Fossil Group, Inc 10-Q for FY2023 Q2

Fossil Group, Inc. (FOSL)

10-Q 2023-08-10 For: 2023-07-01

Added on April 11, 2026

About this 10-Q

Fossil Group, Inc filed this 10-Q on August 10, 2023, covering the quarter ended July 1, 2023 (FY2023 Q2).

Headline figures

Quarter ended July 1, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $321.97M; down 13.3% from $371.17M a year earlier
Net loss: $26.29M; compared with a net loss of $18.94M a year earlier
Diluted EPS: -$0.51; compared with -$0.37 a year earlier

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		Page
PART I
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)	6
	Condensed Consolidated Statements of Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
	Results of Operations	33
	Liquidity and Capital Resources	44
	Forward-Looking Statements	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
PART II
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 5.	Other Information	49
Item 6.	Exhibits	50
	SIGNATURES	51


	July 1, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	132,107	$	198,726
Accounts receivable - net of allowances for doubtful accounts of $11,575 and $14,647, respectively	162,700		206,133
Inventories	323,914		376,028
Prepaid expenses and other current assets	178,836		164,413
Total current assets	797,557		945,300
Property, plant and equipment - net of accumulated depreciation of $416,987 and $415,172, respectively	75,881		79,882
Operating lease right-of-use assets	144,949		156,947

Intangible and other assets-net	54,976		55,999
Total long-term assets	275,806		292,828
Total assets	$	1,073,363	$	1,238,128
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	139,842	$	191,141
Short-term debt	446		342
Accrued expenses:
Current operating lease liabilities	45,041		49,702
Compensation	43,297		44,259
Royalties	9,092		20,875
Customer liabilities	28,565		41,996
Transaction taxes	7,078		14,303
Other	41,401		40,424
Income taxes payable	6,774		22,878
Total current liabilities	321,536		425,920
Long-term income taxes payable	20,602		22,603
Deferred income tax liabilities	612		616
Long-term debt	243,027		216,132
Long-term operating lease liabilities	135,062		150,188
Other long-term liabilities	15,622		19,660
Total long-term liabilities	414,925		409,199
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, 52,446 and 51,836 shares issued and outstanding at July 1, 2023 and December 31, 2022, respectively	524		518
Additional paid-in capital	308,768		306,241
Retained earnings	107,700		175,491
Accumulated other comprehensive income (loss)	(77,488)		(76,318)
Total Fossil Group, Inc. stockholders’ equity	339,504		405,932
Noncontrolling interests	(2,602)		(2,923)
Total stockholders’ equity	336,902		403,009
Total liabilities and stockholders’ equity	$	1,073,363	$	1,238,128


	For the 13 Weeks Ended July 1, 2023		For the 13 Weeks Ended July 2, 2022		For the 26 Weeks Ended July 1, 2023		For the 26 Weeks Ended July 2, 2022
Net sales	$	321,966	$	371,168	$	647,002	$	747,021
Cost of sales	165,299		179,819		329,618		371,359
Gross profit	156,667		191,349		317,384		375,662
Operating expenses:
Selling, general and administrative expenses	187,187		199,233		378,060		394,991

Other long-lived asset impairments	161		165		216		452
Restructuring expenses	4,632		2,887		11,729		5,438
Total operating expenses	191,980		202,285		390,005		400,881
Operating income (loss)	(35,313)		(10,936)		(72,621)		(25,219)
Interest expense	5,345		4,322		10,350		8,318
Other income (expense) - net	7,172		(1,674)		9,906		(56)
Income (loss) before income taxes	(33,486)		(16,932)		(73,065)		(33,593)
Provision (benefit) for income taxes	(7,198)		2,003		(5,595)		6,690
Net income (loss)	(26,288)		(18,935)		(67,470)		(40,283)
Less: Net income (loss) attributable to noncontrolling interests	241		139		321		305
Net income (loss) attributable to Fossil Group, Inc.	$	(26,529)	$	(19,074)	$	(67,791)	$	(40,588)
Other comprehensive income (loss), net of taxes:
Currency translation adjustment	$	(4,090)	$	(16,087)	$	1,807	$	(23,972)
Cash flow hedges - net change	(191)		3,070		(2,977)		4,168

Total other comprehensive income (loss)	(4,281)		(13,017)		(1,170)		(19,804)
Total comprehensive income (loss)	(30,569)		(31,952)		(68,640)		(60,087)
Less: Comprehensive income (loss) attributable to noncontrolling interests	241		139		321		305
Comprehensive income (loss) attributable to Fossil Group, Inc.	$	(30,810)	$	(32,091)	$	(68,961)	$	(60,392)
Earnings (loss) per share:
Basic	$	(0.51)	$	(0.37)	$	(1.30)	$	(0.78)
Diluted	$	(0.51)	$	(0.37)	$	(1.30)	$	(0.78)
Weighted average common shares outstanding:
Basic	52,349		51,707		52,095		51,853
Diluted	52,349		51,707		52,095		51,853


For the 13 Weeks Ended July 1, 2023
	Common stock			Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive income (loss)		Stockholders' equity attributable to Fossil Group, Inc.		Noncontrolling interest		Total stockholders' equity
	Shares	Par value
Balance, April 1, 2023	51,841	$	518	$	307,592	$	—	$	134,229	$	(73,207)	$	369,132	$	(2,843)	$	366,289
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units	762	8		(8)		—		—		—		—		—		—

Acquisition of common stock for employee tax withholding	—	—		—		(504)		—		—		(504)		—		(504)
Retirement of common stock	(157)	(2)		(502)		504		—		—		—		—		—


Stock-based compensation	—	—		1,686		—		—		—		1,686		—		1,686
Net income (loss)	—	—		—		—		(26,529)		—		(26,529)		241		(26,288)
Other comprehensive income (loss)	—	—		—		—		—		(4,281)		(4,281)		—		(4,281)




Balance, July 1, 2023	52,446	$	524	$	308,768	$	—	$	107,700	$	(77,488)	$	339,504	$	(2,602)	$	336,902


For the 13 Weeks Ended July 2, 2022
	Common stock			Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive income (loss)		Stockholders' equity attributable to Fossil Group, Inc.		Noncontrolling interest		Total stockholders' equity
	Shares	Par value
Balance, April 2, 2022	51,157	$	511	$	302,583	$	—	$	198,134	$	(74,062)	$	427,166	$	2,298	$	429,464
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units	873	9		(9)		—		—		—		—		—		—

Acquisition of common stock for employee tax withholding	—	—		—		(2,430)		—		—		(2,430)		—		(2,430)
Retirement of common stock	(223)	(2)		(2,428)		2,430		—		—		—		—		—


Stock-based compensation	—	—		4,629		—		—		—		4,629		—		4,629
Net income (loss)	—	—		—		—		(19,074)		—		(19,074)		139		(18,935)
Other comprehensive income (loss)	—	—		—		—		—		(13,017)		(13,017)		—		(13,017)

Distribution of noncontrolling interest earnings	—	—		—		—		—		—		—		(5,686)		(5,686)

Balance, July 2, 2022	51,807	$	518	$	304,775	$	—	$	179,060	$	(87,079)	$	397,274	$	(3,249)	$	394,025


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	For the 26 Weeks Ended July 1, 2023		For the 26 Weeks Ended July 2, 2022
Operating Activities:
Net income (loss)	$	(67,470)	$	(40,283)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion	9,868		11,947
Non-cash lease expense	37,848		40,976
Stock-based compensation	3,049		6,085
Decrease in allowance for returns and markdowns	(11,017)		(12,181)

Property, plant and equipment and other long-lived asset impairment losses	215		452

Non-cash restructuring charges	—		876
Bad debt (recovery) expense	(19)		3,917

Other non-cash items	(3,473)		7,250


Changes in operating assets and liabilities:
Accounts receivable	48,337		70,745
Inventories	52,814		(107,449)
Prepaid expenses and other current assets	(17,854)		(16,277)
Accounts payable	(49,890)		(17,339)
Accrued expenses	(23,960)		(62,676)
Income taxes	(17,722)		(3,979)
Operating lease liabilities	(43,774)		(47,843)
Net cash used in operating activities	(83,048)		(165,779)
Investing Activities:
Additions to property, plant and equipment and other	(4,569)		(4,462)
(Increase) decrease in intangible and other assets	(176)		637


Net cash used in investing activities	(4,745)		(3,825)
Financing Activities:

Acquisition of common stock	(516)		(12,431)
Distribution of noncontrolling interest earnings and other	—		(6,069)
Debt borrowings	75,142		177,906
Debt payments	(49,008)		(71,221)
Payment for shares of Fossil Accessories South Africa Pty. Ltd.	(2,316)		—

Net cash provided by financing activities	23,302		88,185
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(2,648)		(3,798)
Net decrease in cash, cash equivalents, and restricted cash	(67,139)		(85,217)
Cash, cash equivalents, and restricted cash:
Beginning of period	204,075		264,572
End of period	$	136,936	$	179,355


	July 1, 2023		July 2, 2022
Cash and cash equivalents	$	132,107	$	167,067
Restricted cash included in prepaid expenses and other current assets	107		110
Restricted cash included in intangible and other assets-net	4,722		12,178
Cash, cash equivalents and restricted cash	$	136,936	$	179,355


	For the 13 Weeks Ended July 1, 2023
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	108,875	$	59,411	$	65,889	$	1,927	$	236,102
Smartwatches	8,443		5,263		4,073		—		17,779
Total watches	$	117,318	$	64,674	$	69,962	$	1,927	$	253,881
Leathers	20,963		4,986		7,373		—		33,322
Jewelry	6,223		15,380		5,755		—		27,358
Other	2,147		3,239		1,033		986		7,405
Consolidated	$	146,651	$	88,279	$	84,123	$	2,913	$	321,966

Timing of revenue recognition
Revenue recognized at a point in time	$	146,496	$	88,084	$	84,009	$	2,638	$	321,227
Revenue recognized over time	155		195		114		275		739
Consolidated	$	146,651	$	88,279	$	84,123	$	2,913	$	321,966


	July 1, 2023		December 31, 2022
Components and parts	$	18,633	$	20,998
Work-in-process	278		—
Finished goods	305,003		355,030
Inventories	$	323,914	$	376,028


	For the 26 Weeks Ended July 1, 2023		For the 26 Weeks Ended July 2, 2022
Beginning balance	$	13,623	$	19,159
Settlements in cash or kind	(3,766)		(4,613)
Warranties issued and adjustments to preexisting warranties (1)	2,403		916
Ending balance	$	12,260	$	15,462


				For the 26 Weeks Ended July 1, 2023			For the 26 Weeks Ended July 2, 2022
Fiscal Year Authorized	Dollar Value Authorized		Termination Date	Number of Shares Repurchased	Dollar Value Repurchased		Number of Shares Repurchased	Dollar Value Repurchased

2010	$	30.0	None	—	$	—	1.0	$	10.0


Stock Appreciation Rights	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in Thousands)			(in Years)	(in Thousands)
Outstanding at April 1, 2023	75	$	46.55	0.9	$	—



Outstanding at July 1, 2023	75	46.55		0.6	—
Exercisable at July 1, 2023	75	$	46.55	0.6	$	—


Stock Appreciation Rights Outstanding					Stock Appreciation Rights Exercisable
Range of Exercise Prices	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Number of Shares	Weighted- Average Exercise Price
	(in Thousands)			(in Years)	(in Thousands)
$36.73 - $55.09	75	$	46.55	0.6	75	$	46.55



Total	75	$	46.55	0.6	75	$	46.55


	For the 13 Weeks Ended July 2, 2022
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	118,736	$	70,436	$	69,524	$	—	$	258,696
Smartwatches	15,377		10,261		7,783		—		33,421
Total watches	$	134,113	$	80,697	$	77,307	$	—	$	292,117
Leathers	22,593		5,320		8,034		—		35,947
Jewelry	9,260		18,639		6,031		—		33,930
Other	2,306		3,235		1,210		2,423		9,174
Consolidated	$	168,272	$	107,891	$	92,582	$	2,423	$	371,168

Timing of revenue recognition
Revenue recognized at a point in time	$	167,899	$	107,690	$	92,441	$	1,058	$	369,088
Revenue recognized over time	373		201		141		1,365		2,080
Consolidated	$	168,272	$	107,891	$	92,582	$	2,423	$	371,168


	For the 26 Weeks Ended July 1, 2023
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	200,231	$	131,215	$	128,155	$	1,927	$	461,528
Smartwatches	20,933		11,885		9,361		—		42,179
Total watches	$	221,164	$	143,100	$	137,516	$	1,927	$	503,707
Leathers	48,074		11,758		13,753		—		73,585
Jewelry	11,642		33,880		10,880		—		56,402
Other	3,703		5,214		2,110		2,281		13,308
Consolidated	$	284,583	$	193,952	$	164,259	$	4,208	$	647,002

Timing of revenue recognition
Revenue recognized at a point in time	$	284,259	$	193,568	$	164,036	$	3,658	$	645,521
Revenue recognized over time	324		384		223		550		1,481
Consolidated	$	284,583	$	193,952	$	164,259	$	4,208	$	647,002


	For the 26 Weeks Ended July 2, 2022
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	234,638	$	151,584	$	133,887	$	13	$	520,122
Smartwatches	32,649		22,947		15,808		2		71,406
Total watches	$	267,287	$	174,531	$	149,695	$	15	$	591,528
Leathers	41,829		12,689		15,614		—		70,132
Jewelry	17,195		39,775		11,656		—		68,626
Other	3,888		5,447		2,385		5,015		16,735
Consolidated	$	330,199	$	232,442	$	179,350	$	5,030	$	747,021

Timing of revenue recognition
Revenue recognized at a point in time	$	329,493	$	231,991	$	179,049	$	2,222	$	742,755
Revenue recognized over time	706		451		301		2,808		4,266
Consolidated	$	330,199	$	232,442	$	179,350	$	5,030	$	747,021


Restricted Stock Units and Performance Restricted Stock Units	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
	(in Thousands)
Nonvested at April 1, 2023	1,870	$	10.05
Granted	1,367	3.04
Vested	(791)	8.72
Forfeited	(211)	9.96
Nonvested at July 1, 2023	2,235	$	6.25


	For the 13 Weeks Ended July 1, 2023
	Currency Translation Adjustments		Cash Flow Hedges
			Forward Contracts		Pension Plan		Total
Beginning balance	$	(84,784)	$	(389)	$	11,966	$	(73,207)
Other comprehensive income (loss) before reclassifications	(4,090)		(625)		—		(4,715)
Tax (expense) benefit	—		183		—		183
Amounts reclassed from accumulated other comprehensive income (loss)	—		(510)		—		(510)
Tax (expense) benefit	—		259		—		259
Total other comprehensive income (loss)	(4,090)		(191)		—		(4,281)
Ending balance	$	(88,874)	$	(580)	$	11,966	$	(77,488)


Functional Currency		Contract Currency
Type	Amount	Type	Amount
Euro	48.8	U.S. dollar	52.0
Canadian dollar	24.7	U.S. dollar	18.6
British pound	4.2	U.S. dollar	5.1
Japanese yen	596.4	U.S. dollar	4.6
Mexican peso	49.5	U.S. dollar	2.4
Australian dollar	2.8	U.S. dollar	1.9
U.S. dollar	4.1	Japanese yen	530.0


	For the 13 Weeks Ended July 1, 2023		For the 13 Weeks Ended July 2, 2022
Cash flow hedges:
Forward contracts	$	(442)	$	6,100

Total gain (loss) recognized in other comprehensive income (loss), net of taxes	$	(442)	$	6,100


Derivative Instruments	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location	Effect of Derivative Instruments	For the 13 Weeks Ended July 1, 2023		For the 13 Weeks Ended July 2, 2022
Forward contracts designated as cash flow hedging instruments	Cost of sales	Total gain (loss) reclassified from accumulated other comprehensive income (loss)	$	(451)	$	2,038
Forward contracts designated as cash flow hedging instruments	Other income (expense)-net	Total gain (loss) reclassified from accumulated other comprehensive income (loss)	$	200	$	992
Forward contracts not designated as hedging instruments	Other income (expense)-net	Total gain (loss) recognized in income	$	38	$	61


	Asset Derivatives						Liability Derivatives
	July 1, 2023			December 31, 2022			July 1, 2023			December 31, 2022
Derivative Instruments	Condensed Consolidated Balance Sheets Location	Fair Value		Condensed Consolidated Balance Sheets Location	Fair Value		Condensed Consolidated Balance Sheets Location	Fair Value		Condensed Consolidated Balance Sheets Location	Fair Value
Forward contracts designated as cash flow hedging instruments	Prepaid expenses and other current assets	$	635	Prepaid expenses and other current assets	$	2,783	Accrued expenses-other	$	2,985	Accrued expenses-other	$	2,659
Forward contracts not designated as cash flow hedging instruments	Prepaid expenses and other current assets	2		Prepaid expenses and other current assets	—		Accrued expenses-other	—		Accrued expenses-other	16



Forward contracts designated as cash flow hedging instruments	Intangible and other assets-net	—		Intangible and other assets-net	112		Other long-term liabilities	—		Other long-term liabilities	318

Total		$	637		$	2,895		$	2,985		$	2,993


	Effect of Derivative Instruments
	For the 13 Weeks Ended July 1, 2023				For the 13 Weeks Ended July 2, 2022
	Cost of Sales		Other Income (Expense)-net		Cost of Sales		Other Income (Expense)-net
Total amounts of income and expense line items presented in the condensed consolidated statements of income (loss) and comprehensive income (loss) in which the effects of cash flow hedges are recorded	$	165,299	$	7,172	$	179,819	$	(1,674)
Gain (loss) on cash flow hedging relationships:
Forward contracts designated as cash flow hedging instruments:
Total gain (loss) reclassified from other comprehensive income (loss)	$	(451)	$	200	$	2,038	$	992
Forward contracts not designated as hedging instruments:
Total gain (loss) recognized in income	$	—	$	38	$	—	$	61


	Fair Value at July 1, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Forward contracts	$	—	$	637	$	—	$	637




Total	$	—	$	637	$	—	$	637
Liabilities:
Contingent consideration	$	—	$	—	$	595	$	595
Forward contracts	—		2,985		—		2,985

Total	$	—	$	2,985	$	595	$	3,580


	Fair Value at December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Forward contracts	$	—	$	2,895	$	—	$	2,895



Total	$	—	$	2,895	$	—	$	2,895
Liabilities:
Contingent consideration	$	—	$	—	$	3,630	$	3,630
Forward contracts	—		2,993		—		2,993

Total	$	—	$	2,993	$	3,630	$	6,623


		July 1, 2023				December 31, 2022
	Useful	Gross		Accumulated		Gross		Accumulated
	Lives	Amount		Amortization		Amount		Amortization
Intangibles-subject to amortization:
Trademarks	10 yrs.	$	3,924	$	3,288	$	3,728	$	3,243
Customer lists	5 - 10 yrs.	—		—		279		266
Patents	3 - 20 yrs.	886		552		867		537


Trade name	6 yrs.	4,502		2,814		4,502		2,439
Other	7 - 20 yrs.	341		216		342		195
Total intangibles-subject to amortization		9,653		6,870		9,718		6,680
Intangibles-not subject to amortization:
Trade names		8,888				8,876
Other assets:

Deposits		16,531				16,487

Deferred tax asset-net		17,275				17,262
Restricted cash		4,724				5,243





Debt issuance costs		2,807				3,124
Other		1,968				1,969
Total other assets		43,305				44,085
Total intangible and other assets		$	61,846	$	6,870	$	62,679	$	6,680
Total intangible and other assets-net				$	54,976			$	55,999


Fiscal Year	Amortization Expense
2023 (remaining)	$	467
2024	$	919
2025	$	728
2026	$	137
2027	$	119
Thereafter	$	413


Lease Cost	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location	For the 13 Weeks Ended July 1, 2023		For the 13 Weeks Ended July 2, 2022		For the 26 Weeks Ended July 1, 2023		For the 26 Weeks Ended July 2, 2022
Operating lease cost(1)	SG&A	$	18,614	$	19,465	$	36,491	$	39,556



Short-term lease cost	SG&A	$	295	$	216	$	510	$	400
Variable lease cost	SG&A	$	5,534	$	7,703	$	11,653	$	14,651


Leases	Condensed Consolidated Balance Sheets Location	July 1, 2023		December 31, 2022
Assets
Operating	Operating lease ROU assets	$	144,949	$	156,947


Liabilities
Current:
Operating	Current operating lease liabilities	$	45,041	$	49,702

Noncurrent:
Operating	Long-term operating lease liabilities	$	135,062	$	150,188


Fiscal Year	Operating Leases
2023 (remaining)	$	39,481
2024	57,158
2025	40,649
2026	30,712
2027	20,729
Thereafter	101,086

Total lease payments	$	289,815
Less: Interest	109,712
Total lease obligations	$	180,103


	For the 26 Weeks Ended July 1, 2023		For the 26 Weeks Ended July 2, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	43,774	$	47,191



Leased assets obtained in exchange for new operating lease liabilities	18,570		20,506


	For the 13 Weeks Ended July 1, 2023				For the 13 Weeks Ended July 2, 2022				Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Americas	$	146.7	45.6	%	$	168.3	45.3	%	$	(21.6)	(12.8)	%	(13.1)	%
Europe	88.3		27.4		107.9		29.1		(19.6)		(18.2)		(19.2)
Asia	84.1		26.1		92.6		24.9		(8.5)		(9.2)		(4.9)
Corporate	2.9		0.9		2.4		0.7		0.5		20.8		20.8
Total	$	322.0	100.0	%	$	371.2	100.0	%	$	(49.2)	(13.3)	%	(12.6)	%


	July 2, 2022	Opened	Closed	July 1, 2023
Americas	157	0	11	146
Europe	113	1	22	92
Asia	79	3	5	77
Total stores	349	4	38	315


	For the 13 Weeks Ended July 1, 2023		For the 13 Weeks Ended July 2, 2022		Change				Operating Margin %
					Dollars		Percentage		2023		2022
Americas	$	23.4	$	30.7	$	(7.3)	(23.8)	%	16.0	%	18.2	%
Europe	(0.7)		14.8		(15.5)		(104.7)		(0.8)		13.8
Asia	7.4		12.4		(5.0)		(40.3)		8.8		13.3
Corporate	(65.4)		(68.8)		3.4		4.9
Total operating income	$	(35.3)	$	(10.9)	$	(24.4)	(223.9)	%	(11.0)	%	(2.9)	%


	For the 13 Weeks Ended July 1, 2023
($ in millions, except per share data):	As Reported			Restructuring Cost of Sales		Other Long-Lived Asset Impairment		Restructuring Expenses		As Adjusted
Operating income (loss)	$	(35.3)		$	2.9	$	0.2	$	4.6	$	(27.6)
Operating margin (% of net sales)	(11.0)		%							(8.6)		%
Interest expense	$	(5.3)		$	—	$	—	$	—	$	(5.3)
Other income (expense) - net	7.2			—		—		—		7.2
Income (loss) before income taxes	(33.5)			2.9		0.2		4.6		(25.8)
Provision (benefit) for income taxes	(7.2)			0.6		—		1.0		(5.6)
Less: net income attributable to noncontrolling interest	(0.2		)	—		—		—		(0.2		)
Net income (loss) attributable to Fossil Group, Inc.	$	(26.5)		$	2.3	$	0.2	$	3.6	$	(20.4)
Diluted earnings (loss) per share	$	(0.51)		$	0.04	$	—	$	0.07	$	(0.40)


Exhibit Number						Document Description

3.1						Third Amended and Restated Certificate of Incorporation of Fossil, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 25, 2010).

3.2						Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation of Fossil, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 28, 2013).

3.3						Fifth Amended and Restated Bylaws of Fossil Group, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on April 3, 2017).

31.1(1)						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

31.2(1)						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

32.1(2)						Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2(2)						Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


			FOSSIL GROUP, INC.

August 10, 2023			/S/ SUNIL M. DOSHI
			Sunil M. Doshi
			Executive Vice President, Chief Financial Officer and Treasurer (Principal financial and accounting officer duly authorized to sign on behalf of the Registrant)