RICHARDSON, Texas - Fossil Group, Inc. (NASDAQ: NASDAQ:FOSL) today announced the appointment of Andrew Skobe as Interim Chief Financial Officer, effective immediately. Skobe, with over 30 years of experience in various financial and leadership roles, takes over from Sunil Doshi, who will depart after aiding in the transition until July 19, 2024.
The company, which is in the midst of executing its Transform and Grow Plan, has initiated a search for a permanent CFO to succeed Doshi. Fossil's Interim CEO, Jeffrey N. Boyer, expressed gratitude to Doshi for his contributions and welcomed Skobe, highlighting his extensive background that includes business transformation, capital raising, and restructuring, as well as global operations and mergers and acquisitions.
Prior to joining Fossil, Skobe held significant positions at Radisson Hotel Group, Croscill Home-Excell-Glenoit, and Icahn Enterprises, among others. His appointment comes at a time when Fossil is conducting a Strategic Business Review.
In addition to the leadership change, Fossil Group reaffirmed its financial outlook for 2024. The company anticipates worldwide net sales of around $1.2 billion, an adjusted operating margin between -3% to -5%, and positive free cash flow, inclusive of approximately $57 million in tax refunds received in the second quarter of 2024. The second quarter earnings results are expected to be reported on August 8, 2024.
Fossil Group, known for its lifestyle accessories under various owned and licensed brands, remains focused on its commitment to design and innovation. The company's extensive distribution network spans numerous geographies, categories, and channels, supporting brands such as Fossil, Michele, Relic, and Skagen, as well as licensed brands including Armani Exchange, Diesel, and Michael Kors.
This leadership change and financial affirmation by Fossil Group are based on a press release statement, and no further details were provided regarding the reasons for Doshi's departure or the specifics of the ongoing Strategic Business Review.
In other recent news, Fossil Group has announced its first quarter 2024 earnings, showcasing a narrowed operating loss and an increase in free cash flow, despite a notable decline in net sales. The company's Transform & Grow Plan (TAG) is attributed to these positive trends, with anticipated accelerated benefits in the upcoming years.
Fossil Group's commitment to enhancing gross margins and reducing operating expenses remains steadfast, even amidst sales pressure in crucial categories. The company's full-year guidance remains unchanged, forecasting sales around $1.2 billion and an adjusted operating margin loss of 3% to 5%.
Fossil Group's net sales dropped to $255 million, a 21% decrease in constant currency, partially due to store closures and the decision to exit the smartwatch business. Still, the company is making strides to strengthen its balance sheet and generate positive free cash flow throughout 2024. Fossil Group's TAG plan is expected to contribute over $100 million in P&L benefits to gross margin expansion in 2024.
Sales pressure continues, particularly in licensed fashion watch brands and leathers, which account for over 40% of revenue. Despite these challenges, half of the Q1 revenue base is showing signs of stabilization, with only a 1% decline in net sales. Fossil Group's focus on executing its TAG plan and fortifying the balance sheet is expected to stabilize the business.
InvestingPro Insights
As Fossil Group (NASDAQ: FOSL) navigates through its leadership transition and continues with its Transform and Grow Plan, the latest financial metrics and market data provide a snapshot of the company's current standing.
With a market capitalization of approximately $76.22 million, Fossil's valuation reflects a challenging period, as evidenced by a negative price-to-earnings (P/E) ratio of -0.54 for the last twelve months as of Q1 2024. This is further highlighted by the company's revenue decline of 17.74% during the same period, indicating the headwinds Fossil faces in the market.
Despite these challenges, Fossil's stock has experienced a notable upswing over the past month, with a 20.0% total return. This short-term performance may capture the interest of investors looking for volatility plays, as the stock's price movements have been quite volatile. Moreover, an InvestingPro Tip points out that Fossil is trading at a low Price / Book multiple of 0.33, which could suggest that the company's assets are potentially undervalued in the current market.
Investors interested in a deeper dive into Fossil's financial health and stock performance can find more InvestingPro Tips, which may offer insights into the company's strong free cash flow yield and its liquidity position, where liquid assets exceed short-term obligations.
For those considering an investment in Fossil or seeking to understand the implications of the recent CFO appointment, these tips can be valuable. There are 11 additional InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/FOSL. Readers who find these insights beneficial can take advantage of an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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