Fossil Group, Inc. recently announced that it has managed to narrow its losses for the fourth quarter ended January 2, 2021, despite a decline in sales. The watch and accessory company, based in Richardson, Texas, reported a net loss of $4.0 million, or $0.08 per diluted share, a significant improvement from the loss of $6.9 million, or $0.14 per diluted share, in the same period the previous year. However, quarterly net sales experienced a significant decrease of 26%, dropping from $711.6 million to $528.1 million, with the decline in constant currencies reaching 28%. This decline can largely be attributed to the impact of the Covid-19 pandemic on foot traffic, both in Fossil’s owned stores and wholesale doors.

Despite the decline in overall revenues, Fossil was able to make progress in its bottom line by implementing measures to reduce selling, general, and administrative expenses, which decreased by 24% from the previous year. Kosta Karsotis, Fossil’s chairman and CEO, commended the resilience and adaptability of the company’s teams in navigating the challenging environment brought about by the pandemic. He also acknowledged the company’s strategic focus on digital growth opportunities, which helped mitigate the negative impact on brick-and-mortar operations. Fossil’s digital channels experienced a growth of 25% in constant currency basis.

For the full year 2020, Fossil reported a significant decrease in net sales by 27%, dropping from $2.2 billion to $1.6 billion. The annual net loss amounted to $96.1 million, or $1.88 per diluted share, compared to $52.4 million, or $1.04 per diluted share, in the previous year.

In addition to the financial updates, Fossil also announced the promotion of Sunil Doshi, the current SVP for global finance and accounting, to the position of CFO and treasurer, effective March 29, 2021. Doshi brings over 20 years of experience in senior finance roles, including his previous role as CFO for Fossil Group’s Americas region from 2012 to 2015. He rejoined the company in June 2020 after working at Mitra QSR and Zoe’s Kitchen as CFO. Doshi holds a BS in accounting from Ohio State University and an MBA from the University of Chicago’s Booth School of Business.

Looking ahead, Fossil anticipates a decline in net sales of 12% to 17% for the first quarter ending April 3, 2021, followed by an increase of 10% to 15% for fiscal year 2021. The company plans to continue reducing its store count, with the aim of closing approximately 65 to 75 locations in 2021. Currently, Fossil Group operates 421 stores worldwide, having closed 30 stores in 2020. Despite the challenging market conditions, Fossil remains committed to adapting its business strategies and leveraging digital capabilities to best serve its customers.

Useful links:
Fossil Group Official Website
Forbes Article on Fossil Group’s Financial Performance