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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________________

FORM 10-Q

__________________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: July 5, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-41040

__________________________________________________________________

FOSSIL GROUP, INC.

(Exact name of registrant as specified in its charter)

__________________________________________________________________

Delaware

75-2018505

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

901 S. Central Expressway,

Richardson,

Texas

75080

(Address of principal executive offices)

(Zip Code)

(972) 234-2525

(Registrant’s telephone number, including area code)

__________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Ticker Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

FOSL

The Nasdaq Stock Market LLC

7.00% Senior Notes due 2026

FOSLL

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of August 5, 2025: 53,785,369

FOSSIL GROUP, INC.

FORM 10-Q

FOR THE FISCAL QUARTER ENDED JULY 5, 2025

INDEX


		Page
PART I
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)	6
	Condensed Consolidated Statements of Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
	Results of Operations	34
	Liquidity and Capital Resources	45
	Forward-Looking Statements	48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	49
PART II
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
	SIGNATURES	54

Trademarks, service marks, trade names and copyrights

We use our FOSSIL, MICHELE, RELIC, SKAGEN and ZODIAC trademarks, as well as other trademarks, on watches, our FOSSIL and SKAGEN trademarks on jewelry, and our FOSSIL trademark on leather goods and other fashion accessories in the U.S. and in a significant number of foreign countries. We also use FOSSIL, SKAGEN, WATCH STATION INTERNATIONAL and WSI as trademarks on retail stores and FOSSIL, SKAGEN, WATCH STATION INTERNATIONAL, WSI, ZODIAC and MICHELE as trademarks on online e-commerce sites. This filing may also contain other trademarks, service marks, trade names and copyrights of ours or of other companies with whom we have, for example, licensing agreements to produce, market and distribute products. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to or incorporated by reference into this report may be listed without the TM, SM, © and ® symbols, as applicable, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors, if any, to these trademarks, service marks, trade names and copyrights.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

FOSSIL GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED

IN THOUSANDS


	July 5, 2025		December 28, 2024
Assets
Current assets:
Cash and cash equivalents	$	109,862	$	123,598
Accounts receivable - net of allowances for doubtful accounts of $14,232 and $14,656, respectively	122,179		162,164
Inventories	178,145		178,576
Prepaid expenses and other current assets	83,382		90,177
Total current assets	493,568		554,515
Property, plant and equipment - net of accumulated depreciation of $343,589 and $339,050, respectively	38,333		41,568
Operating lease right-of-use assets	122,054		121,389

Intangible and other assets-net	50,559		46,095
Total long-term assets	210,946		209,052
Total assets	$	704,514	$	763,567
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	122,871	$	157,636
Short-term debt	13,388		2,170
Accrued expenses:
Current operating lease liabilities	33,890		37,327
Compensation	35,343		43,426
Royalties	7,755		16,893
Customer liabilities	23,660		29,830
Transaction taxes	3,627		11,315
Other	15,924		20,208
Income taxes payable	13,309		7,765
Total current liabilities	269,767		326,570
Long-term income taxes payable	4,856		5,423
Deferred income tax liabilities	1,141		1,033
Long-term debt	165,615		162,674
Long-term operating lease liabilities	111,499		113,658
Other long-term liabilities	17,725		17,485
Total long-term liabilities	300,836		300,273
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, 53,785 and 53,254 shares issued and outstanding at July 5, 2025 and December 28, 2024, respectively	538		533
Additional paid-in capital	316,146		315,042
Retained (deficit) earnings	(104,138)		(84,268)
Accumulated other comprehensive income (loss)	(62,276)		(82,604)
Total Fossil Group, Inc. stockholders’ equity	150,270		148,703
Noncontrolling interests	(16,359)		(11,979)
Total stockholders’ equity	133,911		136,724
Total liabilities and stockholders’ equity	$	704,514	$	763,567

See notes to the unaudited condensed consolidated financial statements.

FOSSIL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

UNAUDITED

IN THOUSANDS, EXCEPT PER SHARE DATA


	For the 13 Weeks Ended July 5, 2025		For the 13 Weeks Ended June 29, 2024		For the 27 Weeks Ended July 5, 2025		For the 26 Weeks Ended June 29, 2024
Net sales	$	220,388	$	259,991	$	453,681	$	514,874
Cost of sales	93,659		123,140		183,960		244,531
Gross profit	126,729		136,851		269,721		270,343
Operating expenses:
Selling, general and administrative expenses	110,946		153,604		244,784		305,876

Other long-lived asset impairments	—		577		79		950
Restructuring expenses	7,295		16,673		23,116		26,726
Total operating expenses	118,241		170,854		267,979		333,552
Operating income (loss)	8,488		(34,003)		1,742		(63,209)
Interest expense	4,321		4,082		8,788		9,194
Other income (expense) - net	(38)		1,450		(3,307)		5,338
Income (loss) before income taxes	4,129		(36,635)		(10,353)		(67,065)
Provision (benefit) for income taxes	6,230		2,208		9,598		(3,908)
Net income (loss)	(2,101)		(38,843)		(19,951)		(63,157)
Less: Net income (loss) attributable to noncontrolling interests	193		(58)		(81)		(76)
Net income (loss) attributable to Fossil Group, Inc.	$	(2,294)	$	(38,785)	$	(19,870)	$	(63,081)
Other comprehensive income (loss), net of taxes:
Currency translation adjustment	$	11,511	$	(1,631)	$	20,802	$	(4,117)
Cash flow hedges - net change	—		107		(474)		753
Pension plan activity	—		—		—		(19)
Total other comprehensive income (loss)	11,511		(1,524)		20,328		(3,383)
Total comprehensive income (loss)	9,410		(40,367)		377		(66,540)
Less: Comprehensive income (loss) attributable to noncontrolling interests	193		(58)		(81)		(76)
Comprehensive income (loss) attributable to Fossil Group, Inc.	$	9,217	$	(40,309)	$	458	$	(66,464)
Earnings (loss) per share:
Basic	$	(0.04)	$	(0.73)	$	(0.37)	$	(1.20)
Diluted	$	(0.04)	$	(0.73)	$	(0.37)	$	(1.20)
Weighted average common shares outstanding:
Basic	53,624		52,927		53,435		52,709
Diluted	53,624		52,927		53,435		52,709

See notes to the unaudited condensed consolidated financial statements.

FOSSIL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

UNAUDITED

IN THOUSANDS


For the 13 Weeks Ended July 5, 2025
	Common stock			Additional paid-in capital		Treasury stock		Retained (deficit) earnings		Accumulated other comprehensive income (loss)		Stockholders' equity attributable to Fossil Group, Inc.		Noncontrolling interest		Total stockholders' equity
	Shares	Par value
Balance, April 5, 2025	53,271	$	533	$	315,680	$	—	$	(101,844)	$	(73,787)	$	140,582	$	(16,173)	$	124,409
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units	647	6		(6)		—		—		—		—		—		—

Acquisition of common stock for employee tax withholding	—	—		—		(129)		—		—		(129)		—		(129)
Retirement of common stock	(133)	(1)		(128)		129		—		—		—		—		—


Stock-based compensation	—	—		600		—		—		—		600		—		600
Net income (loss)	—	—		—		—		(2,294)		—		(2,294)		193		(2,101)
Other comprehensive income (loss)	—	—		—		—		—		11,511		11,511		—		11,511

Distribution of noncontrolling interest earnings	—	—		—		—		—		—		—		(379)		(379)


Balance, July 5, 2025	53,785	$	538	$	316,146	$	—	$	(104,138)	$	(62,276)	$	150,270	$	(16,359)	$	133,911


For the 13 Weeks Ended June 29, 2024
	Common stock			Additional paid-in capital		Treasury stock		Retained (deficit) earnings		Accumulated other comprehensive income (loss)		Stockholders' equity attributable to Fossil Group, Inc.		Noncontrolling interest		Total stockholders' equity
	Shares	Par value
Balance, March 30, 2024	52,492	$	525	$	312,717	$	—	$	(5,893)	$	(78,264)	$	229,085	$	(2,512)	$	226,573
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units	730	7		(7)		—		—		—		—		—		—

Acquisition of common stock for employee tax withholding	—	—		—		(108)		—		—		(108)		—		(108)
Retirement of common stock	(123)	(1)		(107)		108		—		—		—		—		—


Stock-based compensation	—	—		978		—		—		—		978		—		978
Net income (loss)	—	—		—		—		(38,785)		—		(38,785)		(58)		(38,843)
Other comprehensive income (loss)	—	—		—		—		—		(1,524)		(1,524)		—		(1,524)



Balance, June 29, 2024	53,099	$	531	$	313,581	$	—	$	(44,678)	$	(79,788)	$	189,646	$	(2,570)	$	187,076



For the 27 Weeks Ended July 5, 2025
	Common stock			Additional paid-in capital		Treasury stock		Retained (deficit) earnings		Accumulated other comprehensive income (loss)		Stockholders' equity attributable to Fossil Group, Inc.		Noncontrolling interest		Total stockholders' equity
	Shares	Par value
Balance, December 28, 2024	53,254	$	533	$	315,042	$	—	$	(84,268)	$	(82,604)	$	148,703	$	(11,979)	$	136,724
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units	666	6		(6)		—		—		—		—		—		—

Acquisition of common stock for employee tax withholding	—	—		—		(133)		—		—		(133)		—		(133)
Retirement of common stock	(135)	(1)		(132)		133		—		—		—		—		—


Stock-based compensation	—	—		1,242		—		—		—		1,242		—		1,242
Net income (loss)	—	—		—		—		(19,870)		—		(19,870)		(81)		(19,951)
Other comprehensive income (loss)	—	—		—		—		—		20,328		20,328				20,328

Distribution of noncontrolling interest earnings	—	—		—		—		—		—		—		(4,299)		(4,299)


Balance, July 5, 2025	53,785	$	538	$	316,146	$	—	$	(104,138)	$	(62,276)	$	150,270	$	(16,359)	$	133,911



For the 26 Weeks Ended June 29, 2024
	Common stock			Additional paid-in capital		Treasury stock		Retained (deficit) earnings		Accumulated other comprehensive income (loss)		Stockholders' equity attributable to Fossil Group, Inc.		Noncontrolling interest		Total stockholders' equity
	Shares	Par value
Balance, December 30, 2023	52,487	$	525	$	311,709	$	—	$	18,403	$	(76,405)	$	254,232	$	(2,494)	$	251,738
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units	737	7		(7)		—		—		—		—		—		—

Acquisition of common stock	—	—		—		(111)		—		—		(111)		—		(111)
Retirement of common stock	(125)	(1)		(110)		111		—		—		—		—		—

Stock-based compensation	—	—		1,989		—		—		—		1,989		—		1,989
Net income (loss)	—	—		—		—		(63,081)		—		(63,081)		(76)		(63,157)
Other comprehensive income (loss)	—	—		—		—		—		(3,383)		(3,383)		—		(3,383)



Balance, June 29, 2024	53,099	$	531	$	313,581	$	—	$	(44,678)	$	(79,788)	$	189,646	$	(2,570)	$	187,076

See notes to the unaudited condensed consolidated financial statements.

FOSSIL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

IN THOUSANDS


	For the 27 Weeks Ended July 5, 2025		For the 26 Weeks Ended June 29, 2024
Operating Activities:
Net income (loss)	$	(19,951)	$	(63,157)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion	6,412		8,407
Non-cash lease expense	28,656		33,154
Stock-based compensation	1,193		1,625
Decrease in allowance for returns and markdowns	(6,489)		(8,867)
Net gain on disposal of assets	(12,502)		(612)
Property, plant and equipment and other long-lived asset impairment losses	79		950

Non-cash restructuring charges	59		501
Bad debt expense	(8)		4,404

Other non-cash items	514		1,365


Changes in operating assets and liabilities:
Accounts receivable	47,676		48,846
Inventories	9,132		45,825
Prepaid expenses and other current assets	(959)		50,514
Accounts payable	(38,543)		(12,543)
Accrued expenses	(35,412)		(24,330)
Income taxes	4,479		(8,278)
Operating lease liabilities	(35,269)		(38,818)
Net cash (used in) provided by operating activities	(50,933)		38,986
Investing Activities:
Additions to property, plant and equipment	(1,089)		(3,430)
Decrease in intangible and other assets	610		335
Proceeds from the sale of property, plant and equipment	21,416		7

Net cash provided by (used in) investing activities	20,937		(3,088)
Financing Activities:

Acquisition of common stock	(132)		(111)
Distribution of noncontrolling interest earnings	(4,299)		—
Debt borrowings	75,816		33,781
Debt payments	(62,676)		(82,724)
Payment for shares of Fossil Accessories South Africa Pty. Ltd.	—		(422)

Net cash provided by (used in) financing activities	8,709		(49,476)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	8,084		1,076
Net decrease in cash, cash equivalents, and restricted cash	(13,203)		(12,502)
Cash, cash equivalents, and restricted cash:
Beginning of period	126,592		121,583
End of period	$	113,389	$	109,081

See notes to the unaudited condensed consolidated financial statements.

FOSSIL GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

UNAUDITED

1. FINANCIAL STATEMENT POLICIES

Basis of Presentation. The condensed consolidated financial statements include the accounts of Fossil Group, Inc., a Delaware corporation, and its wholly and majority-owned subsidiaries (the “Company”).

The Company’s fiscal year periodically results in a 53-week year instead of a normal 52-week year. The current fiscal year ending January 3, 2026 is a 53-week year, with the additional week being included in the first quarter. The information presented herein includes the thirteen-week period ended July 5, 2025 (“Second Quarter”) as compared to the thirteen-week period ended June 29, 2024 (“Prior Year Quarter”), and the twenty-seven week period ended July 5, 2025 ("Year To Date Period") as compared to the twenty-six week period ended June 29, 2024 ("Prior Year YTD Period"). The condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s financial position as of July 5, 2025, and the results of operations for the Second Quarter, Prior Year Quarter, Year To Date Period and Prior Year YTD Period. All adjustments are of a normal, recurring nature.

These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K filed by the Company pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the fiscal year ended December 28, 2024, as amended (the “2024 Form 10-K”). Operating results for the Second Quarter are not necessarily indicative of the results to be achieved for the full fiscal year.

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods reported. We base our estimates on the information available at the time and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. The Company has not made any changes in its significant accounting policies from those disclosed in the 2024 Form 10-K.

Business. The Company is a global design, marketing and distribution company that specializes in consumer fashion accessories. Its principal offerings include an extensive line of men's and women's fashion watches and jewelry, handbags, small leather goods, belts and sunglasses. In the watch and jewelry product categories, the Company has a diverse portfolio of globally recognized owned and licensed brand names under which its products are marketed. The Company's products are distributed globally through various distribution channels, including wholesale in countries where it has a physical presence, direct to the consumer through its retail stores and commercial websites and through third-party distributors in countries where the Company does not maintain a physical presence. The Company's products are offered at varying price points to meet the needs of its customers, whether they are value-conscious or luxury oriented. Based on its extensive range of accessory products, brands, distribution channels and price points, the Company is able to target style-conscious consumers across a wide age spectrum on a global basis.

Operating Expenses. Operating expenses include selling, general and administrative ("SG&A"), other long-lived asset impairments and restructuring charges. SG&A expenses include selling and distribution expenses primarily consisting of sales and distribution labor costs, sales distribution center and warehouse facility costs, depreciation expense related to sales distribution and warehouse facilities, the four-wall operating costs of the Company's retail stores, point-of-sale expenses, advertising expenses and art, and design and product development labor costs. SG&A also includes general and administrative expenses primarily consisting of administrative support labor and support costs such as treasury, legal, information services, accounting, internal audit, human resources, executive management costs and costs associated with stock-based compensation. Restructuring charges include costs to reduce and optimize the Company’s infrastructure and store closures. See Note 16— Restructuring for additional information on the Company’s restructuring plan.

Earnings (Loss) Per Share (“EPS”). Basic EPS is based on the weighted average number of common shares outstanding during each period. Diluted EPS adjusts basic EPS for the effects of dilutive common stock equivalents outstanding during each period using the treasury stock method.

The following table reconciles the numerators and denominators used in the computations of both basic and diluted EPS (in thousands, except per share data):


	For the 13 Weeks Ended July 5, 2025		For the 13 Weeks Ended June 29, 2024		For the 27 Weeks Ended July 5, 2025		For the 26 Weeks Ended June 29, 2024
Numerator:
Net income (loss) attributable to Fossil Group, Inc.	$	(2,294)	$	(38,785)	$	(19,870)	$	(63,081)
Denominator:
Basic EPS computation:
Basic weighted average common shares outstanding	53,624		52,927		53,435		52,709
Basic EPS	$	(0.04)	$	(0.73)	$	(0.37)	$	(1.20)
Diluted EPS computation:

Diluted weighted average common shares outstanding	53,624		52,927		53,435		52,709
Diluted EPS	$	(0.04)	$	(0.73)	$	(0.37)	$	(1.20)

At the end of the Second Quarter and Year To Date Period, approximately 4.0 million and 3.4 million weighted average shares issuable under stock-based awards, respectively, were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 1.2 million and 0.6 million weighted average performance-based shares at the end of the Second Quarter and Year To Date Period, respectively.

At the end of the Prior Year Quarter and Prior Year YTD Period, approximately 1.6 million and 1.7 million weighted average shares issuable under stock-based awards, respectively, were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 0.2 million and 0.2 million weighted average performance-based shares at the end of the Prior Year Quarter and Prior Year YTD Period, respectively.

Cash, Cash Equivalents and Restricted Cash. Restricted cash included in intangible and other assets-net was comprised primarily of pledged collateral to secure bank guarantees for the purpose of obtaining retail space and restricted cash from receivables buyout facilities. The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of July 5, 2025 and June 29, 2024 that are presented in the condensed consolidated statement of cash flows (in thousands):


	July 5, 2025		June 29, 2024
Cash and cash equivalents	$	109,862	$	104,906
Restricted cash included in prepaid expenses and other current assets	1,267		625
Restricted cash included in intangible and other assets-net	2,260		3,550
Cash, cash equivalents and restricted cash	$	113,389	$	109,081

Recently Issued Accounting Standards

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU"), 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. This guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The adoption of this standard will result in additional disclosure in the notes to the financial statements.

The Organization for Economic Cooperation and Development ("OECD") and over 140 countries have agreed to enact a two-pillar solution to reform the international tax rules to address the challenges arising from the globalization and digitalization of the economy. "The Pillar Two Global Anti-Base Erosion (GloBE) Rules" provide a coordinated system to ensure that multinational enterprises with revenues above 750 million euro pay a minimum effective tax rate of 15% tax on the income arising in each of the jurisdictions in which they operate. Many aspects of Pillar Two became effective for tax years beginning in January 2024, with certain remaining impacts to be effective in 2025. Each country must enact its own legislation to apply the Pillar Two rules. Since becoming effective, Pillar Two has not had a material impact on the Company's financial

results, including its annual estimated effective tax rate or liquidity. The Company will continue to monitor future developments in 2025.

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 in the first quarter of fiscal year 2025 on a prospective basis. The adoption of the updated guidance will result in additional disaggregation of certain tax information within the Company's income tax footnote disclosure in its Annual Report on Form 10-K.

2. REVENUE

Disaggregation of Revenue. The Company's revenue disaggregated by major product category and timing of revenue recognition was as follows (in thousands):


	For the 13 Weeks Ended July 5, 2025
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	77,183	$	52,630	$	48,633	$	—	$	178,446
Smartwatches	1,716		159		(475)		—		1,400
Total watches	$	78,899	$	52,789	$	48,158	$	—	$	179,846
Leathers	10,727		2,110		4,110		—		16,947
Jewelry	4,456		10,425		4,509		—		19,390
Other	1,669		1,845		638		53		4,205
Consolidated	$	95,751	$	67,169	$	57,415	$	53	$	220,388

Timing of revenue recognition
Revenue recognized at a point in time	$	95,703	$	67,092	$	57,357	$	53	$	220,205
Revenue recognized over time	48		77		58		—		183
Consolidated	$	95,751	$	67,169	$	57,415	$	53	$	220,388


	For the 13 Weeks Ended June 29, 2024
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	87,945	$	55,624	$	50,519	$	—	$	194,088
Smartwatches	5,526		538		2,328		—		8,392
Total watches	$	93,471	$	56,162	$	52,847	$	—	$	202,480
Leathers	18,151		3,738		5,277		—		27,166
Jewelry	5,526		12,211		6,462		—		24,199
Other	2,436		2,741		613		356		6,146
Consolidated	$	119,584	$	74,852	$	65,199	$	356	$	259,991

Timing of revenue recognition
Revenue recognized at a point in time	$	119,484	$	74,703	$	65,087	$	356	$	259,630
Revenue recognized over time	100		149		112		—		361
Consolidated	$	119,584	$	74,852	$	65,199	$	356	$	259,991


	For the 27 Weeks Ended July 5, 2025
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	155,178	$	112,823	$	95,075	$	—	$	363,076
Smartwatches	4,655		992		(201)		—		5,446
Total watches	$	159,833	$	113,815	$	94,874	$	—	$	368,522
Leathers	20,469		4,336		9,322		—		34,127
Jewelry	9,808		22,628		9,216		—		41,652
Other	3,370		3,723		1,348		939		9,380
Consolidated	$	193,480	$	144,502	$	114,760	$	939	$	453,681

Timing of revenue recognition
Revenue recognized at a point in time	$	193,372	$	144,340	$	114,626	$	939	$	453,277
Revenue recognized over time	108		162		134		—		404
Consolidated	$	193,480	$	144,502	$	114,760	$	939	$	453,681


	For the 26 Weeks Ended June 29, 2024
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	166,650	$	112,757	$	101,242	$	—	$	380,649
Smartwatches	10,680		2,099		4,490		—		17,269
Total watches	$	177,330	$	114,856	$	105,732	$	—	$	397,918
Leathers	35,670		8,143		10,936		—		54,749
Jewelry	12,146		25,689		12,628		—		50,463
Other	4,455		4,884		1,440		965		11,744
Consolidated	$	229,601	$	153,572	$	130,736	$	965	$	514,874

Timing of revenue recognition
Revenue recognized at a point in time	$	229,393	$	153,263	$	130,511	$	965	$	514,132
Revenue recognized over time	208		309		225		—		742
Consolidated	$	229,601	$	153,572	$	130,736	$	965	$	514,874

Contract Balances. As of July 5, 2025, the Company had no material contract assets on the Company's condensed consolidated balance sheets and no deferred contract costs. The Company had contract liabilities of $0.4 million and $0.7 million as of July 5, 2025 and December 28, 2024, respectively, primarily related to remaining performance obligations on wearable technology products and $1.7 million and $2.1 million as of July 5, 2025 and December 28, 2024, respectively, related to gift cards issued.

3. INVENTORIES

Inventories consisted of the following (in thousands):


	July 5, 2025		December 28, 2024
Components and parts	$	12,222	$	12,322

Finished goods	165,923		166,254
Inventories	$	178,145	$	178,576

4. WARRANTY LIABILITIES

The Company’s warranty liability is recorded in accrued expenses-other in the Company’s condensed consolidated balance sheets. Warranty liability activity consisted of the following (in thousands):


	For the 27 Weeks Ended July 5, 2025		For the 26 Weeks Ended June 29, 2024
Beginning balance	$	6,113	$	10,122
Settlements in cash or kind	(2,066)		(2,390)
Warranties issued and adjustments to preexisting warranties (1)	867		35
Ending balance	$	4,914	$	7,767

_______________________________________________

(1) Changes in cost estimates related to preexisting warranties are aggregated with accruals for new standard warranties issued and foreign currency changes.

5. INCOME TAXES

The Company’s income tax (benefit) expense and related effective rates were as follows (in thousands, except percentage data):


	For the 13 Weeks Ended July 5, 2025			For the 13 Weeks Ended June 29, 2024			For the 27 Weeks Ended July 5, 2025			For the 26 Weeks Ended June 29, 2024
Income tax (benefit) expense	$	6,230		$	2,208		$	9,598		$	(3,908)
Effective tax rate	150.9		%	(6.0)		%	(92.7)		%	5.8		%

The effective tax rate in the Second Quarter differed from the Prior Year Quarter primarily due to a change in the Company’s global mix of earnings. In addition, income taxes were accrued on certain income in foreign jurisdictions and no tax benefit has been accrued on the U.S. tax losses and on certain losses in other foreign jurisdictions due to valuation allowances previously recorded. The effective tax rate can also vary from quarter-to-quarter due to changes in the resolution of income tax audits, changes in uncertain tax positions, and changes in tax law.

On July 4, 2025, the United States Congress passed the budget reconciliation bill H.R. 1, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent many of the provisions previously enacted as part of the 2017 Tax Cut and Jobs Act that were set to expire at the end of 2025 and includes other changes to certain U.S. corporate tax provisions. The changes to U.S. tax law that were enacted under the OBBBA include modifications to capitalization of research and development expenses, limitations on deductions for interest expense and accelerated fixed asset depreciation. Based on our current U.S. tax position, we note no material tax impacts as a result of the changes introduced under the OBBBA.

As of July 5, 2025, the Company's total amount of unrecognized tax benefits, excluding interest and penalties, was $6.3 million, all of which would favorably impact the effective tax rate in future periods, if recognized. The Company released corresponding uncertain tax positions of $1.0 million in the first quarter of 2025. It is reasonably expected that certain uncertain tax positions will be resolved within the next 12 month period, and if resolved favorably, it would impact the tax rate by a benefit of approximately $3.1 million, including interest.

The Company is also subject to examinations in various state and foreign jurisdictions for its 2013-2024 tax years, none of which the Company believes are significant, individually or in the aggregate. Tax audit outcomes and timing of tax audit settlements are subject to significant uncertainty.

The Company has classified uncertain tax positions as long-term income taxes payable, unless such amounts are expected to be settled within twelve months of the condensed consolidated balance sheet date. As of July 5, 2025, the Company has not recorded any new unrecognized tax benefits, excluding interest and penalties, for positions that are expected to be settled within the next twelve months. Consistent with its past practice, the Company recognizes interest and/or penalties related to income tax overpayments and income tax underpayments in income tax expense and income taxes receivable/payable. At July 5, 2025, the total amount of accrued income tax-related interest expense, net included in the condensed consolidated balance sheets was $1.4 million. There were no accrued tax-related penalties.

6. STOCKHOLDERS’ EQUITY

Common and Preferred Stock. The Company has 100,000,000 shares of common stock, par value $0.01 per share, ("Common Stock") authorized, with 53,785,063 and 53,253,974 shares issued and outstanding at July 5, 2025 and December 28, 2024, respectively. The Company has 1,000,000 shares of preferred stock, par value $0.01 per share, authorized, with none issued or outstanding at July 5, 2025 or December 28, 2024. Rights, preferences and other terms of preferred stock will be determined by the Board of Directors at the time of issuance.

Common Stock Repurchase Programs. Purchases of the Company’s common stock are made from time to time pursuant to its repurchase programs, subject to market conditions and at prevailing market prices, through the open market. Repurchased shares of common stock are recorded at cost and become authorized but unissued shares which may be issued in the future for general corporate or other purposes. The Company may terminate or limit its stock repurchase program at any time. In the event the repurchased shares are cancelled, the Company accounts for retirements by allocating the repurchase price to common stock, additional paid-in capital and retained (deficit) earnings. The repurchase price allocation is based upon the equity contribution associated with historical issuances. The repurchase programs are conducted pursuant to Rule 10b-18 of the Exchange Act.

At July 5, 2025 and December 28, 2024, all treasury stock had been effectively retired. As of July 5, 2025, the Company had $20.0 million of repurchase authorizations remaining under its repurchase program. The Company did not

repurchase any common stock under its authorized stock repurchase plans during the Second Quarter, Prior Year Quarter, Year To Date Period or Prior Year YTD Period.

7. EMPLOYEE BENEFIT PLANS

Restricted Stock Units and Performance Restricted Stock Units. The following table summarizes restricted stock unit and performance restricted stock unit activity during the Second Quarter:


Restricted Stock Units and Performance Restricted Stock Units	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
	(in Thousands)
Nonvested at April 5, 2025	3,176	$	1.86
Granted	1,686	0.98
Vested	(680)	3.39
Forfeited	(136)	2.39
Nonvested at July 5, 2025	4,046	$	1.13

The total fair value of restricted stock units vested was $0.6 million during the Second Quarter. Vesting of performance restricted stock units is based on the Company's stock market performance.

Long-Term Incentive Plans. On April 29, 2024, the Company's Board of Directors adopted the 2024 Long-Term Incentive Plan ("2024 Plan"), which was approved by the Company’s stockholders at the Company’s Annual Shareholder Meeting on June 21, 2024. The 2024 Plan replaces and supersedes the previously adopted 2016 Long-Term Incentive Plan. An aggregate of 7,000,000 shares of the Company's common stock were reserved for issuance pursuant to the Company's 2024 Plan.

Under the 2024 Plan, designated employees of the Company, including officers, certain contractors, and non-employee directors of the Company, are eligible to receive (i) stock options, (ii) stock appreciation rights, (iii) restricted or non-restricted stock awards, (iv) restricted stock units, (v) performance awards, (vi) cash awards, or (vii) any combination of the foregoing. The 2024 Plan is administered by The Compensation and Talent Management Committee (the "Compensation Committee"). Each award issued under the 2024 Plan terminates at the time designated by the Compensation Committee, not to exceed ten years from the date of grant. The current outstanding stock options, stock appreciation rights, performance stock appreciation rights, restricted stock, restricted stock units and performance restricted stock units issued under the 2024 Plan predominantly have original vesting periods of three years. Time-based or performance-based stock appreciation rights and restricted stock units are predominately settled in shares of the Company's common stock. On the date of the Company’s annual stockholders meeting, each non-employee director is eligible to receive a grant of restricted stock units, in an amount determined by the Board, in its sole discretion, provided that the grant shall not exceed more than the number of shares of Common Stock having an aggregate fair market value of $130,000. Any such grant shall vest 100% on the earlier of one year from the date of grant or the date of the Company's next annual stockholders meeting, provided such director is providing services to the Company or a subsidiary of the Company on that date.

Inducement Grants. On September 1, 2024, the Company's Board of Directors approved the grant of an employee inducement award consisting of 1,500,000 restricted stock units to the new Chief Executive Officer, Franco Fogliato. The restricted stock units vest 50% on October 15, 2025 and 50% on October 15, 2026, subject to Mr. Fogliato's continuous employment with the Company on each vesting date.

During the Year To Date Period, the Company's Board of Directors approved the following grants of employee inducement awards: 150,000 shares of restricted stock to the new Chief Financial Officer, Randy Greben, 129,581 shares of restricted stock to the new Chief Commercial Officer, Joseph Martin, 125,000 shares of restricted stock to the new Chief Supply Chain Officer, Laks Lakshmanan and 100,000 shares of restricted stock units to the new Chief Digital Information Officer, Antonio Carriero. Each of these grants have a three year vesting schedule, subject to such employees continuous employment with the Company on each vesting date.

8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables disclose changes in the balances of each component of accumulated other comprehensive income (loss), net of taxes (in thousands):


	For the 13 Weeks Ended July 5, 2025
	Currency Translation Adjustments		Cash Flow Hedges
			Forward Contracts		Pension Plan		Total
Beginning balance	$	(79,393)	$	1,338	$	4,268	$	(73,787)
Other comprehensive income (loss) before reclassifications	11,511		—		—		11,511

Amounts reclassed from accumulated other comprehensive income (loss)	—		—		—		—

Total other comprehensive income (loss)	11,511		—		—		11,511
Ending balance	$	(67,882)	$	1,338	$	4,268	$	(62,276)


	For the 13 Weeks Ended June 29, 2024
	Currency Translation Adjustments		Cash Flow Hedges
			Forward Contracts		Pension Plan		Total
Beginning balance	$	(86,392)	$	2,334	$	5,794	$	(78,264)
Other comprehensive income (loss) before reclassifications	(1,631)		376		—		(1,255)
Tax (expense) benefit	—		(6)		—		(6)
Amounts reclassed from accumulated other comprehensive income (loss)	—		202		—		202
Tax (expense) benefit	—		61		—		61
Total other comprehensive income (loss)	(1,631)		107		—		(1,524)
Ending balance	$	(88,023)	$	2,441	$	5,794	$	(79,788)



	For the 27 Weeks Ended July 5, 2025
	Currency Translation Adjustments		Cash Flow Hedges
			Forward Contracts		Pension Plan		Total
Beginning balance	$	(88,684)	$	1,812	$	4,268	$	(82,604)
Other comprehensive income (loss) before reclassifications	20,802		140		—		20,942

Amounts reclassed from accumulated other comprehensive income	—		614		—		614

Total other comprehensive income (loss)	20,802		(474)		—		20,328
Ending balance	$	(67,882)	$	1,338	$	4,268	$	(62,276)



	For the 26 Weeks Ended June 29, 2024
	Currency Translation Adjustments		Cash Flow Hedges
			Forward Contracts		Pension Plan		Total
Beginning balance	$	(83,906)	$	1,688	$	5,813	$	(76,405)
Other comprehensive income (loss) before reclassifications	(4,117)		1,050		(19)		(3,086)
Tax (expense) benefit	—		70		—		70
Amounts reclassed from accumulated other comprehensive income (loss)	—		232		—		232
Tax (expense) benefit	—		135		—		135
Total other comprehensive income (loss)	(4,117)		753		(19)		(3,383)
Ending balance	$	(88,023)	$	2,441	$	5,794	$	(79,788)

See Note—10 Derivatives and Risk Management for additional disclosures about the Company’s use of derivatives.

9. SEGMENT INFORMATION

The Company reports segment information based on the “management approach.” The management approach designates the internal reporting used by management, specifically its chief operating decision maker ("CODM") for making decisions and assessing performance as the source of the Company's reportable segments. The Company's CODM is its Chief Executive Officer.

The Company manages its business primarily on a geographic basis. The Company’s reportable operating segments are comprised of (i) Americas, (ii) Europe and (iii) Asia. Each reportable operating segment includes sales to wholesale and distributor customers, and sales through Company-owned retail stores and e-commerce activities based on the location of the selling entity. The Americas segment primarily includes sales to customers based in Canada, Latin America and the United States. The Europe segment primarily includes sales to customers based in European countries, the Middle East and Africa. The Asia segment primarily includes sales to customers based in Australia, greater China (including mainland China, Hong Kong,

Macau and Taiwan), India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea and Thailand. Each reportable operating segment provides similar products and services.

The Company evaluates the performance of its reportable segments based on net sales and operating income (loss). Net sales for geographic segments are based on the location of the selling entity. Operating income (loss) for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributable to the segment. Corporate includes peripheral revenue generating activities from factories and intellectual property and general corporate expenses, including certain administrative, legal, accounting, technology support costs, equity compensation costs, payroll costs attributable to executive management, brand management, product development, art, creative/product design, marketing, strategy, compliance and back office supply chain expenses that are not allocated to the various segments because they are managed at the corporate level internally. The Company does not include intercompany transfers between segments for management reporting purposes.

The CODM uses net sales and operating income for each segment predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis for both performance measures when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses segment gross profit for evaluating pricing strategy and segment operating income to assess the performance of each segment by comparing the results of each segment with one another. The CODM does not review disaggregated assets by segment, therefore it is not presented below.

Summary information by operating segment was as follows (in thousands):


	For the 13 Weeks Ended July 5, 2025
	Americas		Europe		Asia		Corporate		Total
Net sales	$	95,751	$	67,169	$	57,415	$	53	$	220,388
Cost of sales	44,955		25,887		22,831		(14)		93,659
Gross profit	$	50,796	$	41,282	$	34,584	$	67	$	126,729
Marketing	4,143		3,170		3,210		507		11,030
Compensation and benefits	14,507		18,833		8,394		26,603		68,337
Depreciation and amortization	689		671		386		1,148		2,894
Other segment items (1)	12,525		(4,817)		7,893		20,379		35,980
Operating income	$	18,932	$	23,425	$	14,701	$	(48,570)	$	8,488


	For the 13 Weeks Ended June 29, 2024
	Americas		Europe		Asia		Corporate		Total
Net sales	$	119,584	$	74,852	$	65,199	$	356	$	259,991
Cost of sales	58,654		32,187		32,236		63		123,140
Gross profit	$	60,930	$	42,665	$	32,963	$	293	$	136,851
Marketing	12,708		5,678		6,346		1,026		25,758
Compensation and benefits	16,454		17,370		8,848		29,186		71,858
Depreciation and amortization	928		809		572		1,580		3,889
Other segment items (1)	16,236		8,850		11,173		33,090		69,349
Operating income	$	14,604	$	9,958	$	6,024	$	(64,589)	$	(34,003)


	For the 27 Weeks Ended July 5, 2025
	Americas		Europe		Asia		Corporate		Total
Net sales	$	193,480	$	144,502	$	114,760	$	939	$	453,681
Cost of sales	85,975		55,089		42,739		157		183,960
Gross profit	$	107,505	$	89,413	$	72,021	$	782	$	269,721
Marketing	8,189		6,920		7,252		1,915		24,276
Compensation and benefits	30,059		36,708		17,118		58,144		142,029
Depreciation and amortization	1,419		1,488		1,001		2,355		6,263
Other segment items (1)	24,676		4,118		16,690		49,927		95,411
Operating income	$	43,162	$	40,179	$	29,960	$	(111,559)	$	1,742


	For the 26 Weeks Ended June 29, 2024
	Americas		Europe		Asia		Corporate		Total
Net sales	$	229,601	$	153,572	$	130,736	$	965	$	514,874
Cost of sales	116,554		64,390		63,496		91		244,531
Gross profit	$	113,047	$	89,182	$	67,240	$	874	$	270,343
Marketing	21,709		9,997		13,390		1,883		46,979
Compensation and benefits	33,684		39,290		18,399		58,810		150,183
Depreciation and amortization	2,154		1,864		1,098		3,189		8,305
Other segment items (1)	32,141		20,679		22,527		52,738		128,085
Operating income	$	23,359	$	17,352	$	11,826	$	(115,746)	$	(63,209)

(1) Other segment items for each reportable segment include long-lived asset impairments, restructuring charges, facility costs, overhead expenses, fixed asset disposals and other operating costs.

The following table reflects net sales for each class of similar products in the periods presented (in thousands, except percentage data):


	For the 13 Weeks Ended July 5, 2025				For the 13 Weeks Ended June 29, 2024
	Net Sales		Percentage of Total		Net Sales		Percentage of Total
Watches:
Traditional watches	$	178,446	81.0	%	$	194,088	74.7	%
Smartwatches	1,400		0.6		8,392		3.2
Total watches	$	179,846	81.6	%	$	202,480	77.9	%
Leathers	16,947		7.7		27,166		10.4
Jewelry	19,390		8.8		24,199		9.3
Other	4,205		1.9		6,146		2.4
Total	$	220,388	100.0	%	$	259,991	100.0	%


	For the 27 Weeks Ended July 5, 2025				For the 26 Weeks Ended June 29, 2024
	Net Sales		Percentage of Total		Net Sales		Percentage of Total
Watches:
Traditional watches	$	363,076	80.0	%	$	380,649	73.9	%
Smartwatches	5,446		1.2		17,269		3.4
Total watches	$	368,522	81.2	%	$	397,918	77.3	%
Leathers	34,127		7.5		54,749		10.6
Jewelry	41,652		9.2		50,463		9.8
Other	9,380		2.1		11,744		2.3
Total	$	453,681	100.0	%	$	514,874	100.0	%

10. DERIVATIVES AND RISK MANAGEMENT

Cash Flow Hedges. Historically, the Company entered into forward contracts to manage the risk of fluctuations in global currencies that were ultimately used by non-U.S. dollar functional currency subsidiaries to settle payments of intercompany inventory transactions denominated in U.S. dollars and fluctuations in Japanese yen exchange rates that were used to settle third-party inventory component purchases by a U.S. dollar functional currency subsidiary. Forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon settlement date and exchange rate. These forward contracts were designated as single cash flow hedges. Fluctuations in exchange rates will either increase or decrease the Company’s U.S. dollar equivalent cash flows from these inventory transactions, which will affect the Company’s U.S. dollar earnings. Gains or losses on the forward contracts were expected to offset these fluctuations to the extent the cash flows were hedged by the forward contracts.

For a derivative instrument that is designated and qualifies as a cash flow hedge, the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (loss), net of taxes and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

As of July 5, 2025, the Company had no outstanding forward contracts designated as cash flow hedges. As of December 28, 2024, the fair value amount on a gross basis for the Company’s derivative instruments was $0.6 million and was included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Hedges. The Company also periodically enters into forward contracts to manage exchange rate risks associated with certain intercompany transactions and for which the Company does not elect hedge accounting treatment. As of July 5, 2025, and December 28, 2024 the Company did not have any non-designated forward contracts outstanding. Changes in the fair value of derivatives not designated as hedging instruments are recognized in earnings when they occur.

The gains and losses on cash flow hedges that were recognized in other comprehensive income (loss), net of taxes are set forth below (in thousands):


	For the 13 Weeks Ended June 29, 2024
Cash flow hedges:
Forward contracts	$	370

Total gain (loss) recognized in other comprehensive income (loss), net of taxes	$	370


	For the 27 Weeks Ended July 5, 2025		For the 26 Weeks Ended June 29, 2024
Cash flow hedges:
Forward contracts	$	140	$	1,120

Total gain (loss) recognized in other comprehensive income (loss), net of taxes	$	140	$	1,120

The following tables disclose the gains and losses on derivative instruments recorded in accumulated other comprehensive income (loss), net of taxes during the term of the hedging relationship and reclassified into earnings, and gains and losses on derivatives not designated as hedging instruments recorded directly to earnings (in thousands):


Derivative Instruments	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location	Effect of Derivative Instruments	For the 13 Weeks Ended July 5, 2025		For the 13 Weeks Ended June 29, 2024
Forward contracts designated as cash flow hedging instruments	Cost of sales	Total gain (loss) reclassified from accumulated other comprehensive income (loss)	$	—	$	65
Forward contracts designated as cash flow hedging instruments	Other income (expense)-net	Total gain (loss) reclassified from accumulated other comprehensive income (loss)	$	—	$	198
Forward contracts not designated as hedging instruments	Other income (expense)-net	Total gain (loss) recognized in income	$	1	$	11


Derivative Instruments	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location	Effect of Derivative Instruments	For the 27 Weeks Ended July 5, 2025		For the 26 Weeks Ended June 29, 2024
Forward contracts designated as cash flow hedging instruments	Cost of sales	Total gain (loss) reclassified from accumulated other comprehensive income (loss)	$	—	$	(6)
Forward contracts designated as cash flow hedging instruments	Other income (expense)-net	Total gain (loss) reclassified from accumulated other comprehensive income (loss)	$	614	$	373
Forward contracts not designated as hedging instruments	Other income (expense)-net	Total gain (loss) recognized in income	$	19	$	16

The following tables summarize the effects of the Company's derivative instruments on earnings (in thousands):


	Effect of Derivative Instruments
	For the 13 Weeks Ended July 5, 2025				For the 13 Weeks Ended June 29, 2024
	Cost of Sales		Other Income (Expense)-net		Cost of Sales		Other Income (Expense)-net
Total amounts of income and expense line items presented in the condensed consolidated statements of income (loss) and comprehensive income (loss) in which the effects of cash flow hedges are recorded	$	93,659	$	(38)	$	123,140	$	1,450
Gain (loss) on cash flow hedging relationships:
Forward contracts designated as cash flow hedging instruments:
Total gain (loss) reclassified from other comprehensive income (loss)	$	—	$	—	$	65	$	198
Forward contracts not designated as hedging instruments:
Total gain (loss) recognized in income	$	—	$	1	$	—	$	11


	Effect of Derivative Instruments
	For the 27 Weeks Ended July 5, 2025				For the 26 Weeks Ended June 29, 2024
	Cost of Sales		Other Income (Expense)-net		Cost of Sales		Other Income (Expense)-net
Total amounts of income and expense line items presented in the condensed consolidated statements of income (loss) and comprehensive income (loss) in which the effects of cash flow hedges are recorded	$	183,960	$	(3,307)	$	244,531	$	5,338
Gain (loss) on cash flow hedging relationships:
Forward contracts designated as cash flow hedging instruments:
Total gain (loss) reclassified from other comprehensive income (loss)	$	—	$	614	$	(6)	$	373
Forward contracts not designated as hedging instruments:
Total gain (loss) recognized in income	$	—	$	19	$	—	$	16

11. FAIR VALUE MEASUREMENTS

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

ASC 820, Fair Value Measurement and Disclosures (“ASC 820”), establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

•Level 3 — Unobservable inputs based on the Company’s assumptions.

ASC 820 requires the use of observable market data if such data is available without undue cost and effort.

As of July 5, 2025 the Company did not have any assets or liabilities measured at fair value on a recurring basis.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 28, 2024 (in thousands):


	Fair Value at December 28, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Forward contracts	$	—	$	580	$	—	$	580



Total	$	—	$	580	$	—	$	580

The fair values of the Company’s forward contracts are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates. See Note 10—Derivatives and Risk Management, for additional disclosures about the forward contracts.

As of July 5, 2025, the Company's Notes (as defined in Note 15— Debt Activity), excluding unamortized debt issuance costs, were recorded at cost and had a carrying value of $150.0 million and had a fair value of approximately $103.1 million. The fair value of the Company's Notes was based on Level 1 inputs. The Company's Revolving Facility (as defined in Note 15—Debt Activity) was recorded at cost and had a carrying value of $18.0 million and a fair value of approximately $14.0 million. The fair value of the Company's Revolving Facility was based on Level 2 inputs.

During the Year to Date Period, operating lease right-of-use ("ROU") assets with a carrying amount of $0.2 million were written down to a fair value of $0.1 million, resulting in impairment charges of $0.1 million. During the Prior Year YTD Period, ROU assets with a carrying amount of $2.5 million and property, plant and equipment-net with a carrying value of $0.3 million were written down to a fair value of $1.7 million and $0.1 million, respectively, resulting in impairment charges of $1.0 million.

The fair values of operating lease ROU assets and fixed assets related to retail stores were determined using Level 3 inputs, including forecasted cash flows and discount rates. Of the $0.1 million impairment expense in the Year to Date Period, $0.1 million was recorded in other long-lived asset impairments in the Americas segment. Of the $1.0 million impairment expense in the Prior Year YTD Period, $0.8 million and $0.2 million was recorded in other long-lived asset impairments in the Asia and Europe segments, respectively.

12. INTANGIBLE AND OTHER ASSETS

The following table summarizes intangible and other assets (in thousands):


		July 5, 2025				December 28, 2024
	Useful	Gross		Accumulated		Gross		Accumulated
	Lives	Amount		Amortization		Amount		Amortization
Intangibles-subject to amortization:
Trademarks	10 yrs.	$	3,978	$	3,409	$	3,978	$	3,360

Patents	3 - 20 yrs.	850		582		850		571



Other	7 - 20 yrs.	341		295		340		275
Total intangibles-subject to amortization		5,169		4,286		5,168		4,206


Other assets:

Deposits		17,668				14,038

Deferred tax asset-net		25,603				23,857
Restricted cash		2,260				2,454





Debt issuance costs		1,831				1,854
Other		2,314				2,930
Total other assets		49,676				45,133
Total intangible and other assets		$	54,845	$	4,286	$	50,301	$	4,206
Total intangible and other assets-net				$	50,559			$	46,095

Amortization expense for intangible assets was $0.1 million and $0.2 million for the Second Quarter and the Prior Year Quarter, respectively, and $0.1 million and $0.5 million for the Year To Date Period and Prior Year YTD Period, respectively. Estimated aggregate future amortization expense by fiscal year for intangible assets is as follows (in thousands):


Fiscal Year	Amortization Expense
2025 (remaining)	$	116
2026	$	136
2027	$	116
2028	$	108
2029	$	82
Thereafter	$	325

13. COMMITMENTS AND CONTINGENCIES

Litigation. The Company is occasionally subject to litigation or other legal proceedings in the normal course of its business. The Company does not believe that the outcome of any currently pending legal matters, individually or collectively, will have a material effect on the business or financial condition of the Company.

14. LEASES

The Company's leases consist primarily of retail space, offices, warehouses, distribution centers, equipment and vehicles. The Company determines if an agreement contains a lease at inception based on the Company's right to the economic benefits of the leased assets and its right to direct the use of the leased asset. ROU assets represent the Company's right to use an underlying asset, and ROU liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at the commencement date adjusted for the lease term and lease country to determine the present value of the lease payments.

Some leases include one or more options to renew at the Company's discretion, with renewal terms that can extend the lease from approximately one to ten additional years. The renewal options are not included in the measurement of ROU assets and ROU liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Short-term leases are

leases having a term of twelve months or less at inception. The Company does not record a related lease asset or liability for short-term leases. The Company has certain leases containing lease and non-lease components which are accounted for as a single lease component. The Company has certain lease agreements where lease payments are based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The variable portion of these lease payments is not included in the Company's lease liabilities. The Company's lease agreements do not contain any significant restrictions or covenants other than those that are customary in such arrangements.

The components of lease expense were as follows (in thousands):


Lease Cost	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location	For the 13 Weeks Ended July 5, 2025		For the 13 Weeks Ended June 29, 2024		For the 27 Weeks Ended July 5, 2025		For the 26 Weeks Ended June 29, 2024
Operating lease cost(1)	SG&A	$	13,046	$	15,869	$	27,751	$	32,178



Short-term lease cost	SG&A	$	108	$	240	$	274	$	526
Variable lease cost	SG&A	$	5,162	$	5,285	$	8,963	$	10,638

_______________________________________________

(1) Includes sublease income, which was immaterial.

The following table discloses supplemental balance sheet information for the Company’s leases (in thousands):


Leases	Condensed Consolidated Balance Sheets Location	July 5, 2025		December 28, 2024
Assets
Operating	Operating lease ROU assets	$	122,054	$	121,389


Liabilities
Current:
Operating	Current operating lease liabilities	$	33,890	$	37,327

Noncurrent:
Operating	Long-term operating lease liabilities	$	111,499	$	113,658

The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases:

Lease Term and Discount Rate

July 5, 2025

December 28, 2024

Weighted-average remaining lease term:

Operating leases

6.3 years

Weighted-average discount rate:

Operating leases

15.2

15.1

Future minimum lease payments by year as of July 5, 2025 were as follows (in thousands):


Fiscal Year	Operating Leases
2025 (remaining)	$	29,667
2026	49,739
2027	35,028
2028	22,506
2029	20,949
Thereafter	75,376

Total lease payments	$	233,265
Less: Interest	87,876
Total lease obligations	$	145,389

Supplemental cash flow information related to leases was as follows (in thousands):


	For the 27 Weeks Ended July 5, 2025		For the 26 Weeks Ended June 29, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	35,269	$	38,818



Leased assets obtained in exchange for new operating lease liabilities	11,989		12,809

As of July 5, 2025, the Company did not have any material operating or finance leases that have been signed but not commenced.

15. DEBT ACTIVITY

Revolving Facility: On September 26, 2019, the Company and Fossil Partners L.P., as the U.S. borrowers, and Fossil Group Europe GmbH, Fossil Asia Pacific Limited, Fossil (Europe) GmbH, Fossil (UK) Limited and Fossil Canada Inc., as the non-U.S. borrowers, certain other subsidiaries of the Company from time to time party thereto designated as borrowers, and certain subsidiaries of the Company from time to time party thereto as guarantors, entered into a secured asset-based revolving credit agreement (the “Revolving Facility”) with JPMorgan Chase Bank, N.A. as administrative agent (the "ABL Agent"), J.P. Morgan AG, as French collateral agent, JPMorgan Chase Bank, N.A., Citizens Bank, N.A. and Wells Fargo Bank, National Association as joint bookrunners and joint lead arrangers, and Citizens Bank, N.A. and Wells Fargo Bank, National Association, as co-syndication agents and each of the lenders from time to time party thereto (the "ABL Lenders").

Notes: In November 2021, the Company sold $150.0 million aggregate principal amount of 7.00% senior notes due November 2026 (the “Notes”), generating net proceeds of approximately $141.7 million. The Notes were issued pursuant to the indenture dated November 8, 2021 (the "Base Indenture") supplemented by a first supplemental indenture dated November 8, 2021 (together with the Base Indenture, the "Indenture") with The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee").

The Notes are general unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness, and will rank senior in right of payment to the Company’s future subordinated indebtedness, if any. The Notes are effectively subordinated to all of the Company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, and the Notes are structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries (excluding any amounts owed by such subsidiaries to the Company). The Notes bear interest at the rate of 7.00% per annum. Interest on the Notes is payable quarterly in arrears on February 28, May 31, August 31 and November 30 of each year. The Notes mature on November 30, 2026.

The Company may redeem the Notes for cash in whole or in part at any time at its option at the following prices: (i) prior to November 30, 2025, at a price equal to $25.25 per $25.00 principal amount of Notes and (ii) on or after November 30, 2025, at a price equal to $25.00 per $25.00 principal amount of Notes, plus (in each case noted above) accrued and unpaid interest, if any, to, but excluding, the date of redemption.

The Indenture contains customary events of default and cure provisions. If an event of default (other than an event of default of the type described in the following sentence) occurs and is continuing with respect to the Notes, the Trustee may, and at the direction of the registered holders of at least 25% in aggregate principal amount of the outstanding debt securities of the Notes shall, declare the principal amount plus accrued and unpaid interest, premium and additional amounts, if any, on the Notes to be due and payable immediately. If an event of default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal amount plus accrued and unpaid interest, and premium, if any, on the Notes will become immediately due and payable without any action on the part of the Trustee or any holder of the Notes.

Fossil India Facility: During the Year To Date Period and in fiscal year 2024, Fossil India Private Ltd. entered into receivables buyout facilities that are used for working capital purposes (the "Fossil India Facilities"). Indian Rupee borrowings, in U.S. dollars, under the Fossil India Facilities were approximately $12.8 million as of July 5, 2025.

Activity: As of July 5, 2025, the Company had $150.0 million and $18.0 million outstanding under the Notes and Revolving Facility, respectively. The Company had net payments of $2.0 million and net borrowings of $2.1 million under the Revolving Facility during the Second Quarter and Year To Date Period, respectively. Amounts available under the Revolving

Facility were reduced by any amounts outstanding under standby letters of credit. As of July 5, 2025, the Company had available borrowing capacity of $0.7 million under the Revolving Facility, however the Revolving Facility requires borrowings in increments of $1.0 million. As of July 5, 2025, the Company had unamortized debt issuance costs of $2.4 million recorded in long-term debt and $1.8 million recorded in intangible and other assets-net on the Company's consolidated balance sheets. The Company incurred $2.7 million and $5.5 million of interest expense related to the Notes during the Second Quarter and Year To Date Period, respectively. The Company incurred $0.4 million and $0.6 million of interest expense related to the Revolving Facility during the Second Quarter and Year To Date Period, respectively. The Company incurred $0.6 million and $1.2 million of interest expense related to the amortization of debt issuance costs during the Second Quarter and Year To Date Period, respectively. At July 5, 2025, the Company was in compliance with all debt covenants related to its credit facilities.

New Revolving Credit Facility: On August 13, 2025, the Company and certain of its subsidiaries identified therein as guarantors entered into a Credit Agreement, dated as of August 13, 2025 (the “ABL Credit Agreement”), with the lenders from time to time party thereto (the “Lenders”), ACF FINCO I LP, as administrative agent on behalf of the Lenders (the “Administrative Agent”), and the Company as a borrower to refinance the Revolving Facility. Pursuant to the Credit Agreement, the Lenders have provided new financing commitments to the Company under a new senior secured asset-based revolving credit facility (the “New Revolving Credit Facility”) in an aggregate principal amount of $150 million.

Borrowings under the New Revolving Credit Facility will bear interest at a rate of 5.00% for term SOFR borrowings and 4.00% for base rate borrowings, payable monthly in arrears. The Lenders will receive an upfront commitment fee equal to 2.00% of the aggregate commitments under the New Revolving Credit Facility. The Company’s obligations under the New Revolving Credit Facility are guaranteed by certain of the Company’s subsidiaries, and those obligations and the guarantees are secured by substantially all of the assets of the Company and certain of its subsidiaries. The ABL Credit Agreement includes customary representations and warranties, covenants applicable to the Company and events of default. If an event of default under the ABL Credit Agreement occurs, the Lenders may, among other things, declare the outstanding obligations under the ABL Credit Agreement to be immediately due and payable.

The New Revolving Credit Facility has a maturity date of August 13, 2030, subject to a springing maturity date if on the date that is the 91st day prior to its scheduled maturity any material indebtedness as defined in the ABL Credit Agreement is outstanding. . See “—Subsequent Events—ABL Credit Agreement” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—ABL Credit Agreement.”

As of August 13, 2025, the Company had $15.0 million borrowed under the New Revolving Credit Facility and $31.1 million of available borrowing capacity.

Transaction Support Agreement: On August 13, 2025, the Company, Fossil (UK) Global Services Ltd. (“Fossil UK”), and certain direct and indirect subsidiaries of the Company identified therein (collectively, the “Company Parties”) also entered into a Transaction Support Agreement (the “Transaction Support Agreement”) with certain holders (the “Consenting Noteholders”) of the Company's Notes. See “—Subsequent Events” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for a discussion of the ABL Credit Agreement and Transaction Support Agreement.

16. RESTRUCTURING

In fiscal 2024, the Company announced a plan to return to profitable growth (the "Turnaround Plan"). The Turnaround Plan is centered on three key areas: (i) refocusing on the core, (ii) rightsizing the cost structure, and (iii) strengthening the balance sheet. The Company expects to achieve selling, general and administrative ("SG&A") cost savings of approximately $100 million in fiscal 2025 as compared to fiscal 2024 through a series of initiatives including a strategic reduction in force which occurred in late February 2025, reduced costs associated with the transition of smaller international markets to a distributor model, and the closing of underperforming retail stores. The Company closed 34 retail stores in the Year To Date Period and plans to close an additional 10 to 15 stores in the second half of fiscal year 2025. The Company will seek to identify additional cost-reduction opportunities, which may generate incremental savings in fiscal 2025. The Company estimates approximately $50 million in total charges in connection with the Turnaround Plan, with approximately $7 million incurred in fiscal 2024 and the remainder expected to be incurred during fiscal 2025.

The following table shows a summary of Turnaround Plan charges (in thousands):


	For the 13 Weeks Ended July 5, 2025		For the 27 Weeks Ended July 5, 2025
Restructuring expenses	7,295		23,116

Consolidated	$	7,295	$	23,116

Turnaround Plan restructuring charges by operating segment were as follows (in thousands):


	For the 13 Weeks Ended July 5, 2025		For the 27 Weeks Ended July 5, 2025
Americas	$	394	$	992
Europe	1,634		3,645
Asia	643		1,085
Corporate	4,624		17,394
Consolidated	$	7,295	$	23,116

The following table shows a rollforward of the accrued liability related to the Company’s Turnaround Plan (in thousands):


	For the 13 Weeks Ended July 5, 2025
	Liabilities						Liabilities
	April 5, 2025		Charges		Cash Payments		July 5, 2025

Professional services	5,340		4,556		3,920		5,976
Severance and employee-related benefits	7,343		2,739		4,003		6,079

Total	$	12,683	$	7,295	$	7,923	$	12,055


	For the 27 Weeks Ended July 5, 2025
	Liabilities								Liabilities
	December 28, 2024		Charges		Cash Payments		Non-cash Items		July 5, 2025
Store closures	$	—	$	10	$	—	$	10	$	—
Professional services	—		11,042		5,066		—		5,976
Severance and employee-related benefits	—		12,064		5,936		49		6,079

Total	$	—	$	23,116	$	11,002	$	59	$	12,055

In fiscal year 2024, the Company concluded its Transform and Grow plan ("TAG") as it transitioned to initiatives under the Turnaround Plan. TAG was launched in early 2023 to reduce operating costs, improve operating margins, and advance the Company’s commitment to profitable growth. The Company had expanded the scope and duration of TAG to focus on a more comprehensive review of its global business operations. The expansion of TAG put greater emphasis on initiatives aimed at restructuring or optimizing operations, exiting or minimizing certain product offerings, brands and distribution channels, strengthening gross margins through improvements in sourcing and improving working capital efficiency. Under the expanded TAG plan, the Company achieved annualized operating income benefits of $280 million over the two-year period.

The following table shows a summary of TAG plan charges (in thousands):


	For the 13 Weeks Ended June 29, 2024		For the 26 Weeks Ended June 29, 2024
Cost of sales	$	—	$	(241)
Restructuring expenses	16,673		26,726
Total	$	16,673	$	26,485

TAG plan restructuring charges by operating segment were as follows (in thousands):


	For the 13 Weeks Ended June 29, 2024		For the 26 Weeks Ended June 29, 2024
Americas	$	262	$	626
Europe	1,869		5,426
Asia	93		1,056
Corporate	14,449		19,377
Consolidated	$	16,673	$	26,485

The following table shows a rollforward of the accrued liability related to the Company’s TAG plan (in thousands):


	For the 13 Weeks Ended July 5, 2025
	Liabilities				Liabilities
	April 5, 2025		Cash Payments		July 5, 2025
Store closures	$	—	$	—	$	—
Professional services	2,972		2,972		—
Severance and employee-related benefits	629		629		—
Charges related to exits of certain product offerings	300		175		125
Total	$	3,901	$	3,776	$	125


	For the 13 Weeks Ended June 29, 2024
	Liabilities								Liabilities
	March 30, 2024		Charges		Cash Payments		Non-cash Items		June 29, 2024
Store closures	$	1	$	36	$	1	$	36	$	—
Professional services	211		11,568		460		—		11,319
Severance and employee-related benefits	8,479		5,069		4,834		365		8,349
Charges related to exits of certain product offerings	750		—		450		—		300
Total	$	9,441	$	16,673	$	5,745	$	401	$	19,968


	For the 27 Weeks Ended July 5, 2025
	Liabilities				Liabilities
	December 28, 2024		Cash Payments		July 5, 2025
Store closures	$	1	$	1	$	—
Professional services	9,501		9,501		$	—
Severance and employee-related benefits	7,341		7,341		—
Charges related to exits of certain product offerings	300		175		125
Total	$	17,143	$	17,018	$	125


	For the 26 Weeks Ended June 29, 2024
	Liabilities								Liabilities
	December 30, 2023		Charges		Cash Payments		Non-cash Items		June 29, 2024
Store closures	$	—	$	143	$	7	$	136	$	—
Professional services	117		14,052		2,850		—		11,319
Severance and employee-related benefits	8,117		12,531		11,934		365		8,349
Charges related to exits of certain product offerings	3,821		(241)		3,280		—		300
Total	$	12,055	$	26,485	$	18,071	$	501	$	19,968

17. SUBSEQUENT EVENTS

Transaction Support Agreement

On August 13, 2025, the Company Parties entered into a Transaction Support Agreement with the Consenting Noteholders representing ownership of approximately 59% of the aggregate principal of the Company's Notes.

The Transaction Support Agreement contains certain covenants on the part of each of the parties thereto, including covenants that the Consenting Noteholders participate in, consent to, vote in favor of, and otherwise support, as applicable:

•A new money financing of up to $32.5 million aggregate principal amount of 9.500% First-Out Senior Secured Notes due 2029 (the “First-Out Notes”) to be offered to (i) the Consenting Noteholders on a private placement basis and (ii) to holders of Notes (“Noteholders”) (other than the Consenting Noteholders) pursuant to an SEC-registered offering (together, the “New Money Financing”) , in each case pro rata (based on the face amount of their respective Notes in comparison to the total aggregate principal amount of all Notes. Noteholders that participate in the New Money Financing for their full pro rata portion of the New Money Financing will also receive Common Stock of the Company equal to 5.0% of their respective funded portion of the New Money Financing, with the value of the Common Stock to be determined based on the average of the Daily VWAPs for the 30 consecutive Trading Days (each as defined in the Transaction Support Agreement) immediately prior to the date of the Transaction Support Agreement.

•An out-of-court private exchange of Notes pursuant to which the Consenting Noteholders will exchange Notes for First-Out Notes at 100% of the face amount of Notes plus accrued and unpaid interest and their portion of the New Warrants (as defined below) as described below (the “Private Exchange”).

•SEC-registered offerings in which the Company will offer to all Noteholders (other than the Consenting Noteholders) the opportunity (i) to participate for their pro rata portion of the New Money Financing (based on the face amount of their respective Notes in comparison to the total aggregate principal amount of all Notes) and to receive their New Stock Investment, and (ii) to tender Notes in exchange for (A) if such Noteholder funds the full amount of its pro rata portion of the New Money Financing, First-Out Notes, and (B) if such Noteholder does not fund the full amount of its pro rata portion of the New Money Financing, 7.500% Second-Out Notes due 2029 (the "Second-Out Notes"), in each case, at 100% of the face amount of its Notes plus accrued and unpaid interest in the case of such exchange, together with, in each case, their portion of the New Warrants as described below (the “Public Exchange,” together with the Private Exchange, the “Exchange Transaction”).

•The issuance of warrants (the “New Warrants”) to purchase 3,000,000 shares of Common Stock or prefunded warrants, pro rata (based on amount of Notes exchanged into First-Out Notes or Second-Out Notes, irrespective of participation in the New Money Financing) to all Noteholders that exchange their Notes in the Exchange Transaction. The New Warrants will have an exercise price of $0.50 per share and a term of 30 days.

•The purchase by certain Consenting Noteholders (the “Backstop Providers”) of an amount of First-Out Notes equal to the amount of unpurchased First-Out Notes in the New Money Financing by Noteholders other than the Consenting Noteholders (the “Backstop Commitment”). As consideration for the Backstop Commitment, the Company will pay the Backstop Providers a backstop premium in the form of additional First-Out Notes.

•To consent to and support a consent solicitation in connection with the Public Exchange (the “Consent Solicitation”) pursuant to which the Company will solicit consents from Noteholders to enter into a supplemental indenture to the

Indenture to (i) in the event the Out-of-Court Threshold (as defined in the Transaction Support Agreement) is met, remove certain covenants and events of default under the Notes, as well as to subordinate the Notes in right of payment to the First-Out Notes, the Second-Out Notes and the ABL Credit Agreement to the fullest extent permitted by Section 316(b) of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the Indenture, as amended; or (ii) in the event the Out-of-Court Threshold is not met and is not waived, amend the Indenture to enable implementation of the restructuring of the Company’s Notes through a proceeding pursuant to the Companies Act 2006 of England and Wales. Noteholders that so consent (including the Consenting Noteholders who have agreed to consent through the Transaction Support Agreement) will receive an aggregate amount of $1.0 million, pro rata (based on amount of Notes consented to by each such Noteholder), payable in First-Out Notes or Second Out Notes, depending on the form of new notes such Noteholder is receiving in exchange for their Notes.

The Transaction Support Agreement contemplates that, if Noteholders of less than 90% (subject to modification or waiver in accordance with the Transaction Support Agreement) of the outstanding principal amount of the Company’s Notes become party to the Transaction Support Agreement or validly tender their Notes in the Exchange Transaction, the restructuring of the Company’s Notes will be implemented through a proceeding initiated in the English Court by Fossil UK pursuant to the Companies Act 2006 of England and Wales.

The Transaction Support Agreement also contains certain customary representations, warranties and other agreements by the parties thereto, and contemplates that the Company Parties and Consenting Noteholders enter into a Mutual Release Agreement, providing for customary mutual releases of claims among the parties thereto.

ABL Credit Agreement

On August 13, 2025, the Company and certain of its subsidiaries identified therein as guarantors entered into the ABL Credit Agreement with the Lenders, the Administrative Agent and the Company as a borrower to refinance the Revolving Credit Facility. Pursuant to the ABL Credit Agreement, the Lenders have provided new financing commitments to the Company under a new senior secured asset-based revolving credit facility (the “New Revolving Credit Facility”) in an aggregate principal amount of $150 million.

Warrant Agreement

On August 13, 2025, the Company entered into a securities exchange agreement with certain institutional stockholders pursuant to which the Company agreed to exchange an aggregate of 2,500,000 shares of the Company’s outstanding Common Stock owned by the institutional holders for pre-funded warrants to purchase an aggregate of 2,500,000 shares of the Company’s Common Stock. Subject to certain ownership limitations, each pre-funded warrant is exercisable into one share of Common Stock at a price per share of $0.01.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company’s fiscal year periodically results in a 53-week year instead of a normal 52-week year. The current fiscal year ending January 3, 2026 is a 53-week year, with the additional week being included in the quarter ended April 5, 2025. The following is a discussion of the financial condition and results of operations of Fossil Group, Inc. and its subsidiaries for the thirteen week periods ended July 5, 2025 (the “Second Quarter”) and June 29, 2024 (the “Prior Year Quarter”), and the twenty-seven week period ended July 5, 2025 (the "Year To Date Period") and the twenty-six week period ended June 29, 2024 (the "Prior Year YTD Period"). This discussion should be read in conjunction with the condensed consolidated financial statements and the related notes thereto.

Overview

We are a global design, marketing and distribution company that specializes in consumer fashion accessories. Our principal offerings include an extensive line of men's and women's fashion watches and jewelry, handbags, small leather goods, belts, and sunglasses. In the watch and jewelry product categories, we have a diverse portfolio of globally recognized owned and licensed brand names under which our products are marketed.

Our products are distributed globally through various distribution channels including wholesale in countries where we have a physical presence, direct to the consumer through our retail stores and commercial websites and through third-party distributors in countries where we do not maintain a physical presence. Our products are offered at varying price points to meet the needs of our customers, whether they are value-conscious or luxury oriented. Based on our range of accessory products, brands, distribution channels and price points, we are able to target style-conscious consumers across a wide age spectrum on a global basis.

Known or Anticipated Trends

Based on our recent operating results and current perspectives on our operating environment, we anticipate the following trends will continue to impact our operating results:

Tariffs Exposure: Most of our products are assembled or manufactured overseas, with the substantial majority of our products imported from China during fiscal year 2024. In fiscal 2024, we generated 25% of our net sales within the U.S. In early 2025, the current U.S. presidential administration announced significant new tariffs on foreign imports into the U.S., including from China. In April 2025, the U.S. government announced additional tariffs on various goods imported into the U.S., which was followed by several months of rapid changes in U.S. trade policies including recent sweeping tariff increases, as well as retaliatory tariffs by foreign countries. As of early August 2025, following multiple delays and pauses in implementation, higher tariff rates went into effect for most products imported into the United States from most of the major trading partners of the U.S. It continues to be reasonably possible that new or additional tariffs will be periodically announced given the current highly volatile and reactionary global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs and heightened global trade disputes. Incremental tariffs negatively impacted our gross margin by approximately 80 basis points and 40 basis points for the Second Quarter and Year To Date Period, respectively. Future adverse effects on our financial results will likely continue if current tariff levels persist or continue to rise, especially for goods imported from China. We are currently developing and implementing mitigation strategies such as price increases and sourcing changes among others, and determining future implementation timelines.

Economic Environment Impacting Consumer Spending Ability and Preferences: We continue to monitor macroeconomic trends and uncertainties and changes in international trade relations and trade policy, including those related to tariffs. As a result of the recent U.S. tariff announcements, potential tariff increases or other adverse modifications or the imposition of retaliatory tariffs by other countries, we anticipate increased supply chain challenges, economic uncertainty, and economic pressures on customers and consumers as a result of the challenges of high inflation combined with the effects of increased tariffs and possible recessionary conditions in the U.S. and global economy.

Inventory Levels: Slower consumer demand across a wide array of discretionary goods has translated in some cases to excess inventory levels in key accounts and overall cautious buying patterns across our wholesale customers. With the challenging global macro environment, we expect many customers to continue to manage to leaner inventory levels than historically across our key categories to reduce inventory carrying risk. We will continue to proactively manage our inventory purchases to mitigate our cash flow and inventory risks.

World Conflicts: We continuously monitor the direct and indirect impacts from the military conflicts between Russia and Ukraine and in the Middle East. Our operations in Russia and Israel consist of sales through third-party distributors, and our sales in Russia and Israel are not material to our financial results. We have no other operations, including supply chain, in Israel, Palestine, Russia or Ukraine. However, the continuation of the current military conflicts or an escalation of the conflicts

beyond their current scope may continue to weaken the global economy, negatively impact consumer confidence, and could result in additional inflationary pressures and supply chain constraints.

Data: We depend on information technology systems, the Internet and computer networks for a substantial portion of our retail and e-commerce businesses, including credit card transaction authorization and processing. We also receive and store personal information about our customers and employees, the protection of which is critical to us. In the normal course of our business, we collect, retain, and transmit certain sensitive and confidential customer information, including credit card information, over public networks. Despite the security measures we currently have in place, our facilities and systems and those of our third party service providers have been, and will continue to be, vulnerable to theft of physical information, security breaches, hacking attempts, computer viruses and malware, ransomware, phishing, lost data and programming and/or human errors. To date, none of these risks, intrusions, attacks or human error have resulted in any material liability to us. While we carry insurance policies that would provide liability coverage for certain of these matters, if we experience a significant security incident, we could be subject to liability or other damages that exceed our insurance coverage. In addition, we cannot be certain that such insurance policies will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.

Business Strategies and Outlook: Our goal is to drive shareholder value. We operate in a very challenging business environment for our product offerings, which is complicated by the dynamic global trade environment as a result of U.S. tariffs.

In March 2024, we announced that we would undertake a strategic review of our current business model and capital structure. This includes a broader set of efforts to optimize our business model and further reduce structural costs, monetize various assets, and could include additional debt and equity financing options.

In September 2024, we appointed Franco Fogliato Chief Executive Officer and a member of the Board of Directors (the "Board") and moved quickly to implement changes and create a plan to return the Company to profitable growth (the "Turnaround Plan"). Our Turnaround Plan is centered on three key areas: (i) refocusing on our core, (ii) rightsizing our cost structure, and (iii) strengthening our balance sheet.

As part of refocusing on our core we are building an operating model that is brand-led and consumer focused. We are returning to our core businesses with a renewed emphasis on traditional watches on our FOSSIL brand platform, as well as our go-to market execution. We are launching a new FOSSIL brand platform, leveraging our major licensed brands, optimizing our global wholesale footprint and driving channel profitability.

The second key area of our Turnaround Plan is focused on aligning the cost structure to our newly defined strategy. In 2025, we expect to achieve selling, general and administrative ("SG&A") cost savings of approximately $100 million as compared to fiscal 2024 through a series of initiatives including a strategic reduction in force which occurred in late February 2025, reduced costs associated with the transition of smaller international markets to a distributor model, and the closing of underperforming FOSSIL retail stores. We have closed a net 34 retail stores in the first half of 2025 and plan to close an additional 10 to 15 stores in the second half of the year. We also expect to divest certain non-core assets and will seek to identify additional cost-reduction opportunities, which may generate incremental savings in 2025.

Under our third key area, strengthening our balance sheet, we are actively pursuing initiatives to monetize non-core assets, improve working capital and strengthen liquidity. During the Second Quarter we entered into a sale of our European distribution center for $23 million. On August 13, 2025, we entered into the New Revolving Credit Facility, replacing our previous revolving credit facility, and the Transaction Support Agreement, See "Item 1. Financial Statement-Notes to Condensed Consolidated Financial Statements-17. Subsequent Events" and "-Liquidity and Capital Resources" for more details.

Aided by our restructuring programs, we achieved gross margins above 50% for fiscal year 2024 and just below 60% for the first half of 2025, which included some adverse effects of the tariffs in the Second Quarter, as already mentioned. Our goal is to achieve positive adjusted operating margins as we continue to realize improvement across the Turnaround Plan workstreams.

For a more complete discussion of the risks facing our business, see “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024.

Operating Segments

We operate our business in three segments which are divided into geographies. Net sales for each geographic segment are based on the location of the selling entity, and each reportable segment provides similar products and services.

Americas: The Americas segment is comprised of sales from our operations in the United States, Canada and Latin America. Sales are generated through diversified distribution channels that include wholesalers, distributors, and direct to consumer. Within each channel, we sell our products through a variety of physical points of sale, distributors and e-commerce channels. In the direct to consumer channel, we had 101 Company-owned stores as of the end of the Second Quarter and an extensive collection of products available through our owned websites.

Europe: The Europe segment is comprised of sales to customers based in European countries, the Middle East and Africa. Sales are generated through diversified distribution channels that include wholesalers, distributors and direct to consumer. Within each channel, we sell our products through a variety of physical points of sale, distributors, and e-commerce channels. In the direct to consumer channel, we had 52 Company-owned stores as of the end of the Second Quarter and an extensive collection of products available through our owned websites.

Asia: The Asia segment is comprised of sales to customers based in Australia, greater China (including mainland China, Hong Kong SAR, Macau SAR and Taiwan), India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea and Thailand. Sales are generated through diversified distribution channels that include wholesalers, distributors and direct to consumer. Within each channel, we sell our products through a variety of physical points of sale, distributors, and e-commerce channels. In the direct to consumer channel, we had 61 Company-owned stores as of the end of the Second Quarter and an extensive collection of products available through our owned websites.

Key Measures of Financial Performance and Key Non-GAAP Financial Measures

Constant Currency Financial Information: As a multinational enterprise, we are exposed to changes in foreign currency exchange rates. The translation of the operations of our foreign-based entities from their local currencies into U.S. dollars is sensitive to changes in foreign currency exchange rates and can have a significant impact on our reported financial results. In general, our overall financial results are affected positively by a weaker U.S. dollar and are affected negatively by a stronger U.S. dollar as compared to the foreign currencies in which we conduct our business.

As a result, in addition to presenting financial measures in accordance with accounting principles generally accepted in the United States of America ("GAAP"), our discussion contains references to constant currency financial information, which is a non-GAAP financial measure. To calculate net sales on a constant currency basis, net sales for the current fiscal year for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average rates during the comparable period of the prior fiscal year. We present constant currency information to provide investors with a basis to evaluate how our underlying business performed excluding the effects of foreign currency exchange rate fluctuations. The constant currency financial information presented herein should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Reconciliations between constant currency financial information and the most directly comparable GAAP measure are included where applicable.

Adjusted EBITDA, Adjusted Operating Income (Loss), Constant Currency Adjusted Operating Income (Loss), Adjusted Net Income (Loss) and Adjusted Earnings (Loss) per Share: Adjusted EBITDA, Adjusted operating income (loss), Constant currency adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share are non-GAAP financial measures. We define Adjusted EBITDA as our income (loss) before income taxes, plus interest expense, amortization and depreciation, impairment expense, other non-cash charges, stock-based compensation expense, restructuring expense and unamortized debt issuance costs included in loss on extinguishment of debt minus gains on asset divestitures and interest income. We define Adjusted operating income (loss) as operating income (loss) before impairment expense, restructuring expense and gains on asset divestitures. We define Constant currency adjusted operating income (loss) as operating income (loss) before impairment expense, restructuring expense and gains on asset divestitures and excluding the effects of foreign currency exchange rate fluctuations. We define Adjusted net income (loss) and Adjusted earnings (loss) per share as net income (loss) attributable to Fossil Group, Inc. and diluted earnings (loss) per share, respectively, before impairment expense, restructuring expense, gains on asset divestitures and unamortized debt issuance costs included in loss on extinguishment of debt. We have included Adjusted EBITDA, Adjusted operating income (loss), Constant currency adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share herein because they are widely used by investors for valuation and for comparing our financial performance with the performance of our competitors. We also use these non-GAAP financial measures to monitor and compare the financial performance of our operations. Our presentation of Adjusted EBITDA, Adjusted operating income (loss), Constant currency adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share may not be comparable to similarly titled measures other companies report. Adjusted EBITDA, Adjusted operating income (loss), Constant currency adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share are not intended to be used as alternatives to any measure of our performance in accordance with GAAP.

Comparable Retail Sales: Both stores and e-commerce sites are included in comparable retail sales in the thirteenth month of operation. Stores that experience a gross square footage change of 10% or more due to an expansion and/or relocation are removed from the comparable store sales base, but are included in total sales. These stores are returned to the comparable

store sales base in the thirteenth month following the expansion and/or relocation. Comparable retail sales were adjusted to normalize the 27-week Year To Date Period with the 26-week Prior Year YTD Period. Comparable retail sales also exclude the effects of foreign currency fluctuations.

Store Counts: While macroeconomic factors have shifted sales away from traditional brick and mortar stores towards digital channels, store counts continue to provide a key metric for management. Over time, we have made progress right-sizing our fleet of stores, focusing on closing our least profitable stores, and the size and quality of our store fleet have a direct impact on our sales and profitability.

Total Liquidity: We define total liquidity as cash and cash equivalents plus available borrowings on our revolving credit facility. We monitor and forecast total liquidity to ensure we can meet our financial obligations.

Components of Results of Operations

Revenues from sales of our products, including those that are subject to inventory consignment agreements, are recognized when control of the product is transferred to the customer and in an amount that reflects the consideration we expect to be entitled in exchange for the product. We accept limited returns from customers. We continually monitor returns and maintain a provision for estimated returns based upon historical experience and any specific issues identified. Our product returns are accounted for as reductions to revenue and cost of sales and an increase to customer liabilities and other current assets to the extent the returned product is resalable.

Cost of Sales includes raw material costs, assembly labor, assembly overhead including depreciation expense, assembly warehousing costs and shipping and handling costs related to the movement of finished goods from assembly locations to sales distribution centers and from sales distribution centers to customer locations. Additionally, cost of sales includes customs duties, product packaging cost, royalty cost associated with sales of licensed products, the cost of molding and tooling, inventory shrinkage and damages and restructuring charges.

Gross Profit and gross profit margin are influenced by our diversified business model that includes, but is not limited to: (i) product categories that we distribute; (ii) the multiple brands, including both owned and licensed, we offer within several product categories; (iii) the geographical presence of our businesses; and (iv) the different distribution channels we sell to or through.

The attributes of this diversified business model produce varying ranges of gross profit margin. Generally, on a historical basis, our fashion branded traditional watch and jewelry offerings produce higher gross profit margins than our smartwatches and leather goods offerings. In addition, in most product categories that we offer, brands with higher retail price points generally produce higher gross profit margins compared to those of lower retail priced brands. However, smartwatches carry relatively lower margins than our other major product categories. Gross profit margins related to sales in our Europe and Asia businesses are historically higher than our Americas business, primarily due to the following factors: (i) premiums charged in comparison to retail prices on products sold in the U.S.; (ii) the product sales mix in our international businesses, in comparison to our Americas business, is comprised more predominantly of watches and jewelry that generally produce higher gross profit margins than leather goods; and (iii) the watch sales mix in our Europe and Asia businesses, in comparison to our Americas business, are comprised more predominantly of higher priced licensed brands.

Operating Expenses include SG&A, other long-lived asset impairments and restructuring charges. SG&A expenses include selling and distribution expenses primarily consisting of sales and distribution labor costs, sales distribution center and warehouse facility costs, depreciation expense related to sales distribution and warehouse facilities, the four-wall operating costs of our retail stores, point-of-sale expenses, advertising expenses and art, design and product development labor costs. SG&A also includes general and administrative expenses primarily consisting of administrative support labor and support costs such as treasury, legal, information services, accounting, internal audit, human resources, executive management costs and costs associated with stock-based compensation. Restructuring charges include costs to reorganize, refine and optimize our Company’s infrastructure and store closures under our Turnaround Plan.

Results of Operations

Quarterly Periods Ended July 5, 2025 and June 29, 2024

Consolidated Net Sales. Net sales decreased $39.6 million, or 15.2% (15.8% in constant currency), for the Second Quarter as compared to the Prior Year Quarter, with sales declines in all three regions. The sales decrease was largely driven by overall category, consumer and channel softness. Declines in smartwatch sales and our store rationalization initiatives comprised approximately 550 basis points of the sales decline in the Second Quarter compared to the Prior Year Quarter. Wholesale sales declined 5.9% (6.2% in constant currency). Direct to consumer sales declined by 29.0% (30.0% in constant currency), due to a smaller store base and declines in our comparable retail sales. We have reduced our store footprint by 17.1% since the end of the Prior Year Quarter. Global comparable retail sales decreased 22.9% due to decreases in both our owned e-

commerce websites and stores. From a category perspective, traditional watch sales decreased 8.1% (8.4% in constant currency). Net sales in smartwatches decreased 83.3% (83.7% constant currency), as we exited the category. The leathers category decreased 37.9% (38.6% in constant currency) compared to the Prior Year Quarter, and jewelry sales decreased 19.8% (22.3% in constant currency). From a brand perspective, the most predominant sales declines were in the FOSSIL and EMPORIO ARMANI brands.

The following table sets forth consolidated net sales by segment (dollars in millions):


	For the 13 Weeks Ended July 5, 2025				For the 13 Weeks Ended June 29, 2024				Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Americas	$	95.7	43.4	%	$	119.6	46.0	%	$	(23.9)	(20.0)	%	(18.8)	%
Europe	67.2		30.5		74.8		28.8		(7.6)		(10.2)		(14.2)
Asia	57.4		26.0		65.2		25.1		(7.8)		(12.0)		(11.8)
Corporate	0.1		0.1		0.4		0.1		(0.3)		(75.0)		(75.0)
Total	$	220.4	100.0	%	$	260.0	100.0	%	$	(39.6)	(15.2)	%	(15.8)	%

Net sales information by product category is summarized as follows (dollars in millions):


	For the 13 Weeks Ended July 5, 2025				For the 13 Weeks Ended June 29, 2024
									Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Watches:
Traditional watches	$	178.4	80.9	%	$	194.1	74.7	%	$	(15.7)	(8.1)	%	(8.4)	%
Smartwatches	1.4		0.6		8.4		3.2		(7.0)		(83.3)		(83.7)
Total watches	$	179.8	81.5	%	$	202.5	77.9	%	$	(22.7)	(11.2)		(11.5)
Leathers	16.9		7.7		27.2		10.4		(10.3)		(37.9)		(38.6)
Jewelry	19.4		8.8		24.2		9.3		(4.8)		(19.8)		(22.3)
Other	4.3		2.0		6.1		2.4		(1.8)		(29.5)		(31.1)
Total	$	220.4	100.0	%	$	260.0	100.0	%	$	(39.6)	(15.2)	%	(15.8)	%

In the Second Quarter, the translation of foreign-based net sales into U.S. dollars increased net sales by $1.5 million, with favorable impacts of $3.0 million in Europe partially offset by unfavorable impacts of $1.4 million and $0.1 million in our Americas and Asia segments, respectively, as compared to the Prior Year Quarter.

Stores. The following table sets forth the number of stores on the dates indicated below:


	June 29, 2024	Opened	Closed	July 5, 2025
Americas	120	0	19	101
Europe	69	0	17	52
Asia	69	3	11	61
Total stores	258	3	47	214

Americas Net Sales. Americas net sales decreased $23.9 million, or 20.0% (18.8% in constant currency), during the Second Quarter in comparison to the Prior Year Quarter. Sales decreases were largely in the FOSSIL brand. Sales decreased in wholesale, stores and e-commerce channels. Comparable retail sales decreased sharply during the Second Quarter.

The following table sets forth product net sales and the changes in product net sales on both a reported and constant currency basis from period to period for the Americas segment (dollars in millions):


	For the 13 Weeks Ended July 5, 2025				For the 13 Weeks Ended June 29, 2024
									Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Watches:
Traditional watches	$	77.2	80.7	%	$	87.9	73.5	%	$	(10.7)	(12.2)	%	(10.7)	%
Smartwatches	1.7		1.8		5.5		4.6		(3.8)		(69.1)		(69.1)
Total watches	$	78.9	82.5	%	$	93.4	78.1	%	$	(14.5)	(15.5)		(14.1)
Leathers	10.7		11.2		18.2		15.2		(7.5)		(41.2)		(40.7)
Jewelry	4.5		4.7		5.5		4.6		(1.0)		(18.2)		(18.2)
Other	1.6		1.6		2.5		2.1		(0.9)		(36.0)		(32.0)
Total	$	95.7	100.0	%	$	119.6	100.0	%	$	(23.9)	(20.0)	%	(18.8)	%

Europe Net Sales. Europe net sales decreased $7.6 million, or 10.2% (14.2% in constant currency), during the Second Quarter in comparison to the Prior Year Quarter. Sales decreases were largely in the FOSSIL brand. Our sales decreased across much of the Eurozone and in all major channels. Comparable retail sales decreased sharply during the Second Quarter, with sales declines in our stores and owned e-commerce.

The following table sets forth product net sales and the changes in product net sales on both a reported and constant currency basis from period to period for the Europe segment (dollars in millions)


	For the 13 Weeks Ended July 5, 2025				For the 13 Weeks Ended June 29, 2024
									Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Watches:
Traditional watches	$	52.6	78.3	%	$	55.6	74.3	%	$	(3.0)	(5.4)	%	(9.5)	%
Smartwatches	0.2		0.3		0.5		0.7		(0.3)		(60.0)		(80.0)
Total watches	$	52.8	78.6	%	$	56.1	75.0	%	$	(3.3)	(5.9)		(10.2)
Leathers	2.1		3.1		3.7		4.9		(1.6)		(43.2)		(45.9)
Jewelry	10.4		15.5		12.2		16.3		(1.8)		(14.8)		(18.9)
Other	1.9		2.8		2.8		3.8		(0.9)		(32.1)		(35.7)
Total	$	67.2	100.0	%	$	74.8	100.0	%	$	(7.6)	(10.2)	%	(14.2)	%

Asia Net Sales. Net sales in Asia decreased $7.8 million, or 12.0% (11.8% in constant currency), during the Second Quarter in comparison to the Prior Year Quarter. The sales decreases were largely driven by mainland China and partially offset by sales growth in India. The largest sales decreases were in the EMPORIO ARMANI brand. Sales decreased in wholesale, stores and e-commerce channels. Comparable retail sales decreased moderately during the Second Quarter.

The following table sets forth product net sales and the changes in product net sales on both a reported and constant currency basis from period to period for the Asia segment (dollars in millions):


	For the 13 Weeks Ended July 5, 2025				For the 13 Weeks Ended June 29, 2024
									Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Watches:
Traditional watches	$	48.6	84.7	%	$	50.5	77.5	%	$	(1.9)	(3.8)	%	(3.0)	%
Smartwatches	(0.5)		(0.9)		2.3		3.5		(2.8)

Fossil Group, Inc. 10-Q