Fossil Group, Inc. (NASDAQ:FOSL) saw its stock plunge 14% on Friday morning after the company delivered a mixed set of third-quarter results—topping revenue expectations but falling far short on profitability.
The accessories and watchmaker reported $270.2 million in revenue for the quarter, comfortably above analysts’ forecasts of $233.32 million. However, Fossil posted an adjusted loss of -$0.63 per share, far worse than the expected -$0.25, and representing a 6.1% revenue decline from a year earlier.
Shares slid as investors focused on the deeper-than-anticipated loss, even though overall sales performed better than expected. Fossil recorded an operating loss of $21.7 million, translating into an operating margin of -8.0%, a slight improvement from -8.5% in the same quarter last year.
“We are pleased to report another quarter of progress and momentum under our turnaround as our teams continue to deliver superior execution against the three key pillars of our plan,” said CEO Franco Fogliato. “Importantly, this week we completed the successful transformation of our balance sheet.”
By product category, traditional watch revenue slipped 1% in constant currency, while the leathers segment plunged 37% and jewelry sales dropped 23%. Regionally, net sales in constant currency were down 9% in the Americas and 10% in Europe, but climbed 2% in Asia.
Fossil reaffirmed its 2025 full-year outlook, expecting global net sales to fall in the mid-teens and projecting adjusted operating margin to range from break-even to slightly positive. This guidance reflects an estimated $45 million impact from planned retail store closures.
The company also completed a major balance sheet overhaul, extending its debt maturity by three years and securing $32.5 million in additional financing—moves management says will enhance financial flexibility as its turnaround progresses.