2023-08-09 17:39:01 ET
Fossil Group ( NASDAQ: FOSL ) tumbled 11% after the close on Wednesday as it forecast a worse-than-expected outlook.
The watchmaker reported non-GAAP EPS of -$0.40 and revenue of $322M, down 13% from a year earlier. FOSL updated guidance to show continued declines in wholesale channels in the Americas and Europe and a more gradual sales recovery in China than previously estimated.
For fiscal year 2023, the company expects worldwide net sales declines of approximately 5% to 10% versus prior guidance of net sales declines of 5% to growth of 1%. Adjusted operating margin for the year is expected to be -2% to -4% of net sales, down from prior guidance of flat to 3%.
FOSL said it is expanding its “Transform and Grow Plan” to go beyond operating expense reductions to include gross margin improvements. The plan is expected to generate approximately $300M of annualized operating income benefits by the end of 2025, versus a previous expectation of $100M by end 2024.
The company intends to revitalize the Fossil brand, maximize its licensed brand portfolio in watches and jewelry and increase premium watch offerings.
“We are taking bold and significant steps to reshape our business and financial model,” Chief Executive Officer Kosta Kartsotis said in a statement.
“The actions to be taken under this expanded Transform and Grow Plan will better fuel our growth strategies and are designed to return the company to a double digit operating margin model and thereby create shareholder value.”
FOSL is down 63% in the past 12 months.
More on consumer stocks:
- Fossil Non-GAAP EPS of -$0.40, revenue of $322M
- LVMH's U.S. consumer pullback could reverberate across luxury brands
- Signet Jewelers’ lackluster earnings report leads peers lower
For further details see:
Fossil slumps as forecasts worsen for the year