Third quarter worldwide net sales at Fossil Group decreased to 288 million dollars, down 16 percent on both a reported and constant currency basis.
Adjusted EBITDA was negative 12.3 million dollars or negative 4.3 percent of net sales, while net loss totalled 32 million dollars or per diluted share loss of 60 cents. Adjusted net loss for the quarter was 27.4 million dollars with adjusted net loss per diluted share of 51 cents.
Commenting on the results, Franco Fogliato, the company’s CEO said: “In my first sixty days at Fossil Group, I have developed an even stronger conviction about the company’s significant potential and our ability to return the business to profitable growth.”
Gross margins for the quarter expanded 240 basis points to 49.4 percent. Third quarter operating loss was 24 million dollars, while adjusted operating loss was 19 million dollars.
The company said that net sales in constant currency declined 20 percent in the Americas, 11 percent in Europe and 17 percent in Asia. Wholesale sales in constant currency declined 12 percent, while direct to consumer sales decreased 24 percent. Within the direct to consumer channels, comparable retail sales declined 12 percent.
Among the major product categories, traditional watch sales declined 12 percent in constant currency, the leathers category decreased 28 percent and jewellery sales declined 10 percent. From a brand lens, the majority of the brands in the portfolio decreased in the third quarter.
For the year ahead, the company added that worldwide net sales are expected to be approximately 1.1 billion dollars, reflecting consumer and channel softness, as well as approximately 100 million dollars of negative impact related to the exit of its smartwatch business, and the closure of company-owned retail stores.