Q1 2026 Fossil Group Inc Earnings Call Transcript
Key Points
- Fossil Group Inc (FOSL) reported strong financial performance in Q1 2026, with net sales of $218 million and a healthy gross margin of 59.9%.
- The company achieved positive adjusted operating income of $10 million, driven by strict expense control and strong performance in wholesale core brands.
- Fossil Group Inc (FOSL) saw notable strength in traditional watches, marking a return to top-line growth in this category for the first time in years.
- The company is successfully executing its turnaround strategy, focusing on profitable growth, optimizing its operating model, and building shareholder value.
- Fossil Group Inc (FOSL) is making progress in its omnichannel initiatives, improving e-commerce profitability and enhancing the customer journey with new navigation features on its website.
- Net sales in Q1 2026 were down 6% from the previous year, impacted by the absence of an extra week in last year's first quarter and store closures.
- Gross margin decreased by 140 basis points year over year, affected by higher tariff expenses and licensed brand minimum royalties.
- The geopolitical climate and potential impacts on consumer behavior and input costs pose uncertainties for the company's future performance.
- Fossil Group Inc (FOSL) continues to face challenges in its direct-to-consumer channel, with ongoing store closures and a focus on reducing sales from older inventory.
- The company is cautious about its full-year guidance, maintaining expectations for a 4% to 6% decline in worldwide net sales despite strong Q1 results.
Good afternoon, ladies and gentlemen, and welcome to the Fossil Group first-quarter 2026 earnings call. At this time, all parties are in listen-only mode. This conference call is being recorded and may not be reproduced in whole or in part without written permission from the company.
Now, I'll turn the call over to Christian Greany of The Blue Shirt Group to begin.
Hello, everyone, and thank you for joining us. With me on the call today is Franco Fogliato, Chief Executive Officer; and Randy Greben, Chief Financial Officer.
Before we begin, I would like to remind you that information made available during this conference call contains forward-looking information, and actual results could differ materially from those that will be discussed during this call. Fossil Group's policy on forward-looking statements and additional information concerning a number of factors that could cause actual results to differ materially from such statements is readily available in the company's Form 8-K,
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