Fossil Group Inc (WBO:FOSL)

Q2 2026 Fossil Group Inc Earnings Call Transcript

Aug 12, 2026 / 09:00 PM GMT

Release Date Price: €4.53 (+1.39%)

Transcript 8-K

Key Points

Positve

Fossil Group Inc (FOSL) delivered strong Q2 2026 results with net sales of $211 million, beating expectations and showing improving sales trends with the decline narrowing.
Gross margin expanded significantly by 490 basis points to 62.4%, driven by a full-price selling model and supply chain initiatives, leading to a raised full-year gross margin outlook in the upper 50s.
Adjusted operating income doubled year-over-year to $9 million, and year-to-date adjusted operating income rose 35% to $18.1 million, demonstrating strong bottom-line flow-through.
The company raised its full-year outlook, now expecting net sales to decline only 3% to 5% (improved from 4% to 6%) and adjusted operating margin of 4% to 6%, with a return to top-line growth in Q4 and positive free cash flow for 2026.
Strong performance in key markets and categories: US wholesale traditional watch growth of 16%, global Fossil brand traditional watch growth of 12%, and double-digit growth in India across all brands and channels.
Operational efficiency initiatives are progressing, including AI deployment, transitioning South Africa to a distributor model, and securing a new lower-cost North American fulfillment center, all aimed at reducing costs and supporting future growth.

Negative

Net sales declined 4% year-over-year in Q2, with a 220 basis point impact from store closures, and the company still expects a full-year sales decline of 3% to 5%.
EMEA region is being increasingly impacted by geopolitical climate in the Middle East, leading to headwinds in travel retail and overall regional performance.
The company faces a headwind from accelerated licensed brand minimum royalty recognition, which partially offset gross margin gains in the quarter.
SG&A expenses remained flat at $123 million, but this was only achieved by excluding an $11 million gain from last year's European distribution center sale, indicating ongoing cost pressures.
The company continues to close stores, ending Q2 with 17 fewer locations and planning further closures, which will continue to pressure sales in the near term.
The full-year gross margin outlook assumes no additional tariff refunds in 2026, leaving potential upside but also uncertainty in the tariff environment.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

FOSL.OQ - Fossil Group Inc
Q2 2026 Fossil Group Inc Earnings Call
Aug 12, 2026 / 09:00PM GMT

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Presentation
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Unidentified_1 [1]
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Good afternoon, ladies and gentlemen, and welcome to the Fossil Group's second 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 Christine Greenie 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 Grevivin, 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

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