

g Margin

Analyst Coverage

* The one available analyst rating on the shares is "buy"

* The average consensus recommendation for the apparel & accessories peer group is "hold."

* Wall Street's median 12-month price target for Fossil Group Inc ( FOSL ) is $5.00, about 65% above its August 12 closing price of $1.75

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)