Shares of Fossil Group plummeted over 18% following disappointing sales figures and a downward revision of its full-year sales forecast.
In midday trading, the stock dropped by more than 18% to $1.97, contributing to an overall decline of over 54% this year.
The parent company, headquartered in Richardson, Texas, boasts well-known brands such as Skagen and Zodiac. It reported sales of $322 million, reflecting a 13% decrease compared to the previous year. Traditional watch sales saw an 8% decline, while smartwatch sales experienced a significant drop of 46%.
Chief Executive Kosta Kartsotis acknowledged the challenging performance of the wholesale channel in the Americas and Europe throughout 2023. He attributed the decline to stores underinvesting in the watch business, resulting in considerable pressure on their operating results. Moreover, the sluggish reopening in China further dampened sales.
The company’s loss widened from 37 cents per share to 51 cents per share compared to the same period last year.
Fossil has now adjusted its full-year sales outlook, projecting a sales drop between 5% and 10%, as opposed to its previous forecast of up to 1% growth or a decline of up to 5%.
To counteract these difficulties, Fossil is expanding its cost-cutting program and has enlisted the expertise of consulting firm Alvarez & Marsal’s Consumer and Retail Group. The company aims to achieve approximately $300 million in annual operating income benefits by the end of 2025 through this revamped plan.