Fossil Group, Inc., a watch and accessory company based in Richardson, Texas, announced a narrower net loss for the fourth quarter of 2020 despite facing a decline in sales. The company reported a net loss of $4.0 million, or $0.08 per diluted share, compared to a loss of $6.9 million, or $0.14 per diluted share, in the same period the previous year. Although there was improvement in the net loss, quarterly net sales decreased by 26% year over year, from $711.6 million to $528.1 million. This decline can be attributed to the decrease in foot traffic at both Fossil’s owned stores and its wholesale doors, which was caused by the impact of the COVID-19 pandemic.
However, Fossil was able to partially mitigate this decline through its digital channels, which experienced a growth of 25% on a constant currency basis. The company’s digital capabilities played a crucial role in meeting the increased online demand during the pandemic.
Fossil’s progress in its bottom line was also aided by a reduction in selling, general, and administrative expenses, which totaled $230 million, representing a 24% decrease from the previous year. Kosta Karsotis, Chairman and CEO of Fossil, praised the resilience and strategic growth priorities of the company’s teams during the challenging external environment. He emphasized the successful utilization and expansion of Fossil’s digital capabilities to meet the needs of customers.
For the full year of 2020, Fossil’s net sales experienced a decline of 27%, from $2.2 billion to $1.6 billion. The company reported an annual net loss of $96.1 million, or $1.88 per diluted share, compared to a loss of $52.4 million, or $1.04 per diluted share, in the previous year.
Apart from the financial results, Fossil also announced the appointment of Sunil Doshi as the new CFO and treasurer, effective March 29, 2021. Doshi, currently serving as the SVP for global finance and accounting, brings more than 20 years of experience in senior finance roles to the position. He previously held the role of CFO for Fossil Group’s Americas region from 2012 to 2015 and rejoined the company in June 2020. Doshi will report to COO Jeffrey Boyer.
Looking ahead, Fossil anticipates a decline in net sales of 12% to 17% in the first quarter of 2021, which will end on April 3. However, the company expects a net sales increase of 10% to 15% for the fiscal year 2021. As part of its strategy, Fossil plans to further reduce its store count by approximately 65 to 75 locations this year. Currently, the company operates 421 locations worldwide, having closed 30 stores in 2020.
Useful links:
1. Fossil Group, Inc.
2. Fossil Group, Inc. on Reuters
