Fossil posts quarterly loss of US$7.8mln; shares slump

Fossil Group, Inc. (NASDAQ: FOSL) shares tumbled 8.2% in after-hours trading today after the company reported its second quarter financial results.

The company reported a net income loss of US$7.8mln for the second quarter of fiscal 2018, compared to US$344.7mln for the second quarter of fiscal 2017.

The diluted earnings loss per share was US$0.16, as compared to US$7.11 for the second quarter of fiscal 2017.

These included restructuring charges of US$0.23 and non-cash intangible asset impairment charges of US$0.10 per diluted share.

“The transformation of our business continues to yield positive results for Fossil Group, as we reported strong momentum in connected watches, expansion in gross margin and a reduction in expense, which led to operating results that surpassed our guidance. While overall sales were down as expected, we generated solid growth in wearables, the Fossil and Armani brands both expanded, and Asia continued to deliver solid growth,” said chairman and chief executive officer, Kosta Kartsotis.

“As we look ahead, our priorities are focused on increasing profitability, accelerating the innovation within our product offerings and continuing to pursue initiatives to further expand our e-Commerce and digital marketing capabilities.”

The company said it remains focused on delivering cost reduction and efficiency initiatives. 

“We are excited about the new products we are delivering for fall and strongly believe our strategies will provide the company with a strong platform to deliver long-term profitable growth in our ongoing efforts to provide value to our shareholders,” added Kartsotis in a statement. 

The company said it plans to transform the company’s business model to address changes in consumer behaviors and their purchases of traditional watches and connected devices, as well as jewelry and leathers.

Shares of Fossil were down 8.2% at US$26.31 on Tuesday. 

Story by ProactiveInvestors