- Prachi Singh |
Fossil Group has reported net loss for the third quarter of fiscal 2017 of 5.4 million dollars compared to net income of 17.4 million dollars for the same quarter of fiscal 2016. Diluted loss per share was 0.11 dollar compared to earnings of 0.36 dollar for the third quarter of fiscal 2016.
Commenting on the third quarter results, Kosta Kartsotis, the company’s Chief Executive Officer, said in a media release: “While our business and the retail environment remain challenging, we are continuing to make progress against key strategic initiatives that tell us we’re on the right track. So far this year, we have tripled our wearables business and continue to see these amazing new products materially improve the trajectory of our watch business.”
Q3 net sales decrease 7 percent
The company said that the impact of a weaker US dollar increased the company’s fiscal 2017 reported net sales by 10.1 million dollars and decreased operating income by 3.1 million dollars. Third quarter worldwide net sales decreased 49.3 million dollars or 7 percent and 59.4 million dollars or 8 percent in constant currency. Across product categories, watches declined with growth in connected watches more than offset by a decline in traditional watches. Leathers and jewellery also declined compared to last fiscal year.
Net sales in the Americas decreased 53.1 million dollars or 15 percent and 54.7 million dollars or 15 percent in constant currency. The company said that a sales decline in the US drove the decrease in the region.
Net sales in Europe increased 4 million dollars or 2 percent and decreased 5.2 million dollars or again 2 percent in constant currency. Third quarter sales in Europe, the company added, benefited from early deliveries planned for the fourth quarter of fiscal 2017. Within the region, modest growth in the UK and Poland was more than offset by declines in the Middle East.
Net sales in Asia decreased 0.2 million dollars, flat as a percentage of sales, and increased 0.6 million dollars in constant currency also flat as a percentage of sales compared to the third quarter of fiscal 2016. Within the region, an increase in India and China was offset by a decline in nearly all other countries. Global retail comps, including e-commerce sales, for the third quarter decreased 6 percent compared to the third quarter of fiscal 2016, with declines in all product categories and all regions.
The company further said that diluted loss per share for the third quarter included a restructuring charge of 0.08 dollar per diluted share and a favorable impact from changes in foreign currency of 0.02 dollar per diluted share.
FY17 net sales expected to decline
On GAAP basis, the company now expects FY17 net sales to decline in the range of 10.5 percent to 8.5 percent, operating margin in a range of negative 17 percent to 15.2 percent and diluted loss per share in a range of 8.30 dollars to 7.75 dollars.
For the fourth quarter of fiscal 2017, the company expects net sales to decline in the range of 11 percent to 3.5 percent, operating margin in a range of 1.9 percent to 5.7 percent and diluted loss per share in a range of 0.08 dollar to 0.47 dollar.
Picture:Fossil Group website