Hoping to Not Become a Fossil
Fossil Group, Inc. reported earnings last month, and the stock has declined nearly 28% since the release; it is down close to 70% year to date. Its Q2 results saw sales decrease by 13% or $88.6M. Sales were down in each of its product categories: watches down 9%, Leathers down 25% and Jewelry down 22%. Sales, also, decreased in each of its three main geographies. The company lost $-344.7 million in Q2. However, the majority of this loss was due to a write-down of its intangible assets. Diluted loss per share was $(7.11) and included the non-cash intangible asset impairment charges of $6.50 and a restructuring charge of $0.13 per diluted share. Fossil also gave a forecast for its Q3 results. It expects that sales will drop by 8% to 14% and that its operating margin will be close to break even.
The company's stock hit a low of $6.8 on the year, but is currently around $8 and off its 52 week lows. The company is betting on Android focused watches for 2018. Many of its new watches feature AMOLED displays that offer a perfectly circular touchscreen interface. Amoled watches from Fossil
Fossil faces headwinds from changing consumer shopping habits. However, its sales and stock has fallen far more than its competitor Movado, a watch maker. Therefore, there are other missteps that Fossil has made along the way. Fossil will need to make adjustments in order to grow in 2018.