The following is a summary of the Fossil Group, Inc. (FOSL) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Q2 2024 saw net sales decline by 19% on a constant currency basis.

• Gross margin expanded by 390 basis points due to improvements in product margins and lower smartwatch mix.

• Adjusted operating loss was significantly narrowed by nearly 40%, thanks to gross margin expansion and substantial cost reduction.

Business Progress:

• Fossil continues to focus on four core priorities: advancing the Transform and Grow Plan (TAG), strengthening the balance sheet, stabilizing the business, and conducting a strategic review of the business model.

• Positive sales dynamics in traditional watches globally and strong growth in India were reported.

• Exit from the smartwatch category and substantial retail store optimization including closure of up to 55 locations by year-end.

Opportunities:

• Fossil signed an expanded license agreement with SKECHERS, extending terms to 2029, aiming to drive further global growth.

Risks:

• Persistent soft consumer demand in China and ongoing brand repositioning are presenting challenges, especially in licensed watch brands and leathers.

• The wholesale channel in the US and Europe continues to be challenging.

More details: Fossil Group IR

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