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SEC filingFossil Group, Inc. reported net sales of $1.00 billion for fiscal year 2025, a decrease of 12.3% (12.7% in constant currency) compared to fiscal year 2024. The company incurred a net loss attributable to Fossil Group, Inc. of $78.3 million, an improvement from a net loss of $102.7 million in the prior year. Gross profit was $563.1 million with a gross margin of 56.1%, up from 52.2% in fiscal 2024, driven by a full-price selling model and sourcing initiatives. Operating expenses decreased to $582.2 million, resulting in an operating loss of $19.1 million. The company used $57.9 million in cash from operating activities, primarily due to the net loss and changes in working capital. Key strategic initiatives included a Turnaround Plan focused on refocusing on core businesses, rightsizing the cost structure, and strengthening the balance sheet, which achieved SG&A cost savings of approximately $100 million compared to fiscal 2024.
Fossil Group, Inc. reported a net loss attributable to the company of $78.3 million for fiscal year 2025, an improvement from a net loss of $102.7 million in fiscal 2024. Net sales decreased 12.3% to $1.00 billion, with a 12.7% decline in constant currency. The operating loss was $19.1 million, compared to an operating loss of $103.9 million in the prior year. Gross profit decreased 5.7% to $563.1 million, but gross margin improved to 56.1% from 52.2% in fiscal 2024. The company used $57.9 million in cash from operating activities, generated $22.1 million from investing activities (primarily from asset sales), and used $5.0 million in financing activities. Total comprehensive loss attributable to Fossil Group, Inc. was $55.6 million.
Consolidated net sales decreased $140.6 million, or 12.3%, largely driven by the return to a full-price selling model in direct-to-consumer channels, partially offset by strength in traditional watches in the wholesale channel. Global comparable retail sales decreased 23.3% on a 53-week calendar basis due to sales decreases in owned e-commerce websites and, to a lesser extent, retail stores. From a product perspective, traditional watch sales decreased 6.6%, smartwatch sales declined 52.6% as the company exited the category, leathers declined 37.1%, and jewelry declined 20.4%. Geographically, the Americas segment accounted for 42.9% of revenue ($430.9 million, down 16.4%), Europe accounted for 33.2% ($333.3 million, down 6.8%), and Asia accounted for 23.8% ($238.6 million, down 11.7%).
Gross profit margin increased to 56.1% in fiscal 2025 from 52.2% in fiscal 2024, primarily due to improved product margins in core categories driven by benefits from the full-price selling model and sourcing initiatives. Operating expenses decreased to $582.2 million (58.0% of net sales) from $701.1 million (61.2% of net sales) in fiscal 2024. SG&A expenses were $540.1 million (53.8% of net sales) compared to $638.8 million (55.8% of net sales) in the prior year, driven by cost reductions and efficiencies gained through restructuring programs. The company incurred $40.6 million in restructuring charges and $1.5 million in long-lived asset impairment charges. Operating margin was -1.9% compared to -9.1% in fiscal 2024.
Net cash used in operating activities was $57.9 million, primarily due to the net loss of $77.8 million, partially offset by non-cash adjustments including depreciation and amortization of $13.1 million and non-cash lease expense of $56.7 million. Changes in operating assets and liabilities used $66.6 million, mainly from decreases in accounts payable and operating lease liabilities. Net cash provided by investing activities was $22.1 million, primarily from $23.0 million in proceeds from the sale of property, plant and equipment. Net cash used in financing activities was $5.0 million. As of January 3, 2026, total assets were $689.3 million, with current assets of $467.8 million including $95.8 million in cash and cash equivalents. Total liabilities were $602.5 million, including $301.8 million in current liabilities and $300.7 million in long-term liabilities. Total stockholders' equity was $86.8 million.
For 2026 and beyond, the company is progressing its Turnaround Plan with a focus on three new strategic pillars: driving profitable growth, optimizing the operating model, and building shareholder value. Over the next three years, this evolution is expected to generate a return to top-line growth and improved operating margins and free cash flows. Specific initiatives include leveraging the FOSSIL brand platform, modernizing point of sale expression, focusing on top customers in key markets, stabilizing e-commerce, reducing the pace of store closures, strengthening digital infrastructure, and generating improved free cash flow to strategically deploy capital toward growth and debt reduction. Key risks include tariffs negatively impacting gross margin by approximately 140 basis points during fiscal 2025, with future adverse effects likely if tariff levels persist or rise, especially for goods imported from China.