Fossil Group, Inc. (NASDAQ: FOSL) today announced financial results
for the second quarter ended July 2, 2022.
Second Quarter Summary
- Second quarter worldwide net sales
decreased to $371 million, down 10% on a reported basis and 5% in
constant currency, reflecting declines across all three
regions.
- FOSSIL brand sales increased 7% in
constant currency with double digit growth in traditional watches,
jewelry and leathers partially offset by declines in
smartwatches.
- Direct to consumer net sales
increased 5% in constant currency, led by 26% growth in store sales
largely offset by decreased e-commerce sales.
- Operating loss of $11 million
compared to operating income of $14 million a year ago. Adjusted
operating loss of $8 million compared to adjusted operating income
of $21 million last year.
- As of July 2, 2022, cash and cash
equivalents of $167 million.
“During the second quarter, global operating
conditions remained challenging,” said Kosta Kartsotis, Chairman
and CEO. “We saw softening consumer demand during the quarter,
reflecting ongoing inflationary pressure and continued
pandemic-related restrictions in China. Additionally, the slowdown
in consumer purchasing led to fewer inventory replenishment orders
from our wholesale partners. While this macro backdrop impacted our
core traditional watch category, our jewelry and leathers
businesses grew at double digit rates in the quarter.”
“We believe consumer sentiment will continue to
be pressured in the second half of the year and have adjusted our
full year outlook to reflect moderating demand globally. Our teams
are remaining agile while focusing on our core initiatives in
digital and brand heat, and we are confident that our strategies
will maximize shareholder value over the long term.”
Second Quarter 2022 Operating
Results
Amounts referred to as “adjusted” as well as
“constant currency” are non-GAAP financial measures.
Reconciliations of these non-GAAP financial measures to their
closest reported GAAP measures are included at the end of this
press release.
- Net sales totaled
$371.2 million, a decrease of 10% on a reported basis and 5% in
constant currency compared to $410.9 million in the second quarter
of fiscal 2021. Net sales, in constant currency,
decreased 6% in Asia, 4% in the Americas and 3% in Europe versus
the same quarter last year. Traditional watch sales declined 7% in
constant currency in the second quarter while smartwatch sales
decreased 18%, largely driven by the Americas as compared to the
prior year period. The leathers and jewelry categories each grew
12% in constant currency during the second quarter. FOSSIL branded
sales increased 7% in constant currency with growth in Asia and the
Americas partially offset by a decrease in Europe. Direct to
consumer net sales increased 5% in constant currency, led by 26%
growth in store sales largely offset by decreased e-commerce sales.
Total digital sales were down 21% in constant currency versus the
prior year period and reflected 35% of our sales mix compared to
41% in the prior year period. Lower digital sales were primarily
due to traffic shifts from owned e-commerce to brick and mortar
distribution in Europe and the Americas and COVID driven lockdowns
in mainland China.
- Gross profit
totaled $191.3 million compared to $221.8 million in the second
quarter of 2021. Gross margin decreased 240 basis points to 51.6%
versus 54.0% a year ago. The year-over-year decrease primarily
reflects a non-recurrence of the prior year's tariff reductions,
increased freight costs and an unfavorable currency impact. These
costs were partially offset by favorable product mix and pricing
increases and net foreign currency hedging contract gains in the
current year as compared to net foreign currency hedging contract
losses last year.
- Operating expenses
totaled $202.3 million compared to $207.5 million a year
ago. As a percentage of net sales, operating expenses
were 54.5% in the second quarter of 2022 compared to 50.5% in the
prior year second quarter. Selling, general and administrative
(“SG&A”) expenses were $199.2 million compared to $200.5
million in the second quarter of 2021. As a percentage of net
sales, SG&A expenses were 53.7% in the second quarter of 2022
compared to 48.8% in the prior year second quarter, largely driven
by increased compensation costs and investments in our digital
initiatives, which were partially offset by a decline in marketing
expenses and reduced store costs resulting from lower store
count.
- Operating income
(loss) was a loss of $10.9 million compared to income of
$14.3 million in the second quarter of 2021. Operating
margin was (2.9)% in the second quarter of 2022 compared to 3.5% in
the prior year second quarter. Adjusted operating loss totaled $7.8
million compared to adjusted operating income of $21.3 million in
the second quarter of 2021. Adjusted operating margin was (2.1)% in
the second quarter of 2022 compared to 5.2% in the prior year
second quarter.
- Interest expense
decreased to $4.3 million compared to $6.5 million in the second
quarter of 2021, primarily driven by reduced debt issuance costs
amortization and a lower borrowing rate.
- Other income
(expense) was expense of $1.7 million compared to expense
of $0.5 million in the second quarter of 2021.
- Income (loss) before income
taxes was $(16.9) million compared to $7.3 million in the
second quarter of 2021.
- Adjusted EBITDA
was $(0.03) million, or (0.1)% of net sales in the second quarter
of 2022 and $30.3 million, or 7.4% in the prior year quarter.
- Net income (loss)
totaled $(19.1) million with net loss per diluted share of $0.37,
which compares to $(1.2) million and net loss per diluted share of
$0.02 in the prior year quarter. Adjusted net loss for the second
quarter was $(16.6) million with adjusted loss per diluted share of
$0.33 compared to adjusted net income of $4.3 million with adjusted
income per diluted share of $0.08 in the prior year
quarter. During the second quarter of 2022, currencies
unfavorably affected loss per diluted share by approximately
$0.04.
Balance Sheet Summary
As of July 2, 2022, the Company had cash and
cash equivalents of $167 million. Inventories at the end of the
second quarter of 2022 totaled $438 million, an increase of 24%
versus a year ago. Total debt was $249 million.
Outlook
The Company is updating its guidance for full
year 2022 to reflect a more cautious outlook on global markets,
including a slowdown in consumer spending in our categories, the
likelihood of ongoing COVID-19 related restrictions in mainland
China, and the estimated impact of prevailing foreign currency
translation.
For fiscal year 2022, the Company now expects
worldwide net sales declines of approximately 8% to 4% versus prior
guidance of net sales growth of flat to 3%. This
updated guidance includes an estimated foreign currency negative
impact of 450 basis points, which compares to our prior estimate of
350 basis points for the full year.
The Company is reducing adjusted operating
margin(1) guidance for the full year and now expects adjusted
operating margin of 2% to 4% compared to prior guidance of 5.5% to
6.5%.
(1) A reconciliation of adjusted operating
margin, a non-GAAP financial measure, to a corresponding GAAP
measure is not available on a forward-looking basis without
unreasonable efforts due to the high variability and low visibility
of certain income and expense items that are excluded in
calculating adjusted operating margin.
Safe Harbor
Certain statements contained herein that are not
historical facts, 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:
increased political uncertainty and the Ukraine crisis; the effect
of worldwide economic conditions; the effect of the COVID-19
pandemic; the impact of inflation; results of tax examinations;
significant changes in consumer spending patterns or preferences;
interruptions or delays in the supply of key components or
products; acts of war or acts of terrorism; loss of key facilities;
data breach or information systems disruptions; changes in foreign
currency valuations in relation to the U.S. dollar; lower levels of
consumer spending resulting from a general economic downturn or
generally reduced shopping activity caused by public safety or
consumer confidence concerns; the performance of our products
within the prevailing retail environment; customer acceptance of
both new designs and newly-introduced product lines; changes in the
mix of product sales; the effects of vigorous competition in the
markets in which we operate; compliance with debt covenants and
other contractual provisions and meeting debt service obligations;
risks related to the success of our business strategy; the
termination or non-renewal of material licenses; risks related to
foreign operations and manufacturing; changes in the costs of
materials and labor; government regulation and tariffs; our ability
to secure and protect trademarks and other intellectual property
rights; levels of traffic to and management of our retail stores;
loss of key personnel and the outcome of current and possible
future litigation, as well as the risks and uncertainties set forth
in the Company’s most recent Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q 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 traditional
watches, smartwatches, jewelry, handbags, small leather goods,
belts and sunglasses. We are committed to delivering
the best in design and innovation across our owned brands, Fossil,
Michele, Relic, Skagen and Zodiac, and licensed brands, Armani
Exchange, Diesel, DKNY, Emporio Armani, kate spade new york,
Michael Kors, PUMA and Tory Burch. We bring each brand
story to life through an extensive distribution network across
numerous geographies, categories and channels. Certain
press release and SEC filing information concerning the Company is
also available at www.fossilgroup.com.
|
Investor Relations: |
Christine Greany |
| |
The Blueshirt Group |
| |
(858) 722-7815 |
| |
christine@blueshirtgroup.com |
| |
|
| Consolidated Income
Statement Data |
For the 13
Weeks Ended |
|
For the 13
Weeks Ended |
|
For the 26
Weeks Ended |
|
For the 26
Weeks Ended |
| ($ in millions, except
per share data): |
July 2, 2022 |
|
July 3, 2021 |
|
July 2, 2022 |
|
July 3, 2021 |
|
Net sales |
$ |
371.2 |
|
|
$ |
410.9 |
|
|
$ |
747.0 |
|
|
$ |
774.0 |
|
| Cost of sales |
|
179.9 |
|
|
|
189.1 |
|
|
|
371.3 |
|
|
|
369.6 |
|
|
Gross profit |
|
191.3 |
|
|
|
221.8 |
|
|
|
375.7 |
|
|
|
404.4 |
|
| Gross margin |
|
51.6 |
% |
|
|
54.0 |
% |
|
|
50.3 |
% |
|
|
52.2 |
% |
| Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
199.1 |
|
|
|
200.5 |
|
|
|
395.0 |
|
|
|
387.8 |
|
|
Other long-lived asset impairments |
|
0.2 |
|
|
|
1.3 |
|
|
|
0.5 |
|
|
|
5.7 |
|
|
Restructuring charges |
|
2.9 |
|
|
|
5.7 |
|
|
|
5.4 |
|
|
|
13.3 |
|
| Total operating expenses |
$ |
202.2 |
|
|
$ |
207.5 |
|
|
$ |
400.9 |
|
|
$ |
406.8 |
|
| Total operating expenses (% of
net sales) |
|
54.5 |
% |
|
|
50.5 |
% |
|
|
53.7 |
% |
|
|
52.6 |
% |
| Operating income (loss) |
|
(10.9 |
) |
|
|
14.3 |
|
|
|
(25.2 |
) |
|
|
(2.4 |
) |
| Operating margin |
|
(2.9 |
)% |
|
|
3.5 |
% |
|
|
(3.4 |
)% |
|
|
(0.3 |
)% |
| Interest expense |
|
4.3 |
|
|
|
6.5 |
|
|
|
8.3 |
|
|
|
13.9 |
|
| Other income (expense) -
net |
|
(1.7 |
) |
|
|
(0.5 |
) |
|
|
(0.1 |
) |
|
|
1.4 |
|
| Income (loss) before income
taxes |
|
(16.9 |
) |
|
|
7.3 |
|
|
|
(33.6 |
) |
|
|
(14.9 |
) |
| Provision for income
taxes |
|
2.0 |
|
|
|
8.1 |
|
|
|
6.7 |
|
|
|
10.2 |
|
|
Less: Net income attributable to noncontrolling interest |
|
0.2 |
|
|
|
0.4 |
|
|
|
0.3 |
|
|
|
0.5 |
|
| Net income (loss) attributable
to Fossil Group, Inc. |
$ |
(19.1 |
) |
|
$ |
(1.2 |
) |
|
$ |
(40.6 |
) |
|
$ |
(25.6 |
) |
| Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
(0.37 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.78 |
) |
|
$ |
(0.50 |
) |
|
Diluted |
$ |
(0.37 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.78 |
) |
|
$ |
(0.50 |
) |
| Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
51.7 |
|
|
|
52.0 |
|
|
|
51.9 |
|
|
|
51.8 |
|
|
Diluted |
|
51.7 |
|
|
|
52.0 |
|
|
|
51.9 |
|
|
|
51.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet Data ($ in
millions): |
July 2, 2022 |
|
July 3, 2021 |
|
Assets: |
|
|
|
|
Cash and cash equivalents |
$ |
167.1 |
|
|
$ |
252.3 |
|
|
Accounts receivable - net |
|
176.5 |
|
|
|
187.6 |
|
|
Inventories |
|
437.9 |
|
|
|
352.0 |
|
|
Other current assets |
|
183.3 |
|
|
|
157.3 |
|
|
Total current assets |
$ |
964.8 |
|
|
$ |
949.2 |
|
|
Property, plant and equipment - net |
$ |
80.6 |
|
|
$ |
97.6 |
|
|
Operating lease right-of-use assets |
|
168.6 |
|
|
|
199.5 |
|
|
Intangible and other assets - net |
|
69.4 |
|
|
|
91.1 |
|
|
Total long-term assets |
$ |
318.6 |
|
|
$ |
388.2 |
|
|
Total assets |
$ |
1,283.4 |
|
|
$ |
1,337.4 |
|
| |
|
|
|
|
Liabilities and stockholders’ equity: |
|
|
|
|
Accounts payable, accrued expenses and other current
liabilities |
$ |
420.7 |
|
|
$ |
483.4 |
|
|
Short-term debt |
|
0.6 |
|
|
|
38.4 |
|
|
Total current liabilities |
$ |
421.3 |
|
|
$ |
521.8 |
|
|
Long-term debt |
$ |
248.9 |
|
|
$ |
139.7 |
|
|
Long-term operating lease liabilities |
|
163.9 |
|
|
|
203.0 |
|
|
Other long-term liabilities |
|
55.3 |
|
|
|
63.6 |
|
|
Total long-term liabilities |
$ |
468.1 |
|
|
$ |
406.3 |
|
|
Stockholders’ equity |
|
394.0 |
|
|
$ |
409.3 |
|
|
Total liabilities and stockholders’ equity |
$ |
1,283.4 |
|
|
$ |
1,337.4 |
|
|
|
|
|
|
|
|
|
|
Constant Currency Financial
Information
The 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 SalesFor the 13 Weeks
Ended |
|
Net SalesFor the 26 Weeks
Ended |
|
July 2, 2022 |
|
July 3, 2021 |
|
July 2, 2022 |
|
July 3, 2021 |
|
($ in millions) |
As Reported |
|
Impact of Foreign Currency Exchange Rates |
|
Constant Currency |
|
As Reported |
|
As Reported |
|
Impact of Foreign Currency Exchange Rates |
|
Constant Currency |
|
As Reported |
| Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
168.3 |
|
$ |
0.8 |
|
$ |
169.1 |
|
$ |
176.7 |
|
$ |
330.2 |
|
$ |
1.0 |
|
$ |
331.2 |
|
$ |
329.2 |
| Europe |
|
107.9 |
|
|
12.5 |
|
|
120.4 |
|
|
124.4 |
|
|
232.4 |
|
|
19.2 |
|
|
251.6 |
|
|
233.7 |
| Asia |
|
92.6 |
|
|
4.3 |
|
|
96.9 |
|
|
103.5 |
|
|
179.4 |
|
|
5.9 |
|
|
185.3 |
|
|
202.1 |
| Corporate |
|
2.4 |
|
|
0.1 |
|
|
2.5 |
|
|
6.3 |
|
|
5.0 |
|
|
0.1 |
|
|
5.1 |
|
|
9.0 |
| Total net sales |
$ |
371.2 |
|
$ |
17.7 |
|
$ |
388.9 |
|
$ |
410.9 |
|
$ |
747.0 |
|
$ |
26.2 |
|
$ |
773.2 |
|
$ |
774.0 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Product Categories: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Watches: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Traditional watches |
$ |
258.7 |
|
$ |
11.4 |
|
$ |
270.1 |
|
$ |
290.6 |
|
$ |
520.1 |
|
$ |
16.6 |
|
$ |
536.7 |
|
$ |
533.0 |
|
Smartwatches |
|
33.4 |
|
|
2.0 |
|
|
35.4 |
|
|
43.1 |
|
|
71.4 |
|
|
3.1 |
|
|
74.5 |
|
|
96.0 |
| Total watches |
$ |
292.1 |
|
$ |
13.4 |
|
$ |
305.5 |
|
$ |
333.7 |
|
$ |
591.5 |
|
$ |
19.7 |
|
$ |
611.2 |
|
$ |
629.0 |
| Leathers |
|
35.9 |
|
|
1.3 |
|
|
37.2 |
|
|
33.3 |
|
|
70.1 |
|
|
2.0 |
|
|
72.1 |
|
|
67.5 |
| Jewelry |
|
33.9 |
|
|
2.6 |
|
|
36.5 |
|
|
32.6 |
|
|
68.6 |
|
|
3.8 |
|
|
72.4 |
|
|
58.7 |
| Other |
|
9.3 |
|
|
0.4 |
|
|
9.7 |
|
|
11.3 |
|
|
16.8 |
|
|
0.7 |
|
|
17.5 |
|
|
18.8 |
| Total net sales |
$ |
371.2 |
|
$ |
17.7 |
|
$ |
388.9 |
|
$ |
410.9 |
|
$ |
747.0 |
|
$ |
26.2 |
|
$ |
773.2 |
|
$ |
774.0 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA, Adjusted operating
income (loss), Adjusted net income (loss) and Adjusted earnings
(loss) per share
Adjusted EBITDA, Adjusted operating income
(loss), Adjusted net income (loss) and Adjusted earnings (loss) per
share are non-GAAP financial measures. We define
Adjusted EBITDA as our net income (loss) before the impact of
income tax expense (benefit), plus interest expense, amortization
and depreciation, impairment expense, other non-cash charges,
stock-based compensation expense, restructuring expense and
unamortized debt issuance costs included in loss on extinguishment
of debt minus interest income. We define Adjusted operating income
(loss) as operating income (loss) before impairment expense and
restructuring expense. We define Adjusted net income (loss) and
Adjusted earnings (loss) per share as net income (loss)
attributable to Fossil Group, Inc. and diluted earnings (loss) per
share, respectively, before impairment expense, restructuring
expense and unamortized debt issuance costs included in loss on
extinguishment of debt. We have included Adjusted EBITDA, Adjusted
operating income (loss), Adjusted net income (loss) and Adjusted
earnings (loss) per share herein because they are widely used by
investors for valuation and for comparing our financial performance
with the performance of our competitors. We also use both non-GAAP
financial measures to monitor and compare the financial performance
of our operations. Our presentation of Adjusted EBITDA,
Adjusted operating income (loss), Adjusted net income (loss) and
Adjusted earnings (loss) per share may not be comparable to
similarly titled measures other companies report.
Adjusted EBITDA, Adjusted operating income (loss), Adjusted net
income (loss) and Adjusted earnings (loss) per share are not
intended to be used as alternatives to any measure of our
performance in accordance with GAAP.
The following tables reconcile Adjusted EBITDA
to the most directly comparable GAAP financial measure, which is
income (loss) before income taxes. Certain line items
presented in the tables below, when aggregated, may not foot due to
rounding.
| |
Fiscal 2021(1) |
|
Fiscal 2022 |
|
|
| ($ in
millions): |
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Total |
|
Income (loss) before income taxes |
$ |
40.9 |
|
|
$ |
27.1 |
|
|
$ |
(16.7 |
) |
|
$ |
(16.9 |
) |
|
$ |
34.4 |
|
|
Plus: |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
6.4 |
|
|
|
4.8 |
|
|
|
4.0 |
|
|
|
4.3 |
|
|
|
19.5 |
|
|
Amortization and depreciation |
|
7.0 |
|
|
|
6.2 |
|
|
|
6.2 |
|
|
|
5.8 |
|
|
|
25.2 |
|
|
Impairment expense |
|
0.6 |
|
|
|
2.9 |
|
|
|
0.3 |
|
|
|
0.2 |
|
|
|
4.0 |
|
|
Other non-cash charges |
|
1.1 |
|
|
|
(0.6 |
) |
|
|
(0.2 |
) |
|
|
(0.2 |
) |
|
|
0.1 |
|
|
Stock-based compensation |
|
2.9 |
|
|
|
2.4 |
|
|
|
2.2 |
|
|
|
3.8 |
|
|
|
11.3 |
|
|
Restructuring expense |
|
5.4 |
|
|
|
3.2 |
|
|
|
2.6 |
|
|
|
2.9 |
|
|
|
14.1 |
|
|
Unamortized debt issuance costs included in loss on extinguishment
of debt |
|
— |
|
|
|
11.7 |
|
|
|
— |
|
|
|
— |
|
|
|
11.7 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
0.1 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.5 |
|
| Adjusted EBITDA |
$ |
64.2 |
|
|
$ |
57.6 |
|
|
$ |
(1.7 |
) |
|
$ |
(0.3 |
) |
|
$ |
119.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Prior period amounts have been adjusted to conform to
the current period presentation.
| |
Fiscal 2020(1) |
|
Fiscal 2021 |
|
|
| ($ in
millions): |
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Total |
|
Income (loss) before income taxes |
$ |
9.5 |
|
|
$ |
11.5 |
|
|
$ |
(22.2 |
) |
|
$ |
7.3 |
|
|
$ |
6.1 |
|
|
Plus: |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
8.0 |
|
|
|
8.4 |
|
|
|
7.3 |
|
|
|
6.5 |
|
|
|
30.2 |
|
|
Amortization and depreciation |
|
10.3 |
|
|
|
10.0 |
|
|
|
8.9 |
|
|
|
7.5 |
|
|
|
36.7 |
|
|
Impairment expense |
|
4.6 |
|
|
|
6.5 |
|
|
|
4.5 |
|
|
|
1.3 |
|
|
|
16.9 |
|
|
Other non-cash charges |
|
2.0 |
|
|
|
1.0 |
|
|
|
(0.2 |
) |
|
|
(0.4 |
) |
|
|
2.5 |
|
|
Stock-based compensation |
|
3.2 |
|
|
|
1.9 |
|
|
|
1.8 |
|
|
|
2.5 |
|
|
|
9.4 |
|
|
Restructuring expense |
|
5.7 |
|
|
|
10.9 |
|
|
|
7.5 |
|
|
|
5.7 |
|
|
|
29.8 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Interest income |
|
0.1 |
|
|
|
0.2 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.5 |
|
| Adjusted EBITDA |
$ |
43.3 |
|
|
$ |
50.0 |
|
|
$ |
7.5 |
|
|
$ |
30.3 |
|
|
$ |
131.1 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Prior period amounts have been adjusted to conform to the
current period presentation.
The following tables reconcile Adjusted
operating income (loss), Adjusted net income (loss) and Adjusted
earnings (loss) per share to the most directly comparable GAAP
financial measures, which are operating income (loss), net income
(loss) attributable to Fossil Group, Inc. and diluted earnings
(loss) per share, respectively. Certain line items presented in the
table below, when aggregated, may not foot due to rounding.
| |
For the 13 Weeks Ended July 2, 2022 |
| ($ in millions, except
per share data): |
As Reported |
Other Long-Lived Asset Impairment |
Restructuring Expenses |
As Adjusted |
|
Operating income (loss) |
$ |
(10.9 |
) |
$ |
0.2 |
|
$ |
2.9 |
|
$ |
(7.8 |
) |
|
Operating margin (% of net sales) |
|
(2.9 |
)% |
|
|
|
(2.1 |
)% |
|
Interest expense |
|
(4.3 |
) |
|
— |
|
|
— |
|
|
(4.3 |
) |
|
Other income (expense) - net |
|
(1.7 |
) |
|
— |
|
|
— |
|
|
(1.7 |
) |
|
Income (loss) before income taxes |
|
(16.9 |
) |
|
0.2 |
|
|
2.9 |
|
|
(13.8 |
) |
|
Provision for income taxes |
|
2.0 |
|
|
— |
|
|
0.6 |
|
|
2.6 |
|
|
Less: Net income attributable to noncontrolling interest |
|
(0.2 |
) |
|
— |
|
|
— |
|
|
(0.2 |
) |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(19.1 |
) |
$ |
0.2 |
|
$ |
2.3 |
|
$ |
(16.6 |
) |
| Diluted earnings (loss) per
share |
$ |
(0.37 |
) |
$ |
— |
|
$ |
0.04 |
|
$ |
(0.33 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
For the 13 Weeks Ended July 3, 2021 |
| ($ in millions, except
per share data): |
As Reported |
Other Long-Lived Asset Impairment |
Restructuring Expenses |
As Adjusted |
|
Operating income (loss) |
$ |
14.3 |
|
$ |
1.3 |
|
$ |
5.7 |
|
$ |
21.3 |
|
|
Operating margin (% of net sales) |
|
3.5 |
% |
|
|
|
5.2 |
% |
|
Interest expense |
|
(6.5 |
) |
|
— |
|
|
— |
|
|
(6.5 |
) |
|
Other income (expense) - net |
|
(0.5 |
) |
|
— |
|
|
— |
|
|
(0.5 |
) |
|
Income (loss) before income taxes |
|
7.3 |
|
|
1.3 |
|
|
5.7 |
|
|
14.3 |
|
|
Provision for income taxes |
|
8.1 |
|
|
0.3 |
|
|
1.2 |
|
|
9.6 |
|
|
Less: Net income attributable to noncontrolling interest |
|
(0.4 |
) |
|
— |
|
|
— |
|
|
(0.4 |
) |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(1.2 |
) |
$ |
1.0 |
|
$ |
4.5 |
|
$ |
4.3 |
|
| Diluted earnings (loss) per
share |
$ |
(0.02 |
) |
$ |
0.02 |
|
$ |
0.09 |
|
$ |
0.08 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
For the 26 Weeks Ended July 2, 2022 |
| ($ in millions, except
per share data): |
As Reported |
Other Long-Lived Asset Impairment |
Restructuring Expenses |
As Adjusted |
|
Operating income (loss) |
$ |
(25.2 |
) |
$ |
0.5 |
|
$ |
5.4 |
|
$ |
(19.3 |
) |
|
Operating margin (% of net sales) |
|
(3.4 |
)% |
|
|
|
(2.6 |
)% |
|
Interest expense |
|
(8.3 |
) |
|
— |
|
|
— |
|
|
(8.3 |
) |
|
Other income (expense) - net |
|
(0.1 |
) |
|
— |
|
|
— |
|
|
(0.1 |
) |
|
Income (loss) before income taxes |
|
(33.6 |
) |
|
0.5 |
|
|
5.4 |
|
|
(27.7 |
) |
|
Provision for income taxes |
|
6.7 |
|
|
0.1 |
|
|
1.1 |
|
|
7.9 |
|
|
Less: Net income attributable to noncontrolling interest |
|
(0.3 |
) |
|
— |
|
|
— |
|
|
(0.3 |
) |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(40.6 |
) |
$ |
0.4 |
|
$ |
4.3 |
|
$ |
(35.9 |
) |
| Diluted earnings (loss) per
share |
$ |
(0.78 |
) |
$ |
0.01 |
|
$ |
0.08 |
|
$ |
(0.69 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
For the 26 Weeks Ended July 3, 2021 |
| ($ in millions, except
per share data): |
As Reported |
Other Long-Lived Asset Impairment |
Restructuring Expenses |
As Adjusted |
|
Operating income (loss) |
$ |
(2.4 |
) |
$ |
5.7 |
|
$ |
13.3 |
|
$ |
16.6 |
|
|
Operating margin (% of net sales) |
|
(0.3 |
)% |
|
|
|
2.1 |
% |
|
Interest expense |
|
(13.9 |
) |
|
— |
|
|
— |
|
|
(13.9 |
) |
|
Other income (expense) - net |
|
1.4 |
|
|
— |
|
|
— |
|
|
1.4 |
|
|
Income (loss) before income taxes |
|
(14.9 |
) |
|
5.7 |
|
|
13.3 |
|
|
4.1 |
|
|
Provision for income taxes |
|
10.2 |
|
|
1.2 |
|
|
2.8 |
|
|
14.2 |
|
|
Less: Net income attributable to noncontrolling interest |
|
(0.5 |
) |
|
— |
|
|
— |
|
|
(0.5 |
) |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(25.6 |
) |
$ |
4.5 |
|
$ |
10.5 |
|
$ |
(10.6 |
) |
| Diluted earnings (loss) per
share |
$ |
(0.50 |
) |
$ |
0.09 |
|
$ |
0.20 |
|
$ |
(0.21 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Store Count Information
|
|
July 3, 2021 |
|
Opened |
|
Closed |
|
July 2, 2022 |
|
Americas |
166 |
|
|
0 |
|
|
9 |
|
|
157 |
|
| Europe |
133 |
|
|
1 |
|
|
21 |
|
|
113 |
|
| Asia |
87 |
|
|
4 |
|
|
12 |
|
|
79 |
|
| Total stores |
386 |
|
|
5 |
|
|
42 |
|
|
349 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
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