Fossil Group posts Q3 sales decline despite ongoing turnaround efforts

Fossil Group, Inc. reported fiscal third-quarter 2025 results that reflect continued progress in its multi-year turnaround, alongside a major balance sheet milestone that executives say positions the company for long-term profitable growth.

CEO Franco Fogliato highlighted the completion of a comprehensive refinancing this week, calling it a “pivotal milestone” that strengthens the company’s financial foundation and follows a year of rebuilding Fossil into a “consumer-focused, brand-led operating model” with improved margins, lower costs, and a fortified balance sheet.

For the quarter ended October 4, 2025, net sales declined 6.1 percent to 270.2 million dollars, or 7.1 percent in constant currency, driven primarily by store rationalization and ongoing weakness in direct-to-consumer channels, where sales fell 27 percent and comparable retail sales dropped 22 percent.

Regionally, sales in constant currency fell 9 percent in the Americas, 10 percent in Europe, and rose 2 percent in Asia. Wholesale revenue improved 3 percent, while product trends remained mixed: traditional watch sales slipped 1 percent, leathers declined 37 percent, and jewellery dropped 23 percent. Among major brands, Diesel and Armani Exchange grew, while Fossil declined.

Gross profit decreased 6.9 percent to 132.4 million dollars, with gross margin contracting slightly to 49 percent due to higher tariffs and royalty obligations, partially offset by improved product margins from sourcing efficiencies. On an adjusted, constant-currency basis, operating loss improved to 14.9 million dollars from 22 million dollars last year. Net loss totaled 39.9 million dollars, or 76 cents per diluted share, compared with a loss of 32 million dollars, or 60 cents per share, in the prior-year quarter. Adjusted EBITDA was a loss of 15 million dollars, roughly flat versus last year.

Despite ongoing top-line challenges, Fossil reaffirmed its full-year 2025 outlook, expecting worldwide net sales to decline in the mid-teens—reflecting approximately 45 million dollars in impacts from store closures—and adjusted operating margin to be breakeven to slightly positive.

Fogliato emphasized that with restructuring largely complete and the balance sheet strengthened, Fossil is prepared to “turn the page” and pursue sustainable growth in the years ahead.