Fossil Group’s Turnaround Under New CEO

Fossil Group is showing fresh signs of a turnaround under a new CEO. The Richardson-based company known for its watches revealed that sales, while declining, should improve over previous expectations. Adjusted operating margins are on the upswing, according to a statement this week. Fossil also announced new debt refinancing.

Shares, which have been volatile in recent weeks, rose about 22% at around 11:45 a.m. Dallas time Thursday on the Nasdaq.

Background and Context

CEO Franco Fogliato, who formerly worked at places such as Columbia Sportswear, has been pushing for a new chapter at Fossil as the company grapples with long-term challenges for watches, including shifting tastes and the popularity of smartwatches from Apple and others. Under the new leadership, the company has been more focused on its core business along with improving the balance sheet and shedding costs.

That’s included doubling down on the strengths with its traditional watches, bolstered by leveraging its labs in Texas, Switzerland and Hong Kong — while investing in marketing and how customers interact with the brands. And that’s all come as the company has worked to move away from promotions and reach for “full pricing.”

Progress and Updates

“Since joining the company last September, the pace of change has been fast and furious — and our progress has been notable,” Fogliato said in prepared remarks in conjunction with the quarterly update. “We have much more work ahead but the opportunity is significant.”

For the full year 2025, worldwide net sales are expected to decline in the mid-teens compared to earlier guidance for a decrease in the mid-to-high teens. The adjusted operating margin is slated to be breakeven to slightly positive after prior expectations of guidance of negative low single digits.

Financial Performance

In the second fiscal quarter of 2025, sales fell 15% to $220 million. Gross margin increased to 57.5% compared to 52.6% in the year-ago period. Fossil is shedding stores to help trim expenses, shuttering a half dozen in the quarter.

Future Plans and Initiatives

In the current quarter the company is gearing up for the official global launch of Nick Jonas as its “global brand ambassador,” Fogliato said in the call’s remarks.

“We have a series of exciting consumer activations and VIP events planned, which will kick off next week when we welcome consumers and fans to the Fossil Diner — a branded pop-up experience in New York City,” Fogliato said. “We are confident that Nick’s global reach and influence will help us build increased awareness of the Fossil brand.”

Tariffs and Supply Chain

As for tariffs, the company “remains confident” it can mitigate the full impact to its costs of goods sold this year, CFO Randy Greben said in the prepared remarks.

“As a global organization with a flexible supply chain and significant scale, we are well-positioned,” Greben said. “We have several tactics in our arsenal, ranging from cost sharing with vendors to optimizing our sourcing allocations and distribution to strategic pricing actions.”

Conclusion

In conclusion, Fossil Group is showing signs of a turnaround under its new CEO, Franco Fogliato. The company is focusing on its core business, improving its balance sheet, and shedding costs. With the launch of Nick Jonas as its global brand ambassador and a series of consumer activations and VIP events, Fossil is confident that it can build increased awareness of its brand.

Frequently Asked Questions

Q: What is Fossil Group’s current financial situation?

A: Fossil Group’s sales are declining, but the company expects them to improve over previous expectations. The adjusted operating margin is expected to be breakeven to slightly positive.

Q: Who is Fossil Group’s new CEO?

A: Fossil Group’s new CEO is Franco Fogliato, who formerly worked at places such as Columbia Sportswear.

Q: What is Fossil Group’s strategy to mitigate the impact of tariffs?

A: Fossil Group has several tactics in its arsenal to mitigate the impact of tariffs, including cost sharing with vendors, optimizing its sourcing allocations and distribution, and strategic pricing actions.

Q: Who is Fossil Group’s new global brand ambassador?

A: Fossil Group’s new global brand ambassador is Nick Jonas.

Q: What is Fossil Group’s plan to increase awareness of its brand?

A: Fossil Group plans to increase awareness of its brand through a series of consumer activations and VIP events, including the launch of Nick Jonas as its global brand ambassador and the Fossil Diner — a branded pop-up experience in New York City.