Fossil Group Lifts Outlook on Q2 Profit
Fossil Group(NASDAQ:FOSL) reported results for the second quarter of 2025 on August 13, surpassing expectations with adjusted operating income of $4 million, gross margin of 57.4%, and cost reductions driving a $32 million year-over-year reduction in SG&A expense. Management raised full-year 2025 guidance, now targeting breakeven to slightly positive adjusted operating margins (non-GAAP), and announced a comprehensive $150 million debt refinancing extending maturities to 2029. The analysis below explores the implications of key turnaround progress, improvements in channel profitability, and product strategy for long-term investors.
Gross margin expanded 480 basis points year-over-year to 57.4% in the second quarter, supported by an exit from connected watches, improved product costing, and lower freight costs. Management signaled the third consecutive quarter of improved gross margin, reporting 57.4%, with adjusted operating income swinging from a $17 million loss to a $4 million profit compared to the prior year.
Delivering consistent gross margin gains and improved adjusted operating income underscores management’s ability to execute structural changes, reduce channel discounting, and strengthen pricing power in a highly competitive luxury accessories market.
Source Fool.com
