Fossil Group, Inc. (NASDAQ: FOSL) today announced financial results
for the fourth quarter and fiscal year ended January 1, 2022.
Quarter and Full Year
Highlights
- Fourth quarter worldwide net sales
increased to $604 million, up 14% on a reported basis and 16% in
constant currency, led by 26% and 21% sales growth in the Americas
and Europe regions, respectively.
- Full year worldwide net sales increased to $1.9 billion, up 16%
on a reported basis and 14% in constant currency. Net sales through
all digital channels grew 23% and 74%, on a reported basis,
compared to full year 2020 and 2019, respectively, and represented
41% of worldwide net sales.
- Full year operating income increased to $93 million, or 5% of
net sales, compared to operating loss of $135 million, or negative
8.4% of net sales a year ago. Adjusted operating income increased
to $124 million compared to an adjusted operating loss of $65
million last year, while adjusted operating margin expanded to 6.6%
from negative 4%.
- Full year diluted earnings per share was $0.48 and adjusted
earnings per share was $1.12 as compared to diluted loss per share
of $1.88 and adjusted loss per share of $0.79 in the prior
year.
- Balance sheet strengthened with the completion of a $150
million unsecured senior notes offering in November 2021. As of
January 1, 2022, total liquidity was $451 million, consisting of
cash and cash equivalents of $251 million and $200 million of
borrowing availability, and total debt was $142 million.
“Our 2021 financial results reflect increasing consumer demand
and strength across key categories and regions,” said Kosta
Kartsotis, Chairman and CEO. “Despite ongoing macro challenges,
including pandemic related restrictions and supply chain headwinds,
superior execution by our teams resulted in double-digit topline
growth of 16% and significantly improved profitability.
During the year, we successfully completed our $250 million New
World Fossil 2.0 – Transform to Grow program and accelerated
strategic investments in digital capabilities and brand building to
drive customer engagement and increase lifetime value.”
Kartsotis concluded, “With a leaner cost structure and a more
robust data-driven digital platform, we entered 2022
well-positioned to capitalize on improving brand strength and
consumer demand. While we recognize that current geopolitical
circumstances may impact consumer sentiment, we remain confident
that executing our core operating and growth strategies will enable
us to deliver sustainable, profitable growth and value creation for
our shareholders over the long-term.”
Fourth Quarter 2021 Operating
Results
Amounts referred to as “adjusted” as well as
“constant currency” are non-GAAP financial measures.
Reconciliations of these non-GAAP financial measures to their
closest reported GAAP measures are included at the end of this
press release.
- Net sales totaled $604.2 million, an increase
of 14% on a reported basis and 16% in constant currency compared to
$528.1 million in the fourth quarter of fiscal 2020. Net sales, in
constant currency, grew 26% in the Americas and 21% in Europe while
decreasing 11% in Asia versus the same quarter last year.
Traditional watch sales grew 18% in constant currency in the fourth
quarter compared to the prior year period. Additionally, total
digital sales grew 7%, on a reported basis, in the fourth quarter
and represented 40% of worldwide net sales.
- Gross profit totaled $302.4 million compared
to $259.6 million in the fourth quarter of 2020. Gross margin
increased 90 basis points to 50.1% versus 49.2% a year ago and
primarily reflected decreased promotional activity, favorable
currency impacts and reduced smartwatch product liquidation. These
benefits were partially offset by increased freight costs, minimum
licensor royalty cost reductions in the prior year fourth quarter
and unfavorable regional mix.
- Operating expenses totaled $255.2 million
compared to $241.3 million a year ago. As a percentage of net
sales, operating expenses were 42.2% in the fourth quarter of 2021
compared to 45.7% in the prior year fourth quarter. Selling,
general and administrative (“SG&A”) expenses were $249.1
million compared to $223.9 million in the fourth quarter of 2020.
As a percentage of net sales, SG&A expenses were 41.2% in the
fourth quarter of 2021 compared to 42.4% in the prior year fourth
quarter, largely driven by the contraction of sales in fiscal year
2020 due to the COVID-19 pandemic and cost reductions driven by New
World Fossil initiatives.
- Operating income increased to $47.2 million
compared to $18.3 million in the fourth quarter of 2020. Operating
margin was 7.8% in the fourth quarter of 2021 compared to 3.5% in
the prior year fourth quarter. Adjusted operating income totaled
$53.3 million compared to $35.7 million in the fourth quarter of
2020. Adjusted operating margin was 8.8% in the fourth quarter of
2021 compared to 6.8% in the prior year fourth quarter.
- Interest expense decreased to $4.8 million
compared to $8.5 million in the fourth quarter of 2020, primarily
driven by a lower debt balance.
- Other income (expense) was an expense of $15.4
million, including a $13.0 million loss on extinguishment of debt,
compared to income of $1.6 million in the fourth quarter of
2020.
- Income (loss) before income taxes was $27.1
million compared to $11.4 million in the fourth quarter of
2020.
- Adjusted EBITDA was $57.6 million, or 9.5% of
net sales in the fourth quarter of 2021 and $50.0 million, or 9.5%
in the prior year period.
- Net income totaled $19.6 million with earnings
per diluted share of $0.37, which compares to a net loss of $3.9
million and net loss per diluted share of $0.08 in the prior year
period. Adjusted net income for the quarter was $33.6 million with
adjusted earnings per diluted share of $0.64 compared to adjusted
net income of $9.8 million with adjusted earnings per diluted share
of $0.19 in the prior year period. During the fourth quarter of
2021, currencies favorably affected income per diluted share by
approximately $0.02.
Full Year 2021 Operating Results
- Net sales totaled
$1.9 billion, an increase of 16% on a reported basis and 14% in
constant currency compared to $1.6 billion in full year 2020. Net
sales, in constant currency, grew in all regions with the Americas
at 21%, Europe at 14% and Asia at 2% versus the prior year.
Traditional watch sales grew 19% in constant currency versus the
prior year. Additionally, total digital sales grew 23%, on a
reported basis, for the full year and represented 41% of worldwide
net sales.
- Gross profit
totaled $966.4 million compared to $770.4 million in 2020. Gross
margin increased 400 basis points to 51.7% versus 47.7% a year ago.
The gross margin improvement primarily reflects decreased
liquidation and inventory valuation adjustments of older generation
smartwatch products (which most heavily impacted the first quarter
of fiscal year 2020), favorable currency changes and decreased
promotional activity. Additionally, the gross profit margin rate
was favorably impacted by reduced tariffs and reduced levels of
minimum licensed product royalties, partially offset by increased
freight costs and unfavorable regional mix and product mix.
- Operating expenses
totaled $873.7 million compared to $905.7 million in fiscal year
2020. As a percentage of net sales, operating expenses were 46.7%
for full year 2021 compared to 56.1% in the prior year. Selling,
general and administrative (“SG&A”) expenses were $842.6
million compared to $835.1 million in fiscal year 2020. As a
percentage of net sales, SG&A expenses were 45.1% in full year
2021 compared to 51.8% in the prior year, mainly driven by the
contraction of sales in fiscal year 2020 due to the COVID-19
pandemic and cost reductions driven by New World Fossil
initiatives.
- Operating income
increased to $92.6 million compared to operating loss of $135.3
million in full year 2020. Operating margin was 5.0% for full year
2021 compared to (8.4%) in the prior year. Adjusted operating
income totaled $123.7 million compared to adjusted operating loss
of $64.7 million in full year 2020. Adjusted operating margin was
6.6% for full year 2021 compared to (4.0%) in the prior year.
- Interest expense
decreased to $25.1 million compared to $31.8 million in full year
2020, primarily driven by a lower debt balance.
- Other income
(expense) was an expense of $14.5 million, including a
$13.0 million loss on extinguishment of debt, compared to expense
of $4.8 million in full year 2020.
- Income (loss) before income
taxes was income of $53.1 million compared to loss of
$172.0 million in the prior year.
- Adjusted EBITDA was $159.6 million, or 8.5% of
net sales in full year 2021 and $7.7 million, or 0.5% in the prior
year.
- Net income totaled
$25.4 million with earnings per diluted share of $0.48, which
compares to a net loss of $96.1 million and loss per diluted share
of $1.88 in the prior year period. Adjusted net income was $59.2
million with adjusted earnings per diluted share of $1.12 compared
to adjusted net loss of $40.3 million with adjusted loss per share
of $0.79 in the prior year period. During full year 2021,
currencies favorably affected income per diluted share by
approximately $0.46.
Balance Sheet Summary
As of January 1, 2022, we had total liquidity of
$451 million, comprised of $251 million of cash and cash
equivalents and $200 million of availability under our revolving
credit facility. Total debt was $142 million, including $150
million under our 7% senior notes due 2026, partially offset by $9
million of debt issuance costs. Inventories at year-end totaled
$347 million, an increase of 17% versus a year ago.
Outlook
For full year 2022, we expect worldwide net
sales growth of approximately 2% to 6%, with stronger
year-over-year growth coming in the second half of the year. The
Company also expects full year Adjusted operating income(1) margin
in the range of approximately 6% to 7%. Our annual revenue guidance
range assumes a negative foreign currency impact of approximately
250 basis points based on prevailing rates.
(1) A reconciliation of Adjusted operating
income, a non-GAAP financial measure, to a corresponding GAAP
measure is not available on a forward-looking basis without
unreasonable efforts due to the high variability and low visibility
of certain income and expense items that are excluded in
calculating Adjusted operating income.
Safe Harbor
Certain statements contained herein that are not
historical facts, constitute “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
and involve a number of risks and uncertainties. The actual results
of the future events described in such forward-looking statements
could differ materially from those stated in such forward-looking
statements. Among the factors that could cause actual results to
differ materially are: increased political uncertainty, the effect
of worldwide economic conditions; the effect of the COVID-19
pandemic; significant changes in consumer spending patterns or
preferences; interruptions or delays in the supply of key
components or products; acts of war or acts of terrorism; loss of
key facilities; data breach or information systems disruptions;
changes in foreign currency valuations in relation to the U.S.
dollar; lower levels of consumer spending resulting from a general
economic downturn or generally reduced shopping activity caused by
public safety or consumer confidence concerns; the performance of
our products within the prevailing retail environment; customer
acceptance of both new designs and newly-introduced product lines;
changes in the mix of product sales; the effects of vigorous
competition in the markets in which we operate; compliance with
debt covenants and other contractual provisions and meeting debt
service obligation; risks related to the success of our business
strategy; the termination or non-renewal of material licenses;
risks related to foreign operations and manufacturing; changes in
the costs of materials and labor; government regulation and
tariffs; our ability to secure and protect trademarks and other
intellectual property rights; levels of traffic to and management
of our retail stores; loss of key personnel and the outcome of
current and possible future litigation, as well as the risks and
uncertainties set forth in the Company’s most recent Annual Report
on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed
with the Securities and Exchange Commission (the “SEC”). These
forward-looking statements are based on our current expectations
and beliefs concerning future developments and their potential
effect on us. While management believes that these forward-looking
statements are reasonable as and when made, there can be no
assurance that future developments affecting us will be those that
we anticipate. Readers of this release should consider these
factors in evaluating, and are cautioned not to place undue
reliance on, the forward-looking statements contained herein. The
Company assumes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required by law.
About Fossil
Group, Inc.
Fossil Group, Inc. is a global design,
marketing, distribution and innovation company specializing in
lifestyle accessories. Under a diverse portfolio of owned and
licensed brands, our offerings include traditional watches,
smartwatches, jewelry, handbags, small leather goods, belts and
sunglasses. We are committed to delivering the best in design and
innovation across our owned brands, Fossil, Michele, Relic, Skagen
and Zodiac, and licensed brands, Armani Exchange, Diesel, DKNY,
Emporio Armani, kate spade new york, Michael Kors, PUMA and Tory
Burch. We bring each brand story to life through an extensive
distribution network across numerous geographies, categories and
channels. Certain press release and SEC filing information
concerning the Company is also available at
www.fossilgroup.com.
Investor Relations: |
Christine Greany |
|
The Blueshirt Group |
|
christine@blueshirtgroup.com |
Consolidated Income Statement Data |
For the 13
Weeks Ended |
|
For the 13
Weeks Ended |
|
For the 52Weeks Ended |
|
For the 53Weeks Ended |
($ in millions, except
per share data): |
January 1, 2022 |
|
January 2, 2021 |
|
January 1, 2022 |
|
January 2, 2021 |
Net sales |
$ |
604.2 |
|
|
$ |
528.1 |
|
|
$ |
1,870.0 |
|
|
$ |
1,613.3 |
|
Cost of sales |
|
301.8 |
|
|
|
268.5 |
|
|
|
903.6 |
|
|
|
842.9 |
|
Gross profit |
|
302.4 |
|
|
|
259.6 |
|
|
|
966.4 |
|
|
|
770.4 |
|
Gross margin (% of net sales) |
|
50.1 |
% |
|
|
49.2 |
% |
|
|
51.7 |
% |
|
|
47.7 |
% |
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
249.1 |
|
|
|
223.9 |
|
|
|
842.6 |
|
|
|
835.1 |
|
Trade name impairments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.5 |
|
Other long-lived asset impairments |
|
2.9 |
|
|
|
6.5 |
|
|
|
9.2 |
|
|
|
31.6 |
|
Restructuring charges |
|
3.2 |
|
|
|
10.9 |
|
|
|
21.9 |
|
|
|
36.5 |
|
Total operating expenses |
$ |
255.2 |
|
|
$ |
241.3 |
|
|
$ |
873.7 |
|
|
$ |
905.7 |
|
Total operating expenses (% of net sales) |
|
42.2 |
% |
|
|
45.7 |
% |
|
|
46.7 |
% |
|
|
56.1 |
% |
Operating income (loss) |
|
47.2 |
|
|
|
18.3 |
|
|
|
92.7 |
|
|
|
(135.3 |
) |
Operating margin (% of net sales) |
|
7.8 |
% |
|
|
3.5 |
% |
|
|
5.0 |
% |
|
(8.4) % |
Interest expense |
|
4.8 |
|
|
|
8.4 |
|
|
|
25.1 |
|
|
|
31.8 |
|
Other income (expense) - net |
|
(15.3 |
) |
|
|
1.6 |
|
|
|
(14.5 |
) |
|
|
(4.8 |
) |
Income (loss) before income taxes |
|
27.1 |
|
|
|
11.5 |
|
|
|
53.1 |
|
|
|
(171.9 |
) |
Provision for income taxes |
|
7.3 |
|
|
|
15.2 |
|
|
|
26.5 |
|
|
|
(76.0 |
) |
Less: Net income attributable to noncontrolling interest |
|
0.2 |
|
|
|
0.2 |
|
|
|
1.2 |
|
|
|
0.2 |
|
Net income attributable to Fossil Group, Inc. |
$ |
19.6 |
|
|
$ |
(3.9 |
) |
|
$ |
25.4 |
|
|
$ |
(96.1 |
) |
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.38 |
|
|
$ |
(0.08 |
) |
|
$ |
0.49 |
|
|
$ |
(1.88 |
) |
Diluted |
$ |
0.37 |
|
|
$ |
(0.08 |
) |
|
$ |
0.48 |
|
|
$ |
(1.88 |
) |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
52.1 |
|
|
|
51.5 |
|
|
|
52.0 |
|
|
|
51.1 |
|
Diluted |
|
52.9 |
|
|
|
51.5 |
|
|
|
52.8 |
|
|
|
51.1 |
|
Consolidated Balance Sheet Data ($ in
millions): |
January 1, 2022 |
|
January 2, 2021 |
Assets: |
|
|
|
Cash and cash equivalents |
$ |
250.8 |
|
$ |
316.0 |
Accounts receivable - net |
|
255.1 |
|
|
229.8 |
Inventories |
|
346.9 |
|
|
295.3 |
Other current assets |
|
169.9 |
|
|
149.4 |
Total current assets |
|
1,022.7 |
|
|
990.5 |
Property, plant and equipment - net |
|
89.8 |
|
|
114.0 |
Operating lease right-of-use assets |
|
177.6 |
|
|
226.8 |
Intangible and other assets - net |
|
78.6 |
|
|
147.2 |
Total long-term assets |
|
346.0 |
|
|
488.0 |
Total assets |
$ |
1,368.7 |
|
$ |
1,478.5 |
|
|
|
|
Liabilities and stockholders’ equity: |
|
|
|
Accounts payable, accrued expenses and other current
liabilities |
$ |
535.0 |
|
$ |
516.9 |
Short-term debt |
|
0.6 |
|
|
41.6 |
Total current liabilities |
|
535.6 |
|
|
558.5 |
Long-term debt |
|
141.4 |
|
|
185.9 |
Long-term operating lease liabilities |
|
174.5 |
|
|
230.6 |
Other long-term liabilities |
|
51.8 |
|
|
63.5 |
Total long-term liabilities |
|
367.7 |
|
|
480.0 |
Stockholders’ equity |
|
465.4 |
|
|
440.0 |
Total liabilities and stockholders’ equity |
$ |
1,368.7 |
|
$ |
1,478.5 |
Constant Currency Financial
Information
The following tables present our business
segment and product net sales on a constant currency basis, which
are non-GAAP financial measures. To calculate net sales on a
constant currency basis, net sales for the current fiscal year
period for entities reporting in currencies other than the U.S.
dollar are translated into U.S. dollars at the average rates during
the comparable period of the prior fiscal year. The Company
presents constant currency information to provide investors with a
basis to evaluate how its underlying business performed excluding
the effects of foreign currency exchange rate fluctuations. The
constant currency financial information presented herein should not
be considered a substitute for, or superior to, the measures of
financial performance prepared in accordance with GAAP.
|
Net Sales |
|
Net Sales |
For the 13 Weeks Ended |
|
For the 53 Weeks Ended |
January 1, 2022 |
|
January 2, 2021 |
|
January 1, 2022 |
|
January 2, 2021 |
($ in millions) |
As Reported |
|
Impact of Foreign Currency Exchange Rates |
|
Constant Currency |
|
As Reported |
|
As Reported |
|
Impact of Foreign Currency Exchange Rates |
|
Constant Currency |
|
As Reported |
Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
262.9 |
|
$ |
(0.7 |
) |
|
$ |
262.2 |
|
$ |
208.4 |
|
$ |
785.9 |
|
$ |
(6.2 |
) |
|
$ |
779.7 |
|
$ |
642.2 |
Europe |
|
210.7 |
|
|
6.3 |
|
|
|
217.0 |
|
|
179.3 |
|
|
610.2 |
|
|
(13.4 |
) |
|
|
596.8 |
|
|
522.4 |
Asia |
|
123.5 |
|
|
0.3 |
|
|
|
123.8 |
|
|
139.2 |
|
|
455.2 |
|
|
(13.7 |
) |
|
|
441.5 |
|
|
434.3 |
Corporate |
|
7.1 |
|
|
— |
|
|
|
7.1 |
|
|
1.2 |
|
|
18.7 |
|
|
(0.1 |
) |
|
|
18.6 |
|
|
14.4 |
Total net sales |
$ |
604.2 |
|
$ |
5.9 |
|
|
$ |
610.1 |
|
$ |
528.1 |
|
$ |
1,870.0 |
|
$ |
(33.4 |
) |
|
$ |
1,836.6 |
|
$ |
1,613.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Categories: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Watches: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Traditional watches |
$ |
409.7 |
|
$ |
2.9 |
|
|
$ |
412.6 |
|
$ |
348.4 |
|
$ |
1,288.5 |
|
$ |
(25.1 |
) |
|
$ |
1,263.4 |
|
$ |
1,057.9 |
Smartwatches |
|
73.8 |
|
|
1.3 |
|
|
|
75.1 |
|
|
78.6 |
|
|
223.9 |
|
|
(2.2 |
) |
|
|
221.7 |
|
|
248.8 |
Total Watches |
$ |
483.5 |
|
$ |
4.2 |
|
|
$ |
487.7 |
|
$ |
427.0 |
|
$ |
1,512.4 |
|
$ |
(27.3 |
) |
|
$ |
1,485.1 |
|
$ |
1,306.7 |
Leathers |
|
53.8 |
|
|
0.4 |
|
|
|
54.2 |
|
|
62.0 |
|
|
157.6 |
|
|
(2.4 |
) |
|
|
155.2 |
|
|
173.6 |
Jewelry |
|
53.8 |
|
|
1.1 |
|
|
|
54.9 |
|
|
32.5 |
|
|
158.8 |
|
|
(3.0 |
) |
|
|
155.8 |
|
|
96.1 |
Other |
|
13.1 |
|
|
0.2 |
|
|
|
13.3 |
|
|
6.6 |
|
|
41.2 |
|
|
(0.7 |
) |
|
|
40.5 |
|
|
36.9 |
Total net sales |
$ |
604.2 |
|
$ |
5.9 |
|
|
$ |
610.1 |
|
$ |
528.1 |
|
$ |
1,870.0 |
|
$ |
(33.4 |
) |
|
$ |
1,836.6 |
|
$ |
1,613.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA, Adjusted operating
income (loss), Adjusted net income (loss) and Adjusted earnings
(loss) per share
Adjusted EBITDA, Adjusted operating income
(loss), Adjusted net income (loss) and Adjusted earnings (loss) per
share are non-GAAP financial measures. We define Adjusted EBITDA as
our net income (loss) before the impact of income tax expense
(benefit), plus interest expense, amortization and depreciation,
impairment expense, other non-cash charges, stock-based
compensation expense, restructuring expense and unamortized debt
issuance costs included in loss on extinguishment of debt minus
interest income. We define Adjusted operating income (loss) as
operating income (loss) before impairment expense and restructuring
expense. We define Adjusted net income (loss) and Adjusted earnings
(loss) per share as net income (loss) attributable to Fossil Group,
Inc. and diluted earnings (loss) per share, respectively, before
impairment expense, restructuring expense and unamortized debt
issuance costs included in loss on extinguishment of debt. We have
included Adjusted EBITDA, Adjusted operating income (loss),
Adjusted net income (loss) and Adjusted earnings (loss) per share
herein because they are widely used by investors for valuation and
for comparing our financial performance with the performance of our
competitors. We also use both non-GAAP financial measures to
monitor and compare the financial performance of our operations.
Our presentation of Adjusted EBITDA, Adjusted operating income
(loss), Adjusted net income (loss) and Adjusted earnings (loss) per
share may not be comparable to similarly titled measures other
companies report. Adjusted EBITDA, Adjusted operating income
(loss), Adjusted net income (loss) and Adjusted earnings (loss) per
share are not intended to be used as alternatives to any measure of
our performance in accordance with GAAP.
The following tables reconcile Adjusted EBITDA
to the most directly comparable GAAP financial measure, which is
income (loss) before income taxes. Certain line items presented in
the table below, when aggregated, may not foot due to rounding.
|
Fiscal 2021 |
|
|
($ in
millions): |
Q1 |
|
Q2 |
|
Q3(1) |
|
Q4 |
|
Total |
Income (loss) before income taxes |
$ |
(22.2 |
) |
|
$ |
7.3 |
|
|
$ |
40.9 |
|
$ |
27.1 |
|
|
$ |
53.1 |
|
Plus: |
|
|
|
|
|
|
|
|
|
Interest expense |
|
7.3 |
|
|
|
6.5 |
|
|
|
6.4 |
|
|
4.8 |
|
|
|
25.1 |
|
Amortization and depreciation |
|
8.9 |
|
|
|
7.5 |
|
|
|
7.0 |
|
|
6.2 |
|
|
|
29.6 |
|
Impairment expense |
|
4.5 |
|
|
|
1.3 |
|
|
|
0.6 |
|
|
2.9 |
|
|
|
9.2 |
|
Other non-cash charges |
|
(0.2 |
) |
|
|
(0.4 |
) |
|
|
1.1 |
|
|
(0.6 |
) |
|
|
(0.1 |
) |
Stock-based compensation |
|
1.8 |
|
|
|
2.5 |
|
|
|
2.9 |
|
|
2.4 |
|
|
|
9.5 |
|
Restructuring expense |
|
7.5 |
|
|
|
5.7 |
|
|
|
5.4 |
|
|
3.2 |
|
|
|
21.9 |
|
Unamortized debt issuance costs included in loss on extinguishment
of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
11.7 |
|
|
|
11.7 |
|
Less: |
|
|
|
|
|
|
|
|
|
Interest Income |
|
0.1 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
0.1 |
|
|
|
0.4 |
|
Adjusted EBITDA |
$ |
7.5 |
|
|
$ |
30.3 |
|
|
$ |
64.2 |
|
$ |
57.6 |
|
|
$ |
159.6 |
|
(1) Prior period amounts have been adjusted to conform to the
current period presentation.
|
Fiscal 2020 |
|
|
($ in
millions): |
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Total |
Income (loss) before income taxes |
$ |
(149.1 |
) |
|
$ |
(43.8 |
) |
|
$ |
9.5 |
|
$ |
11.5 |
|
$ |
(172.0 |
) |
Plus: |
|
|
|
|
|
|
|
|
|
Interest expense |
|
7.5 |
|
|
|
7.9 |
|
|
|
8.0 |
|
|
8.4 |
|
|
31.9 |
|
Amortization and depreciation |
|
12.2 |
|
|
|
10.7 |
|
|
|
10.3 |
|
|
10.0 |
|
|
43.1 |
|
Impairment expense |
|
19.6 |
|
|
|
3.4 |
|
|
|
4.6 |
|
|
6.5 |
|
|
34.0 |
|
Other non-cash charges |
|
18.4 |
|
|
|
2.1 |
|
|
|
2.0 |
|
|
1.0 |
|
|
23.7 |
|
Stock-based compensation |
|
3.1 |
|
|
|
2.9 |
|
|
|
3.2 |
|
|
1.9 |
|
|
11.1 |
|
Restructuring expense |
|
9.4 |
|
|
|
10.5 |
|
|
|
5.7 |
|
|
10.9 |
|
|
36.5 |
|
Less: |
|
|
|
|
|
|
|
|
|
Interest Income |
|
0.2 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
0.2 |
|
|
0.6 |
|
Adjusted EBITDA |
$ |
(79.2 |
) |
|
$ |
(6.4 |
) |
|
$ |
43.3 |
|
$ |
50.0 |
|
$ |
7.7 |
|
The following tables reconcile Adjusted
operating income (loss), Adjusted net income (loss) and Adjusted
earnings (loss) per share to the most directly comparable GAAP
financial measures, which are operating income (loss), net income
(loss) attributable to Fossil Group, Inc. and diluted earnings
(loss) per share, respectively. Certain line items presented in the
table below, when aggregated, may not foot due to rounding.
|
For the 13 Weeks Ended January 1, 2022 |
($ in millions, except
per share data): |
As Reported |
|
Other long-lived asset impairment |
|
Restructuring expenses |
|
Unamortized debt issuance costs included in loss on
extinguishment of debt |
|
As Adjusted |
Operating income (loss) |
$ |
47.2 |
|
|
$ |
2.9 |
|
$ |
3.2 |
|
$ |
— |
|
$ |
53.3 |
|
Operating margin (% of net sales) |
|
7.8 |
% |
|
|
|
|
|
8.8 |
% |
Interest expense |
|
4.8 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
4.8 |
|
Other income (expense) - net |
|
(15.3 |
) |
|
|
— |
|
|
— |
|
|
11.7 |
|
|
(3.6 |
) |
Income (loss) before income taxes |
|
27.1 |
|
|
|
2.9 |
|
|
3.2 |
|
|
11.7 |
|
|
44.9 |
|
Provision for income taxes |
|
7.3 |
|
|
|
0.6 |
|
|
0.7 |
|
|
2.5 |
|
|
11.1 |
|
Less: Net income attributable to noncontrolling interest |
|
0.2 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
19.6 |
|
|
$ |
2.3 |
|
$ |
2.5 |
|
$ |
9.2 |
|
$ |
33.6 |
|
Diluted earnings (loss) per
share |
$ |
0.37 |
|
|
$ |
0.04 |
|
$ |
0.05 |
|
$ |
0.17 |
|
$ |
0.64 |
|
|
For the 13 Weeks Ended January 2, 2021 |
($ in millions, except
per share data): |
As Reported |
|
Other long-lived asset impairment |
|
Restructuring expenses |
|
As Adjusted |
Operating income (loss) |
$ |
18.3 |
|
|
$ |
6.5 |
|
$ |
10.9 |
|
$ |
35.7 |
|
Operating margin (% of net sales) |
|
3.5 |
% |
|
|
|
|
6.8 |
% |
Interest expense |
|
8.5 |
|
|
|
— |
|
|
— |
|
|
8.5 |
|
Other income (expense) - net |
|
1.6 |
|
|
|
— |
|
|
— |
|
|
1.6 |
|
Income (loss) before income taxes |
|
11.4 |
|
|
|
6.5 |
|
|
10.9 |
|
|
28.8 |
|
Provision for income taxes |
|
15.2 |
|
|
|
1.4 |
|
|
2.3 |
|
|
18.9 |
|
Less: Net income attributable to noncontrolling interest |
|
0.2 |
|
|
|
— |
|
|
— |
|
|
0.2 |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(3.9 |
) |
|
$ |
5.1 |
|
$ |
8.6 |
|
$ |
9.8 |
|
Diluted earnings (loss) per
share |
$ |
(0.08 |
) |
|
$ |
0.10 |
|
$ |
0.17 |
|
$ |
0.19 |
|
|
For the 52 Weeks Ended January 1, 2022 |
($ in millions, except
per share data): |
As Reported |
|
Other long-lived asset impairment |
|
Restructuring expenses |
|
Unamortized debt issuance costs included in loss on
extinguishment of debt |
|
As Adjusted |
Operating income (loss) |
$ |
92.6 |
|
|
$ |
9.2 |
|
$ |
21.9 |
|
$ |
— |
|
$ |
123.7 |
|
Operating margin (% of net sales) |
|
5.0 |
% |
|
|
|
|
|
6.6 |
% |
Interest expense |
|
25.1 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
25.1 |
|
Other income (expense) - net |
|
(14.5 |
) |
|
|
— |
|
|
— |
|
|
11.7 |
|
|
(2.8 |
) |
Income (loss) before income taxes |
|
53.0 |
|
|
|
9.2 |
|
|
21.9 |
|
|
11.7 |
|
|
95.8 |
|
Provision for income taxes |
|
26.4 |
|
|
|
1.9 |
|
|
4.6 |
|
|
2.5 |
|
|
35.4 |
|
Less: Net income attributable to noncontrolling interest |
|
1.2 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
1.2 |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
25.4 |
|
|
$ |
7.3 |
|
$ |
17.3 |
|
$ |
9.2 |
|
$ |
59.2 |
|
Diluted earnings (loss) per
share |
$ |
0.48 |
|
|
$ |
0.14 |
|
$ |
0.33 |
|
$ |
0.17 |
|
$ |
1.12 |
|
|
For the 53 Weeks Ended January 2, 2021 |
($ in millions, except
per share data): |
As Reported |
|
Other long-lived asset impairment |
|
Trade name impairment |
|
Restructuring expenses |
|
As Adjusted |
Operating income (loss) |
$ |
(135.3 |
) |
|
$ |
31.6 |
|
$ |
2.5 |
|
$ |
36.5 |
|
$ |
(64.7 |
) |
Operating margin (% of net sales) |
|
(8.4 |
)% |
|
|
|
|
|
(4.0 |
)% |
Interest expense |
|
31.8 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
31.8 |
|
Other income (expense) - net |
|
(4.8 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
(4.8 |
) |
Income (loss) before income taxes |
|
(171.9 |
) |
|
|
31.6 |
|
|
2.5 |
|
|
36.5 |
|
|
(101.3 |
) |
Provision for income taxes |
|
(76.0 |
) |
|
|
6.6 |
|
|
0.5 |
|
|
7.7 |
|
|
(61.2 |
) |
Less: Net income attributable to noncontrolling interest |
|
0.2 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
Net income (loss) attributable to Fossil Group, Inc. |
$ |
(96.1 |
) |
|
$ |
25.0 |
|
$ |
2.0 |
|
$ |
28.8 |
|
$ |
(40.3 |
) |
Diluted earnings (loss) per
share |
$ |
(1.88 |
) |
|
$ |
0.49 |
|
$ |
0.04 |
|
$ |
0.56 |
|
$ |
(0.79 |
) |
Store Count Information
|
January 1, 2022 |
|
January 2, 2021 |
|
Americas |
|
Europe |
|
Asia |
|
Total |
|
Americas |
|
Europe |
|
Asia |
|
Total |
Accessory stores |
65 |
|
49 |
|
52 |
|
166 |
|
72 |
|
68 |
|
54 |
|
194 |
Outlets |
97 |
|
74 |
|
28 |
|
199 |
|
113 |
|
76 |
|
32 |
|
221 |
Full priced multi-brand |
— |
|
2 |
|
3 |
|
5 |
|
— |
|
3 |
|
3 |
|
6 |
Total stores |
162 |
|
125 |
|
83 |
|
370 |
|
185 |
|
147 |
|
89 |
|
421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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