Fossil Group reports narrowed operating loss amid turnaround efforts

US accessories company Fossil Group has announced its financial results for the fourth quarter and fiscal year ended January 10, 2026, revealing a significant improvement in operating performance despite a decline in net sales.

Full year sales decline

The Texas-based group reported that net sales for the full year 2025 totaled 1 billion dollars, representing a decrease of 12.3 percent on a reported basis and 12.7 percent in constant currency compared to 2024. This contraction was attributed to the transition to a full price selling model within direct-to-consumer (D2C) channels and the strategic exit from the smartwatch category.

Despite lower turnover, Fossil Group chief executive officer, Franco Fogliato, noted that the initiatives under the turnaround plan launched one year ago have gained traction. "We focused on our core brands, channels and geographies, improved our cost structure and strengthened our balance sheet," Fogliato stated.

Fourth quarter performance and regional shifts

In the fourth quarter of 2025, net sales fell 18.1 percent to 280.5 million dollars. On a constant currency basis, regional performance was down across all markets. Americas revenues decreased 23 percent, Asia decreased 20 and Europe recorded a decline of 14 percent.

Within product categories, traditional watch sales declined 16 percent in constant currency during the final quarter, while jewelry sales dropped 28 percent and the leathers category decreased 37 percent. The Fossil brand recorded a 24 percent decline in constant currency sales during this period.

However, the group achieved an operating income of 0.9 million dollars in the fourth quarter, a notable recovery from the operating loss of 16.3 million dollars reported in the same period of 2024.

Outlook for 2026 and long-term targets

Looking ahead to the full year 2026, the company expects worldwide net sales to decline between 4 percent and 6 percent, though it anticipates a return to growth in the fourth quarter. The adjusted operating margin is projected to be in the range of 3 percent to 5 percent.

The group has also established long-term financial targets for 2028, which include achieving worldwide net sales growth in the low-to-mid single digits and reaching an adjusted operating margin in the high single digits.