Fossil Group shares plunge14% after mixed Q3 results

RICHARDSON, TX - Fossil Group, Inc. (NASDAQ:FOSL) shares plunged 14% Friday morning after the company reported mixed third quarter results, with revenue exceeding expectations but earnings falling significantly short of analyst estimates.

The watchmaker and accessories company reported third quarter revenue of $270.2 million, surpassing the consensus estimate of $233.32 million. However, the company posted an adjusted loss per share of -$0.63, considerably worse than analyst expectations of -$0.25. Revenue declined 6.1% compared to the same quarter last year.

Fossil’s stock tumbled following the announcement as investors reacted negatively to the wider-than-expected loss despite the revenue beat. The company’s operating loss was $21.7 million, representing an operating margin of -8.0%, a slight improvement from -8.5% in the prior year quarter.

"We are pleased to report another quarter of progress and momentum under our turnaround as our teams continue to deliver superior execution against the three key pillars of our plan," said Franco Fogliato, Chief Executive Officer. "Importantly, this week we completed the successful transformation of our balance sheet."

The company’s traditional watch sales decreased 1% in constant currency compared to the prior year period, while the leathers category fell 37% and jewelry sales declined 23%. From a regional perspective, net sales in constant currency declined 9% in the Americas, 10% in Europe, but increased 2% in Asia.

Fossil reiterated its full-year 2025 guidance, expecting worldwide net sales to decline in the mid-teens and adjusted operating margin to be break-even to slightly positive. The company’s guidance includes an expected impact of approximately $45 million related to retail store closures.

The company recently completed a balance sheet transformation, extending its debt maturity by three years and securing $32.5 million in new financing, which management believes will provide additional financial flexibility to support its turnaround efforts.

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