The following is a summary of the Fossil Group, Inc. (FOSL) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Fossil Group reported Q1 net sales of $255 million, a decrease of 21% in constant currency from the previous year.

• They managed to reduce the adjusted operating loss to $19 million, an improvement of $6 million y-o-y.

• Through the Transform and Grow Plan, gross margin improved by 300 basis points partly due to the strategic exit from the smartwatch category and cost reductions.

• Operating expenses declined 20% compared to the same period last year primarily from headcount and labor savings.

• A significant improvement was seen in cash flow, which managed to remain positive in Q1 as compared to an $86 million outflow in the previous year.

Business Progress:

• Fossil's Transform & Grow Plan successfully improved gross margins and reduced operating costs, aiming to achieve $100 million of annualized benefits in 2024.

• Positive impact on the financial performance was seen through the exit from the smartwatch category, improved product margins, and lower freight costs.

• Fossil is strategically investing in traditional watches and jewelry, the Indian market, and premium brands to stabilize the business.

• Positive cash flow is expected in the fiscal year 2024 and a strategic review of all business aspects including capital structure is in consideration.

• Leadership changes and the induction of two independent board members are expected to bring fresh perspectives and aid in stabilizing the business.

More details: Fossil Group IR

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