Fossil Group turnover and profit down year-on-year
Sales at Fossil Group have dropped 6.5% in constant currency to $224.8 million in the first fiscal quarter of 2026.
This figure was $233.3 million in the first quarter of fiscal 2025, albeit this represented a 14 week period rather than the 13 weeks that were accounted for in this year’s number.
The company partly blamed a decline in smartwatch sales and the reduction in its store footprint — “store rationalization initiatives” — for the decline.
Gross profit is also down, totalling $134.7 million compared to $143.0 million in the first quarter of 2025. This meant that gross margin is 59.9% versus 61.3% in 2025. The Group primarily attributed this negative growth to increased tariffs and “the accelerated timing of licensed brand minimum royalty recognition.”
More positively, adusted EBITDA, gross margin, and net sales all beat the estimates of investment banking company, Maxim Group.
On a brand-specific basis, Armani Exchange, Diesel, and Michael Kors were up, but the Fossil brand itself was down 17% in constant currency.
Despite these results, and despite saying that its forecast was for net sales to decline 4%–6%, the company remains optimistic that it can turn the ship around, saying that it expected a return to growth in the fourth quarter.
“We remain confident in our full year outlook, including a return to top line growth in the fourth quarter, and believe our proven strategies and structural advantages position us to drive long-term profitable growth and value creation,” said CEO Franco Fogliato.
