Fourth Quarter Net Sales of $959 Million;
Diluted EPS of $1.03
Fossil Group, Inc. (NASDAQ:FOSL) (the “Company” or “Fossil
Group”) today reported its financial results for the fourth quarter
and fiscal year ended December 31, 2016. In the fourth
quarter of fiscal 2016, the stronger U.S. dollar negatively
impacted net sales by $18.3 million. Fourth quarter fiscal
2016 net sales decreased 3% (2% on a constant currency basis) as
compared to the fourth quarter of fiscal 2015.
For fiscal year 2016, the impact from the strong
U.S. dollar negatively impacted net sales by $45.4 million.
Fiscal year 2016 net sales decreased 6% (4% on a constant currency
basis) as compared to fiscal 2015.
Fourth Quarter and Fiscal Year 2016
Revenue SummaryIn the fourth quarter of fiscal 2016,
reported worldwide net sales decreased 3% or $33.3 million as
growth in the SKAGEN® and FOSSIL® brands was offset by a decline in
the Company’s multi-brand licensed watch portfolio with declines in
traditional watches largely offset by growth in connected
watches. Declines in leathers and jewelry and changes in
foreign currency also negatively impacted net sales. The
following table provides a summary of net sales performance for the
fiscal 2016 fourth quarter and fiscal year 2016 compared to the
fiscal 2015 fourth quarter and fiscal year 2015.
|
Fourth Quarter 2016 |
|
Full Year 2016 |
|
Reported Results (1) |
|
Constant Currency (2) |
|
Reported Results (1) |
|
Constant Currency (2) |
|
|
|
|
|
|
|
|
Total
Company |
(3 |
)% |
|
(2 |
)% |
|
(6 |
)% |
|
(4 |
)% |
Americas |
(7 |
)% |
|
(6 |
)% |
|
(8 |
)% |
|
(7 |
)% |
Europe |
(4 |
)% |
|
+1 |
% |
|
(6 |
)% |
|
(3 |
)% |
Asia |
+13 |
% |
|
+12 |
% |
|
+4 |
% |
|
+4 |
% |
|
|
|
|
|
|
|
|
Watches |
(2 |
)% |
|
Flat |
|
|
(6 |
)% |
|
(4 |
)% |
Leathers |
(6 |
)% |
|
(5 |
)% |
|
(4 |
)% |
|
(3 |
)% |
Jewelry |
(8 |
)% |
|
(5 |
)% |
|
(8 |
)% |
|
(6 |
)% |
|
|
|
|
|
|
|
|
(1) Includes impacts from currency.(2) Eliminates the effect of
the stronger U.S. dollar in fiscal 2016 to give investors a better
understanding of the underlying trends within the business. See
constant currency financial information at the end of this release
for more information.
The Company reported net income for the fourth
quarter of fiscal 2016 of $49.7 million compared to $70.4 million
for the fourth quarter of fiscal 2015. Diluted earnings per
share were $1.03, compared to $1.46 for the fourth quarter of
fiscal 2015. Diluted earnings per share for the fourth
quarter of fiscal 2016 of $1.03 included a restructuring charge of
$0.21 per diluted share, purchase accounting costs associated with
Misfit, Inc. of $0.08 per diluted share and negative impact
from currency of $0.04 per diluted share. Currencies,
including both the translation impact on operating earnings and the
impact of foreign currency hedging contracts, negatively affected
the year-over-year EPS comparison by $0.22.
For fiscal year 2016, the Company reported net
income of $78.9 million compared to $220.6 million for fiscal
2015. Diluted earnings per share were $1.63, compared to
$4.51 for fiscal 2015. Diluted earnings per share for fiscal
2016 of $1.63 included a restructuring charge of $0.43 per diluted
share, purchase accounting costs associated with Misfit, Inc.
of $0.37 per diluted share, negative impact from currency of $0.17
per diluted share and the benefit of real estate transactions of
$0.16 per diluted share. Currencies, including both the
translation impact on operating earnings and the impact of foreign
currency hedging contracts, negatively affected the year-over-year
EPS comparison by $0.87.
Kosta Kartsotis, Chief Executive Officer,
commented on the results. “The fourth quarter of 2016 was
pivotal for Fossil Group with our wearable launches demonstrating
they could be the catalyst to drive growth in the watch
category. Delivering some stability in the watch category
during the quarter reinforces our belief that with our technology
capabilities, we can turn what was once a headwind into a
tailwind. During the quarter, we also began executing against
our New World Fossil initiative by closing underperforming stores,
adjusting our expense base and enhancing our supply chain, all
actions that we believe will enable us to improve our financial
performance in the future.”
Mr. Kartsotis continued, “Our mission in
2017 is very clear, to build upon the early success of wearables
and execute against our New World Fossil initiative. We’ll
double our efforts in wearables by launching over 300 skus,
introducing new brands to the platform and enhancing engineering to
enable additional functionality in more stylish and slimmer
cases. We’ll continue to maximize the power of our owned
brands and with an emphasis on innovation, work to stabilize and
grow our licensed brands. We will also be relentless in
pursuing the full potential of our New World Fossil initiative in
2017 and beyond. Driving efficiencies in everything we do
from production to distribution and with our new operating
structure in place, we’ll have a tremendous opportunity to leverage
as we drive growth.”
Mr. Kartsotis concluded, “We continue to be
confident in the strategies we are pursuing and their ability to
enable us to improve our financial performance and drive long-term
shareholder value. Our success with wearables over the last
year clearly shows that our pursuit of the category and expanding
our addressable market is a significant long-term opportunity for
the company. As we pursue building a more nimble and
responsive operating platform through our New World Fossil
initiative, we’ll be even better positioned to improve
profitability in a very leverageable business model.”
Operating ResultsCompared to
the fourth quarter of fiscal 2015, the impact of a stronger U.S.
dollar decreased the Company’s fiscal 2016 reported net sales by
$18.3 million and operating income by $7.1 million. During
fiscal 2016, the impact of a stronger U.S. dollar decreased the
Company’s reported net sales by $45.4 million and operating income
by $31.7 million. The following discussion of the Company’s
net sales is presented on a GAAP basis and in constant dollars and
reflects regional performance based on sales in all channels within
the geographic location.
Fourth quarter fiscal 2016 worldwide net sales
decreased $33.3 million or 3% and $15.0 million in constant
currency (a 2% decline) compared to the fourth quarter of fiscal
2015, with growth in SKAGEN and FOSSIL offset by a decline in the
licensed portfolio. Across product categories, sales in
watches were down 2% (flat in constant currency) and declined in
leathers and jewelry. For fiscal 2016, worldwide net sales
decreased $186.4 million or 6% and $141.0 million in constant
currency (a 4% decline) compared to fiscal 2015, with growth in the
SKAGEN and FOSSIL brands offset by a decline in the
licensed portfolio.
Net sales in the Americas decreased $35.3
million or 7% and $31.8 million in constant currency (a 6% decline)
compared to the fourth quarter of fiscal 2015, with a decline in
watches, leathers and jewelry compared to last fiscal year. A
sales decline in the U.S. drove the decrease in the region.
For fiscal 2016, net sales in the Americas decreased $137.0 million
or 8% and $123.9 million in constant currency (a 7% decline)
compared to fiscal 2015, with declines in all product
categories.
Net sales in Europe decreased $14.4 million or
4% and increased $2.1 million in constant currency (a 1% increase)
compared to the fourth quarter of fiscal 2015, with constant
currency growth in watches partially offset by a decline in jewelry
and leathers compared to last fiscal year. Within the region,
growth in travel retail and Spain was partially offset by a decline
in the U.K. and Germany. For fiscal 2016, net sales in Europe
decreased $67.7 million or 6% and $37.1 million in constant
currency (a 3% decline) compared to fiscal 2015, with a constant
currency increase in leathers offset by declines in watches and
jewelry.
Net sales in Asia increased $16.4 million or 13%
and $14.7 million in constant currency (a 12% increase) compared to
the fourth quarter of fiscal 2015, with an increase in watches,
jewelry and leathers compared to last fiscal year. Within the
region, an increase in India, China and Australia was partially
offset by a decline in Taiwan. For fiscal 2016, net sales in
Asia increased $18.3 million or 4% and $20.0 million in constant
currency (a 4% increase) compared to fiscal 2015, with increases in
all product categories.
Global retail comps for the fourth quarter of
fiscal 2016 decreased 7% compared to the fourth quarter of fiscal
2015 with declines in all product categories. Positive comps
in Asia were more than offset by declines in Europe and the
Americas. For fiscal 2016, global retail comps decreased 5%
compared to fiscal 2015, with growth in Asia offset by flat retail
comps in Europe and a decline in the Americas.
During the fourth quarter of fiscal 2016, gross
margin decreased 200 basis points to 51.0%. The decrease in
gross margin was driven by promotional activity in the outlet
channel, a mix towards lower margin product, and the negative
impact of changes in foreign currencies partially offset by margin
improvement initiatives. For fiscal 2016, gross margins
decreased 240 basis points to 51.9%, primarily due to promotional
activity in the outlet channel, changes in foreign currencies, a
higher mix of off-price sales and a mix towards lower margin
product partially offset by margin improvement initiatives.
The Company’s operating expenses were $422.9
million, including $13.3 million of restructuring costs, primarily
related to store closings. Expenses were lower compared to
the fourth quarter of fiscal 2015 driven by lower infrastructure
and store costs, partially offset by restructuring costs, marketing
costs and wearables infrastructure. As a percentage of net
sales, operating expense increased 10 basis points to 44.1% due to
lower sales. For fiscal 2016, operating expenses decreased to
$1,451.0 million due to lower infrastructure and store costs and
the favorable impact of changes in foreign currency, partially
offset by an increase in expenses associated with the Misfit
acquisition and wearables infrastructure. The Company’s
operating expense rate increased 240 basis points to 47.7%,
compared to 45.3% of net sales in fiscal 2015 due to lower
sales.
Operating income for the fourth quarter of
fiscal 2016 decreased to $66.2 million, including the unfavorable
impact of restructuring charges and currency. Operating
margin decreased to 6.9% compared to 9.0% in the prior fiscal
year. Operating income for fiscal 2016 decreased to $127.2
million compared to the prior fiscal year. Operating margin
decreased to 4.2% of net sales for fiscal 2016.
During the fiscal 2016 fourth quarter, interest
expense increased $1.8 million to $7.5 million and other income
decreased $4.4 million to $7.7 million primarily due to lower gains
on foreign currency contracts and account balances compared to the
prior fiscal year. During fiscal 2016, interest expense
increased $6.9 million and other income decreased $26.5 million
related to lower net gains on foreign currency contracts.
The Company’s effective income tax rate in the
fourth quarter of fiscal 2016 was 23.4% compared to 24.2% for the
fourth quarter of fiscal 2015 and 25.1% for fiscal 2016 compared to
26.2% for fiscal 2015.
Sales and Earnings GuidanceThe
Company believes several factors will cause volatility in its
fiscal 2017 GAAP diluted earnings per share, including currency
changes, restructuring charges, higher interest expenses and income
tax benefits that will result primarily from restructuring charges
as well as certain changes in tax accounting standards. In
order to assist investors in understanding the Company's underlying
operational trends, the Company has provided a table at the end of
this release which quantifies the estimated impact on its operating
income margin and its diluted earnings per share of non-operating
currency gains and losses in both fiscal 2016 and 2017, operating
currency headwinds between fiscal 2016 and 2017, restructuring
charges in both fiscal 2016 and 2017 and higher anticipated 2017
interest expenses as well as the fiscal 2016 real estate
gain. In addition, the Company has adjusted the tax rate to
normalize for quarter to quarter fluctuations due to mix in
jurisdictional earnings and / or losses and discrete items
generated from changes in accounting rules.
The Company also estimates that the negative
impact of the relatively stronger U.S. dollar on net sales, based
on prevailing exchange rates, would be about 200 basis points for
the full year of fiscal 2017 and 150 basis points for the first
quarter of fiscal 2017. The effects of these year-over-year
currency impacts are eliminated in the constant currency net sales
guidance set forth below under the heading “Non-GAAP Guidance.”
GAAP GuidanceFor fiscal 2017,
the Company expects the following:
- Net sales to be in the range of a 6.5% decline to flat
- Operating margin in a range of 0.0% to 1.5%
- Diluted earnings (loss) per share in a range of ($0.50) to
$0.20
For the first quarter of fiscal 2017, the Company expects the
following:
- Net sales to decrease in the range of 13.0% to 9.5%
- Operating margin in a range of (8.0%) to (6.0%)
- Diluted earnings (loss) per share in a range of ($1.06) to
($0.92)
Non-GAAP GuidanceThe following
fiscal 2017 adjusted operating margin and adjusted diluted earnings
per share guidance are forward-looking, non-GAAP financial
measures. In addition, the following fiscal 2016 adjusted
operating margin and adjusted diluted earnings per share numbers
are non-GAAP financial measures. The Company believes that
the fiscal 2017 adjusted guidance is useful to investors in
evaluating the Company's projected financial performance without
the impact of non-operating currency gains and losses in both
fiscal 2016 and 2017, operating currency headwinds between fiscal
2016 and 2017, restructuring charges in both fiscal 2016 and 2017
and higher anticipated 2017 interest expenses as well as the fiscal
2016 real estate gain. The Company believes that the fiscal
2016 non-GAAP financial measures are useful to investors in
comparing the Company’s projected financial performance in fiscal
2017 to the Company’s performance in fiscal 2016 without the impact
of these same items. The Company uses the fiscal 2016 and
2017 non-GAAP financial measures to evaluate its operating
performance. The non-GAAP financial measures presented herein
should not be considered a substitute for, or superior to, guidance
or financial measures prepared in accordance with GAAP. See
the table at the end of this release for a reconciliation of
adjusted operating margin and adjusted diluted earnings per share
to the most directly comparable GAAP financial measures.
For fiscal 2017, the Company expects the
following:
- Constant currency net sales in the range between a 4.5% decline
and a 2.0% increase
- Adjusted operating margin in a range of 3.5% to 5.0%, compared
to adjusted operating margin of 4.9% for fiscal 2016
- Adjusted diluted earnings per share in a range of $1.00 to
$1.70, compared to adjusted diluted earnings per share of $1.80 for
fiscal 2016
For the first quarter of fiscal 2017, the
Company expects the following:
- Constant currency net sales to decrease in the range of 11.5%
to 8.0%
- Adjusted operating margin in a range of (2.0%) to 0.0%,
compared to adjusted operating margin of 2.2% for the first quarter
of fiscal 2016
- Adjusted diluted earnings (loss) per share in a range of
($0.25) to ($0.10), compared to adjusted diluted earnings per share
of $0.11 for fiscal 2016
Safe HarborCertain statements
contained herein that are not historical facts, including
multi-year profit improvement estimates, future GAAP and adjusted
financial guidance as well as estimated impacts from foreign
currency translation, amortization expense, foreign tax credits,
Misfit, Inc. acquisition costs, non-cash impairments and
restructuring charges, constitute “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995 and involve a number of risks and uncertainties. The
actual results of the future events described in such
forward-looking statements could differ materially from those
stated in such forward-looking statements. Among the factors
that could cause actual results to differ materially are: changes
in economic trends and financial performance, changes in consumer
demands, tastes and fashion trends, lower levels of consumer
spending resulting from a general economic downturn, shifts in
market demand resulting in inventory risks, changes in foreign
currency exchange rates, risks related to the success of the
multi-year profit improvement initiative, risks related to the
expanded launch of connected accessories and the outcome of current
and possible future litigation, as well as the risks and
uncertainties set forth in the Company’s Annual Report on Form 10-K
for the fiscal year ended January 2, 2016 filed with the Securities
and Exchange Commission (the “SEC”). These forward-looking
statements are based on our current expectations and beliefs
concerning future developments and their potential effect on us.
While management believes that these forward-looking statements are
reasonable as and when made, there can be no assurance that future
developments affecting us will be those that we anticipate.
Readers of this release should consider these factors in
evaluating, and are cautioned not to place undue reliance on, the
forward-looking statements contained herein. The Company
assumes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required by law.
About Fossil
Group, Inc.Fossil Group, Inc. is a global design,
marketing, distribution and innovation company specializing in
lifestyle accessories. Under a diverse portfolio of owned and
licensed brands, our offerings include fashion watches, jewelry,
handbags, small leather goods and wearables. With our newest
owned brand, Misfit, we’re bringing style and technology to the
high-growth connected space. We’re committed to delivering
the best in design and innovation across our owned brands, Fossil,
Michele, Misfit, Relic, Skagen and Zodiac, and licensed brands,
adidas, Armani Exchange, Burberry, Chaps, Diesel, DKNY, Emporio
Armani, Karl Lagerfeld, kate spade new york, Marc Jacobs, Michael
Kors and Tory Burch. We bring each brand story to life
through an extensive wholesale distribution network across
approximately 150 countries and nearly 600 retail locations.
Certain press release and SEC filing information concerning the
Company is also available at www.fossilgroup.com.
Consolidated
Income Statement Data |
For the 13
Weeks Ended |
|
For the 13
Weeks Ended |
|
For the 52
Weeks Ended |
|
For the 52
Weeks Ended |
($ in millions,
except per share data): |
December 31, 2016 |
|
January 2, 2016 |
|
December 31, 2016 |
|
January 2, 2016 |
Net sales |
$ |
959.2 |
|
|
$ |
992.5 |
|
|
$ |
3,042.4 |
|
|
$ |
3,228.8 |
|
Cost of sales |
470.1 |
|
|
467.0 |
|
|
1,464.2 |
|
|
1,475.4 |
|
Gross
profit |
489.1 |
|
|
525.5 |
|
|
1,578.2 |
|
|
1,753.4 |
|
Gross margin |
51.0 |
% |
|
53.0 |
% |
|
51.9 |
% |
|
54.3 |
% |
Operating
expenses: |
|
|
|
|
|
|
|
Selling,
general and administrative expenses |
409.6 |
|
|
433.9 |
|
|
1,423.2 |
|
|
1,437.8 |
|
Restructuring charges |
13.3 |
|
|
2.7 |
|
|
27.8 |
|
|
24.4 |
|
Total operating
expenses |
422.9 |
|
|
436.6 |
|
|
1,451.0 |
|
|
1,462.2 |
|
Total operating
expenses (% of net sales) |
44.1 |
% |
|
44.0 |
% |
|
47.7 |
% |
|
45.3 |
% |
Operating income |
66.2 |
|
|
88.9 |
|
|
127.2 |
|
|
291.2 |
|
Operating margin |
6.9 |
% |
|
9.0 |
% |
|
4.2 |
% |
|
9.0 |
% |
Interest expense |
7.5 |
|
|
5.7 |
|
|
26.9 |
|
|
20.0 |
|
Other income (expense)
- net |
7.7 |
|
|
12.1 |
|
|
14.0 |
|
|
40.5 |
|
Income before income
taxes |
66.3 |
|
|
95.3 |
|
|
114.3 |
|
|
311.7 |
|
Provision for income
taxes |
15.5 |
|
|
23.0 |
|
|
28.7 |
|
|
81.8 |
|
Less: Net
income attributable to noncontrolling interest |
1.1 |
|
|
1.9 |
|
|
6.7 |
|
|
9.3 |
|
Net income attributable
to Fossil Group, Inc. |
$ |
49.7 |
|
|
$ |
70.4 |
|
|
$ |
78.9 |
|
|
$ |
220.6 |
|
Earnings per
Share: |
|
|
|
|
|
|
|
Basic |
$ |
1.03 |
|
|
$ |
1.46 |
|
|
$ |
1.64 |
|
|
$ |
4.52 |
|
Diluted |
$ |
1.03 |
|
|
$ |
1.46 |
|
|
$ |
1.63 |
|
|
$ |
4.51 |
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
Basic |
48.2 |
|
|
48.1 |
|
|
48.1 |
|
|
48.8 |
|
Diluted |
48.4 |
|
|
48.2 |
|
|
48.3 |
|
|
48.9 |
|
Consolidated Balance Sheet Data ($ in
millions): |
December 31, 2016 |
|
January 2, 2016 |
Assets: |
|
|
|
Cash
and cash equivalents |
$ |
297.3 |
|
|
$ |
289.3 |
|
Accounts receivable - net |
375.5 |
|
|
370.8 |
|
Inventories |
542.5 |
|
|
625.3 |
|
Other
current assets |
119.8 |
|
|
157.3 |
|
Total current assets |
$ |
1,335.1 |
|
|
$ |
1,442.7 |
|
Property, plant and equipment - net |
$ |
273.8 |
|
|
$ |
326.4 |
|
Goodwill |
355.3 |
|
|
359.4 |
|
Intangible and other assets - net |
210.5 |
|
|
227.2 |
|
Total long-term assets |
$ |
839.6 |
|
|
$ |
913.0 |
|
Total assets |
$ |
2,174.7 |
|
|
$ |
2,355.7 |
|
|
|
|
|
Liabilities and stockholders’ equity: |
|
|
|
Accounts payable, accrued expenses and other current
liabilities |
$ |
376.0 |
|
|
$ |
466.3 |
|
Short-term debt |
26.4 |
|
|
23.2 |
|
Total current liabilities |
$ |
402.4 |
|
|
$ |
489.5 |
|
Long-term debt |
$ |
610.0 |
|
|
$ |
785.1 |
|
Other
long-term liabilities |
146.9 |
|
|
148.5 |
|
Total long-term liabilities |
$ |
756.9 |
|
|
$ |
933.6 |
|
Stockholders’ equity |
$ |
1,015.4 |
|
|
$ |
932.6 |
|
Total liabilities and stockholders’ equity |
$ |
2,174.7 |
|
|
$ |
2,355.7 |
|
|
For the 13
Weeks Ended |
|
For the 52
Weeks Ended |
Business
Segment Net Sales ($ in millions): |
December 31, 2016 |
|
January 2, 2016 |
|
December 31, 2016 |
|
January 2, 2016 |
Segment: |
|
|
|
|
|
|
|
Americas |
$ |
482.7 |
|
|
$ |
518.0 |
|
|
$ |
1,524.9 |
|
|
$ |
1,661.9 |
|
Europe |
333.0 |
|
|
347.4 |
|
|
1,002.1 |
|
|
1,069.8 |
|
Asia |
143.5 |
|
|
127.1 |
|
|
515.4 |
|
|
497.1 |
|
Total
net sales |
$ |
959.2 |
|
|
$ |
992.5 |
|
|
$ |
3,042.4 |
|
|
$ |
3,228.8 |
|
Product Category Information
|
For the 13
Weeks Ended |
|
For the 52
Weeks Ended |
Product Sales ($ in millions): |
December 31,
2016 |
|
January 2,
2016 |
|
December 31,
2016 |
|
January 2,
2016 |
Watches |
$ |
749.0 |
|
|
$ |
767.1 |
|
|
$ |
2,330.3 |
|
|
$ |
2,475.8 |
|
Leathers |
114.8 |
|
|
122.3 |
|
|
393.8 |
|
|
409.4 |
|
Jewelry |
79.7 |
|
|
86.4 |
|
|
251.4 |
|
|
272.1 |
|
Other |
15.7 |
|
|
16.7 |
|
|
66.9 |
|
|
71.5 |
|
Total net sales |
$ |
959.2 |
|
|
$ |
992.5 |
|
|
$ |
3,042.4 |
|
|
$ |
3,228.8 |
|
Store Count Information
|
|
December 31, 2016 |
|
January 2, 2016 |
|
|
Americas |
|
Europe |
|
Asia |
|
Total |
|
Americas |
|
Europe |
|
Asia |
|
Total |
Full price |
|
122 |
|
119 |
|
63 |
|
304 |
|
128 |
|
126 |
|
68 |
|
322 |
Outlets |
|
143 |
|
73 |
|
45 |
|
261 |
|
153 |
|
71 |
|
46 |
|
270 |
Full priced
multi-brand |
|
0 |
|
8 |
|
12 |
|
20 |
|
0 |
|
7 |
|
20 |
|
27 |
Total stores |
|
265 |
|
200 |
|
120 |
|
585 |
|
281 |
|
204 |
|
134 |
|
619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Financial
InformationThe following table presents the Company’s
business segment and product net sales on a constant currency basis
which are non-GAAP financial measures. To calculate net sales
on a constant currency basis, net sales for the current fiscal year
period for entities reporting in currencies other than the U.S.
dollar are translated into U.S. dollars at the average rates during
the comparable period of the prior fiscal year. The Company
presents constant currency information to provide investors with a
basis to evaluate how its underlying business performed excluding
the effects of foreign currency exchange rate fluctuations.
The constant currency financial information presented herein should
not be considered a substitute for, or superior to, the measures of
financial performance prepared in accordance with GAAP.
|
Net Sales |
|
Net Sales |
For the 13 Weeks Ended |
|
For the 52 Weeks Ended |
December 31, 2016 |
|
December 31, 2016 |
($ in millions) |
As Reported |
|
Impact of Foreign Currency Exchange
Rates |
|
Constant Currency |
|
As Reported |
|
Impact of Foreign Currency Exchange
Rates |
|
Constant Currency |
Segment: |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
482.7 |
|
|
$ |
(3.5 |
) |
|
$ |
486.2 |
|
|
$ |
1,524.9 |
|
|
$ |
(13.1 |
) |
|
$ |
1,538.0 |
|
Europe |
333.0 |
|
|
(16.5 |
) |
|
349.5 |
|
|
1,002.1 |
|
|
(30.6 |
) |
|
1,032.7 |
|
Asia |
143.5 |
|
|
1.7 |
|
|
141.8 |
|
|
515.4 |
|
|
(1.7 |
) |
|
517.1 |
|
Total net sales |
$ |
959.2 |
|
|
$ |
(18.3 |
) |
|
$ |
977.5 |
|
|
$ |
3,042.4 |
|
|
$ |
(45.4 |
) |
|
$ |
3,087.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
Categories: |
|
|
|
|
|
|
|
|
|
|
|
Watches |
$ |
749.0 |
|
|
$ |
(14.3 |
) |
|
$ |
763.3 |
|
|
$ |
2,330.3 |
|
|
$ |
(35.1 |
) |
|
$ |
2,365.4 |
|
Leathers |
114.8 |
|
|
(1.4 |
) |
|
116.2 |
|
|
393.8 |
|
|
(5.2 |
) |
|
399.0 |
|
Jewelry |
79.7 |
|
|
(2.5 |
) |
|
82.2 |
|
|
251.4 |
|
|
(4.6 |
) |
|
256.0 |
|
Other |
15.7 |
|
|
(0.1 |
) |
|
15.8 |
|
|
66.9 |
|
|
(0.5 |
) |
|
67.4 |
|
Total net sales |
$ |
959.2 |
|
|
$ |
(18.3 |
) |
|
$ |
977.5 |
|
|
$ |
3,042.4 |
|
|
$ |
(45.4 |
) |
|
$ |
3,087.8 |
|
Reconciliation of Non-GAAP Financial
MeasuresThe following table reconciles fiscal 2016 and
2017 adjusted operating margin and adjusted diluted earnings per
share to the most directly comparable GAAP financial
measures. Numbers may not foot due to rounding.
Fiscal
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
2017 Guidance |
|
2016 |
|
High |
|
Low |
|
|
Op Margin |
|
Diluted EPS |
|
Op Margin |
|
Diluted EPS |
|
Op Margin |
|
Diluted EPS |
GAAP |
1.5 |
% |
|
$ |
0.20 |
|
|
— |
% |
|
$ |
(0.50 |
) |
|
4.2 |
% |
|
$ |
1.63 |
|
Restructuring
Charges |
2.5 |
|
|
|
1.01 |
|
|
2.6 |
|
|
|
1.01 |
|
|
0.9 |
|
|
|
0.37 |
|
Fiscal 2016 Real Estate
Gain |
|
|
|
|
|
|
|
|
(0.2 |
) |
|
|
(0.09 |
) |
Currency Impact |
0.9 |
|
|
|
0.22 |
|
|
0.8 |
|
|
|
0.21 |
|
|
— |
|
|
|
(0.11 |
) |
Interest Expense |
|
|
|
0.28 |
|
|
|
|
|
0.28 |
|
|
|
|
|
— |
|
Adjusted
(Non-GAAP) |
5.0 |
% |
|
$ |
1.70 |
|
|
3.5 |
% |
|
$ |
1.00 |
|
|
4.9 |
% |
|
$ |
1.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter Fiscal 2017 |
|
|
|
|
|
|
|
|
|
|
|
2017 Guidance |
|
2016 |
|
High |
|
Low |
|
|
Op Margin |
|
Diluted EPS |
|
Op Margin |
|
Diluted EPS |
|
Op Margin |
|
Diluted EPS |
GAAP |
(6.0 |
)% |
|
$ |
(0.92 |
) |
|
(8.0 |
)% |
|
$ |
(1.06 |
) |
|
2.2 |
% |
|
$ |
0.12 |
|
Restructuring
Charges |
5.1 |
|
|
|
0.41 |
|
|
5.3 |
|
|
|
0.41 |
|
|
— |
|
|
|
— |
|
Currency Impact |
0.8 |
|
|
|
0.03 |
|
|
0.8 |
|
|
|
0.03 |
|
|
— |
|
|
|
(0.01 |
) |
Interest Expense |
|
|
|
0.02 |
|
|
|
|
|
0.02 |
|
|
|
|
|
— |
|
Tax |
|
|
|
0.35 |
|
|
|
|
|
0.35 |
|
|
|
|
|
— |
|
Adjusted
(Non-GAAP) |
0.0 |
% |
|
$ |
(0.10 |
) |
|
(2.0 |
)% |
|
$ |
(0.25 |
) |
|
2.2 |
% |
|
$ |
0.11 |
|
Investor Relations:
Eric M. Cerny
FOSSIL GROUP, Inc.
(855) 336-7745
Allison Malkin
ICR, Inc.
(203) 682-8225
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