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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: April 4, 2026


☐			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

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 May 8, 2026: 59,101,598

FOSSIL GROUP, INC.

FORM 10-Q

FOR THE FISCAL QUARTER ENDED APRIL 4, 2026

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	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
	Results of Operations	27
	Liquidity and Capital Resources	33
	Forward-Looking Statements	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
	SIGNATURES	41

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


	April 4, 2026		January 3, 2026
Assets
Current assets:
Cash and cash equivalents	$	81,384	$	95,842
Accounts receivable - net of allowances for doubtful accounts of $11,647 and $12,991, respectively	116,843		144,569
Inventories	156,075		151,796
Prepaid expenses and other current assets	81,576		75,623
Total current assets	435,878		467,830
Property, plant and equipment - net of accumulated depreciation of $299,706 and $309,285, respectively	32,530		34,126
Operating lease right-of-use assets	120,012		118,302

Intangible and other assets-net	66,124		68,996
Total long-term assets	218,666		221,424
Total assets	$	654,544	$	689,254
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	123,925	$	132,514
Short-term debt	2,287		3,985
Accrued expenses:
Current operating lease liabilities	34,441		34,768
Compensation	27,116		48,695
Royalties	12,018		17,909
Customer liabilities	22,656		29,186
Transaction taxes	2,755		5,109
Other	14,608		17,310
Income taxes payable	13,610		12,287
Total current liabilities	253,416		301,763
Long-term income taxes payable	5,656		5,481
Deferred income tax liabilities	819		607
Long-term debt	193,015		173,847
Long-term operating lease liabilities	104,404		104,442
Other long-term liabilities	14,067		16,338
Total long-term liabilities	317,961		300,715
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, 58,404 and 58,354 shares issued and outstanding at April 4, 2026 and January 3, 2026 respectively	584		584
Treasury stock, at cost, 2,500 shares at April 4, 2026 and January 3, 2026	(4,525)		(4,525)
Additional paid-in capital	329,916		329,232
Retained (deficit) earnings	(163,377)		(162,567)
Accumulated other comprehensive income (loss)	(63,505)		(59,889)
Total Fossil Group, Inc. stockholders’ equity	99,093		102,835
Noncontrolling interests	(15,926)		(16,059)
Total stockholders’ equity	83,167		86,776
Total liabilities and stockholders’ equity	$	654,544	$	689,254

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 April 4, 2026		For the 14 Weeks Ended April 5, 2025
Net sales	$	224,761	$	233,293
Cost of sales	90,058		90,301
Gross profit	134,703		142,992
Operating expenses:
Selling, general and administrative expenses	120,559		133,839

Other long-lived asset impairments	61		79
Restructuring expenses	2,034		15,821
Total operating expenses	122,654		149,739
Operating income (loss)	12,049		(6,747)
Interest expense	8,450		4,467
Other income (expense) - net	1,156		(3,268)
Income (loss) before income taxes	4,755		(14,482)
Provision (benefit) for income taxes	5,432		3,368
Net income (loss)	(677)		(17,850)
Less: Net income (loss) attributable to noncontrolling interests	133		(274)
Net income (loss) attributable to Fossil Group, Inc.	$	(810)	$	(17,576)
Other comprehensive income (loss), net of taxes:
Currency translation adjustment	$	(3,616)	$	9,291
Cash flow hedges - net change	—		(474)

Total other comprehensive income (loss)	(3,616)		8,817
Total comprehensive income (loss)	(4,293)		(9,033)
Less: Comprehensive income (loss) attributable to noncontrolling interests	133		(274)
Comprehensive income (loss) attributable to Fossil Group, Inc.	$	(4,426)	$	(8,759)
Earnings (loss) per share:
Basic	$	(0.01)	$	(0.33)
Diluted	$	(0.01)	$	(0.33)
Weighted average common shares outstanding:
Basic	58,374		53,259
Diluted	58,374		53,259

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 April 4, 2026
	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, January 3, 2026	58,354	$	584	$	329,232	$	(4,525)	$	(162,567)	$	(59,889)	$	102,835	$	(16,059)	$	86,776
Common stock issued upon exercise of restricted stock units	50	—		—		—		—		—		—		—		—





Stock-based compensation	—	—		684		—		—		—		684		—		684
Net income (loss)	—	—		—		—		(810)		—		(810)		133		(677)
Other comprehensive income (loss)	—	—		—		—		—		(3,616)		(3,616)		—		(3,616)




Balance, April 4, 2026	58,404	$	584	$	329,916	$	(4,525)	$	(163,377)	$	(63,505)	$	99,093	$	(15,926)	$	83,167


For the 14 Weeks Ended April 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 restricted stock units	19	—		—		—		—		—		—		—		—

Acquisition of common stock for employee tax withholding	—	—		—		(3)		—		—		(3)		—		(3)
Retirement of common stock	(2)	—		(3)		3		—		—		—		—		—


Stock-based compensation	—	—		641		—		—		—		641		—		641
Net income (loss)	—	—		—		—		(17,576)		—		(17,576)		(274)		(17,850)
Other comprehensive income (loss)	—	—		—		—		—		8,817		8,817		—		8,817

Distribution of noncontrolling interest earnings	—	—		—		—		—		—		—		(3,920)		(3,920)



Balance, April 5, 2025	53,271	$	533	$	315,680	$	—	$	(101,844)	$	(73,787)	$	140,582	$	(16,173)	$	124,409

See notes to the unaudited condensed consolidated financial statements.

FOSSIL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

IN THOUSANDS


	For the 13 Weeks Ended April 4, 2026		For the 14 Weeks Ended April 5, 2025
Operating Activities:
Net income (loss)	$	(677)	$	(17,850)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion	1,792		3,441
Non-cash lease expense	13,869		14,975
Stock-based compensation	684		593
Decrease in allowance for returns and markdowns	(5,793)		(4,538)






Other non-cash items	1,808		(485)


Changes in operating assets and liabilities:
Accounts receivable	27,700		40,505
Inventories	(5,576)		(328)
Prepaid expenses and other current assets	(7,517)		(6,709)
Accounts payable	(788)		(41,123)
Accrued expenses	(32,909)		(30,462)
Income taxes	1,598		1,006
Operating lease liabilities	(15,955)		(19,381)
Net cash used in operating activities	(21,764)		(60,356)
Investing Activities:
Additions to property, plant and equipment	(949)		(285)
Decrease in intangible and other assets	290		987


Net cash (used in) provided by investing activities	(659)		702
Financing Activities:
Acquisition of common stock	—		(3)
Distribution of noncontrolling interest earnings	—		(3,920)
Debt borrowings	28,158		39,338
Debt payments	(12,742)		(25,176)

Debt issuance costs	(7,411)		—
Net cash provided by financing activities	8,005		10,239
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(857)		4,087
Net decrease in cash, cash equivalents, and restricted cash	(15,275)		(45,328)
Cash, cash equivalents, and restricted cash:
Beginning of period	99,426		126,592
End of period	$	84,151	$	81,264

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 prior fiscal year ending January 3, 2026 was a 53-week year, with the additional week being included in the first quarter. Accordingly, the information presented herein includes the thirteen-week period ended April 4, 2026 (“First Quarter”) as compared to the fourteen-week period ended April 5, 2025 (“Prior Year Quarter”). 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 April 4, 2026, and the results of operations for the First Quarter and Prior Year Quarter. 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, January 3, 2026 (the “2025 Form 10-K”). Operating results for the First 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 2025 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 April 4, 2026		For the 14 Weeks Ended April 5, 2025
Numerator:
Net income (loss) attributable to Fossil Group, Inc.	$	(810)	$	(17,576)
Denominator:
Basic EPS computation:
Basic weighted average common shares outstanding	58,374		53,259
Basic EPS	$	(0.01)	$	(0.33)
Diluted EPS computation:

Diluted weighted average common shares outstanding	58,374		53,259
Diluted EPS	$	(0.01)	$	(0.33)

Weighted average shares issuable under stock-based awards that were not included in the diluted EPS calculation because they were antidilutive were approximately 3.1 million at the end of the First Quarter. The total antidilutive weighted average shares included 1.2 million weighted average performance-based shares at the end of the First Quarter.

At the end of the Prior Year Quarter, approximately 3.0 million weighted average shares issuable under stock-based awards were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 0.1 million weighted average performance-based shares at the end of the Prior Year Quarter.

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. The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of April 4, 2026 and April 5, 2025 that are presented in the condensed consolidated statement of cash flows (in thousands):


	April 4, 2026		April 5, 2025
Cash and cash equivalents	$	81,384	$	78,291
Restricted cash included in prepaid expenses and other current assets	975		538
Restricted cash included in intangible and other assets-net	1,792		2,435
Cash, cash equivalents and restricted cash	$	84,151	$	81,264

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 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.

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 April 4, 2026
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	83,971	$	57,625	$	47,136	$	—	$	188,732
Smartwatches	1,610		(94)		214		—		1,730
Total watches	$	85,581	$	57,531	$	47,350	$	—	$	190,462
Leathers	5,992		1,596		3,053		—		10,641
Jewelry	3,792		11,313		5,035		—		20,140
Other	1,409		1,067		585		457		3,518
Consolidated	$	96,774	$	71,507	$	56,023	$	457	$	224,761

Timing of revenue recognition
Revenue recognized at a point in time	$	96,765	$	71,495	$	56,010	$	457	$	224,727
Revenue recognized over time	9		12		13		—		34
Consolidated	$	96,774	$	71,507	$	56,023	$	457	$	224,761


	For the 14 Weeks Ended April 5, 2025
	Americas		Europe		Asia		Corporate		Total
Product type
Watches:
Traditional watches	$	77,995	$	60,194	$	46,442	$	—	$	184,631
Smartwatches	2,938		834		274		—		4,046
Total watches	$	80,933	$	61,028	$	46,716	$	—	$	188,677
Leathers	9,741		2,226		5,213		—		17,180
Jewelry	5,351		12,202		4,707		—		22,260
Other	1,704		1,877		709		886		5,176
Consolidated	$	97,729	$	77,333	$	57,345	$	886	$	233,293

Timing of revenue recognition
Revenue recognized at a point in time	$	97,669	$	77,248	$	57,269	$	886	$	233,072
Revenue recognized over time	60		85		76		—		221
Consolidated	$	97,729	$	77,333	$	57,345	$	886	$	233,293

Contract Balances. As of April 4, 2026, 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 (i) $0.3 million as of April 4, 2026 and no contract liabilities as of January 3, 2026 related to remaining performance obligations on licensing income, (ii) $0.1 million and $0.1 million as of April 4, 2026 and January 3, 2026, respectively, primarily related to remaining performance obligations on wearable technology products and (iii) $1.4 million and $1.7 million as of April 4, 2026 and January 3, 2026, respectively, related to gift cards issued.

3. INVENTORIES

Inventories consisted of the following (in thousands):


	April 4, 2026		January 3, 2026
Components and parts	$	10,257	$	15,575


Finished goods	145,818		136,221
Inventories	$	156,075	$	151,796

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 13 Weeks Ended April 4, 2026		For the 14 Weeks Ended April 5, 2025
Beginning balance	$	4,343	$	6,113
Settlements in cash or kind	(1,560)		(1,169)
Warranties issued and adjustments to preexisting warranties (1)	1,083		508
Ending balance	$	3,866	$	5,452

_______________________________________________

(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 April 4, 2026			For the 14 Weeks Ended April 5, 2025
Income tax expense (benefit)	$	5,432		$	3,368
Effective tax rate	114.2		%	(23.3)		%

The effective tax rate in the First Quarter was higher as compared to the Prior Year Quarter, reflecting increased foreign earnings. In both the First Quarter and the Prior Year Quarter, the tax rate was driven by the Company accruing foreign tax expense on certain foreign entities with positive income and no benefit accrued on the U.S. tax losses. The overall tax rate is impacted by the Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Cuts and Jobs Act and/or Subpart F income, which requires the inclusion of certain foreign income in the tax return which absorbs the U.S. net operating loss. Foreign income taxes are also paid on this same foreign income, resulting in double taxation. The effective tax rate can vary from quarter-to-quarter due to changes in the Company's global mix of earnings, the resolution of income tax audits and changes in tax law.

As of April 4, 2026, the Company's total amount of unrecognized tax benefits, excluding interest and penalties, was $7.0 million, all of which would favorably impact the effective tax rate in future periods, if recognized. The Company reasonably expects that certain remaining uncertain tax positions will be resolved within the next twelve months, which if resolved favorably, 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 April 4, 2026, the Company has not recorded 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 April 4, 2026, the total amount of accrued income tax-related interest included in the condensed consolidated balance sheets was $1.8 million all of which is accrued interest expense. 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, authorized, with 58,404,013 and 58,354,014 shares issued and outstanding at April 4, 2026 and January 3, 2026, respectively. The Company has 1,000,000 shares of preferred stock, par value $0.01 per share, authorized, with none issued or outstanding at April 4, 2026 or January 3, 2026. 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.

As of April 4, 2026, the Company had $15.5 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 First Quarter or Prior Year Quarter.

Warrant Agreements. On August 13, 2025, the Company entered into a securities exchange agreement with certain institutional stockholders (the "Exchanging Stockholders”), pursuant to which the Company agreed to exchange an aggregate of 2.5 million shares of the Company’s common stock, par value $0.01 per share (the "Surrendered Shares”), owned by the Exchanging Stockholders for pre-funded warrants (the "Exchange Warrants”) to purchase an aggregate of 2.5 million shares of common stock with an exercise price of $0.01 per share. The Exchange Warrants will not expire prior to exercise. The Company also agreed to pay the Exchanging Stockholders an amount of $0.01 per share for the Surrendered Shares. The Exchange Warrants are exercisable at any time, except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99% of the Company’s common stock, subject to certain exceptions. The Exchange Warrants were determined to be equity classified in accordance with ASC 815. As of April 4, 2026, 2.5 million Exchange Warrants were outstanding.

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 First Quarter:


Restricted Stock Units and Performance Restricted Stock Units	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
	(in Thousands)
Nonvested at January 3, 2026	3,151	$	1.31
Granted	20	4.77
Vested	(50)	1.27
Forfeited	(33)	1.12
Nonvested at April 4, 2026	3,088	$	1.31

The total fair value of restricted stock units vested was approximately $0.2 million during the First 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 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.

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 April 4, 2026
	Currency Translation Adjustments		Cash Flow Hedges
			Forward Contracts		Pension Plan		Total
Beginning balance	$	(65,031)	$	1,338	$	3,804	$	(59,889)
Other comprehensive income (loss) before reclassifications	(3,616)		—		—		(3,616)
Tax (expense) benefit	—		—		—		—
Amounts reclassed from accumulated other comprehensive income (loss)	—		—		—		—
Tax (expense) benefit	—		—		—		—
Total other comprehensive income (loss)	(3,616)		—		—		(3,616)
Ending balance	$	(68,647)	$	1,338	$	3,804	$	(63,505)


	For the 14 Weeks Ended April 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	9,291		140		—		9,431
Tax (expense) benefit	—		—		—		—
Amounts reclassed from accumulated other comprehensive income (loss)	—		614		—		614
Tax (expense) benefit	—		—		—		—
Total other comprehensive income (loss)	9,291		(474)		—		8,817
Ending balance	$	(79,393)	$	1,338	$	4,268	$	(73,787)

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 (loss) 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 (loss) 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 April 4, 2026
	Americas		Europe		Asia		Corporate		Total
Net sales	$	96,774	$	71,507	$	56,023	$	457	$	224,761
Cost of sales	38,426		26,353		22,802		2,477		90,058
Gross profit	$	58,348	$	45,154	$	33,221	$	(2,020)	$	134,703
Marketing	4,476		4,675		3,653		1,600		14,404
Compensation and benefits	13,780		15,559		6,981		21,483		57,803
Depreciation and amortization	513		559		360		978		2,410
Other segment items (1)	11,796		8,274		6,626		21,341		48,037
Operating income (loss)	$	27,783	$	16,087	$	15,601	$	(47,422)	$	12,049


	For the 14 Weeks Ended April 5, 2025
	Americas		Europe		Asia		Corporate		Total
Net sales	$	97,729	$	77,333	$	57,345	$	886	$	233,293
Cost of sales	41,019		29,202		19,909		171		90,301
Gross profit	$	56,710	$	48,131	$	37,436	$	715	$	142,992
Marketing	4,046		3,750		4,042		1,408		13,246
Compensation and benefits	15,552		17,875		8,724		31,541		73,692
Depreciation and amortization	729		817		615		1,207		3,368
Other segment items (1)	12,153		8,935		8,797		29,548		59,433
Operating income (loss)	$	24,230	$	16,754	$	15,258	$	(62,989)	$	(6,747)

______________________________________________________________________________

(1) Other segment items for each reportable segment include long-lived asset impairments, restructuring charges, facility costs, overhead expenses, fixed asset disposal 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 April 4, 2026				For the 14 Weeks Ended April 5, 2025
	Net Sales		Percentage of Total		Net Sales		Percentage of Total
Watches:
Traditional watches	$	188,732	84.0	%	$	184,631	79.1	%
Smartwatches	1,730		0.8		4,046		1.7
Total watches	$	190,462	84.8	%	$	188,677	80.8	%
Leathers	10,641		4.7		17,180		7.4
Jewelry	20,140		9.0		22,260		9.5
Other	3,518		1.5		5,176		2.3
Total	$	224,761	100.0	%	$	233,293	100.0	%

10. DERIVATIVES AND RISK MANAGEMENT

Derivative Instruments. The primary risks managed by using derivative instruments are the fluctuations in global currencies that will ultimately be used by non-U.S. dollar functional currency subsidiaries to settle future payments of intercompany inventory transactions denominated in U.S. dollars. The Company’s derivative financial instruments consist of foreign currency forward contracts. The Company's policy is to enter into forward contracts for an agreed-upon exchange rate with terms that coincide with the underlying exposure being hedged for a period of up to 12 months. 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. For derivative instruments that are not designated as hedges, any changes in fair value are recognized in earnings when they occur.

As of April 4, 2026, the Company had the following outstanding non-designated forward contracts that were entered into to hedge future payments of inventory transactions (in millions):

Functional Currency

Contract Currency

Type

Amount

Type

Amount

Euro

22.4

U.S. dollar

26.0

Canadian dollar

21.8

U.S. dollar

16.0

Mexican peso

215.9

U.S. dollar

12.2

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 April 4, 2026		For the 14 Weeks Ended April 5, 2025
Cash flow hedges:
Forward contracts	$	—	$	140

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

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 April 4, 2026		For the 14 Weeks Ended April 5, 2025

Forward contracts designated as cash flow hedging instruments	Other income (expense)-net	Total gain (loss) reclassified from accumulated other comprehensive income (loss)	$	—	$	614
Forward contracts not designated as hedging instruments	Other income (expense)-net	Total gain (loss) recognized in income	$	431	$	18

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 April 4, 2026				For the 14 Weeks Ended April 5, 2025
	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	$	90,058	$	1,156	$	90,301	$	(3,268)
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
Forward contracts not designated as hedging instruments:
Total gain (loss) recognized in income	$	—	$	431	$	—	$	18

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.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of April 4, 2026 (in thousands):


	Fair Value at April 4, 2026
	Level 1		Level 2		Level 3		Total
Assets:
Forward contracts	$	—	$	637	$	—	$	637




Total	$	—	$	637	$	—	$	637
Liabilities:

Forward contracts	$	—	$	7	$	—	$	7

Total	$	—	$	7	$	—	$	7

The Company did not have any assets or liabilities measured at fair value on a recurring basis as of January 3, 2026.

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

As of April 4, 2026, the Company's First-Out Notes and Second-Out Notes (as defined in Note 15— Debt Activity), excluding unamortized debt issuance costs and original issue discount, were recorded at cost and had a carrying value of $185.1 million and their fair value approximated their carrying value. The Company's Revolving Credit Facility (as defined in Note 15—Debt Activity) was recorded at cost and had a carrying value of $33.0 million and its fair value approximated its carrying value. The fair values of the Company's First-Out Notes, Second-Out Notes and Revolving Credit Facility were based on Level 3 inputs.

During the First Quarter, operating lease right-of-use ("ROU") assets with a carrying amount of $0.1 million were deemed impaired, resulting in impairment charges of $0.1 million. During the Prior Year Quarter, 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.

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 First Quarter, $0.1 million was recorded in other long-lived asset impairments in the Americas segment. Of the $0.1 million impairment expense in the Prior Year Quarter, $0.1 million was recorded in other long-lived asset impairments in the Americas segment.

12. INTANGIBLE AND OTHER ASSETS

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


		April 4, 2026				January 3, 2026
	Useful	Gross		Accumulated		Gross		Accumulated
	Lives	Amount		Amortization		Amount		Amortization
Intangibles-subject to amortization:
Trademarks	10 yrs.	$	3,978	$	3,485	$	3,978	$	3,461

Patents	3 - 20 yrs.	850		599		850		594


Trade name	6 yrs.	4,502		4,502		4,502		4,502
Other	7 - 20 yrs.	278		258		278		252
Total intangibles-subject to amortization		9,608		8,844		9,608		8,809
Intangibles-not subject to amortization:
Trade names		8,433				8,433
Other assets:

Other deposits		13,970				14,246

Deferred tax asset-net		17,898				18,123
Restricted cash		1,792				2,352






Debt issuance costs		21,001				22,538
Other		2,266				2,505
Total other assets		56,927				59,764
Total intangible and other assets		$	74,968	$	8,844	$	77,805	$	8,809
Total intangible and other assets-net				$	66,124			$	68,996

Amortization expense for intangible assets was approximately $35 thousand and $40 thousand for the First Quarter and the Prior Year Quarter, respectively. Estimated aggregate future amortization expense by fiscal year for intangible assets is as follows (in thousands):


Fiscal Year	Amortization Expense
2026 (remaining)	$	103
2027	$	120
2028	$	114
2029	$	83
2030	$	72
Thereafter	$	272

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 April 4, 2026		For the 14 Weeks Ended April 5, 2025
Operating lease cost(1)	SG&A	$	13,517	$	14,705



Short-term lease cost	SG&A	$	55	$	166
Variable lease cost	SG&A	$	3,858	$	3,801

_______________________________________________

(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	April 4, 2026		January 3, 2026
Assets
Operating	Operating lease ROU assets	$	120,012	$	118,302


Liabilities
Current:
Operating	Current operating lease liabilities	$	34,441	$	34,768

Noncurrent:
Operating	Long-term operating lease liabilities	$	104,404	$	104,442

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

April 4, 2026

January 3, 2026

Weighted-average remaining lease term:

Operating leases

6.0 years

6.1 years

Weighted-average discount rate:

Operating leases

15.2

Future minimum lease payments by year as of April 4, 2026 were as follows (in thousands):


Fiscal Year	Operating Leases
2026 (remaining)	$	43,076
2027	43,126
2028	28,589
2029	24,363
2030	18,730
Thereafter	59,467

Total lease payments	$	217,351
Less: Interest	78,506
Total lease obligations	$	138,845

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


	For the 13 Weeks Ended April 4, 2026		For the 14 Weeks Ended April 5, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,955	$	19,381



Leased assets obtained in exchange for new operating lease liabilities	11,114		3,551

As of April 4, 2026, the Company did not have any material operating or finance leases that have been signed but not commenced.

15. DEBT ACTIVITY

Prior Revolving Facility: On September 26, 2019, the Company and certain subsidiaries entered into a secured asset-based revolving credit agreement (the "Prior Revolving Facility”) with various lenders party thereto.

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 “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 Prior 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 “Revolving Credit Facility”) in an aggregate principal amount of $150 million.

Borrowings under the Revolving Credit Facility bear interest at a rate of 5.00% plus the Adjusted Term SOFR Rate (as defined in the Credit Agreement) for term SOFR borrowings and 4.00% plus the Alternate Base Rate (as defined in the Credit Agreement), payable monthly in arrears. The Lenders received an upfront commitment fee equal to 2.00% of the aggregate commitments under the Revolving Credit Facility. The Company’s obligations under the Revolving Credit Facility are guaranteed by the guarantors, and those obligations and the guarantees are secured by substantially all of the assets of the Company and the guarantors. The Credit Agreement includes customary representations and warranties, covenants and events of default, in each case, applicable to the Company. The Credit Agreement also requires that Availability (as defined in the Credit Agreement) may at no time be less than the greater of 10% of the Line Cap (as defined in the Credit Agreement) and $12.5 million. If an event of default under the Credit Agreement occurs, the Required Lenders (as defined in the Credit Agreement) may, among other things, terminate the commitments and declare the outstanding obligations under the Credit Agreement to be immediately due and payable.

maturity date of material indebtedness (defined as $15.0 million or more of indebtedness) if such material indebtedness remains outstanding on such 91st day.

The maturity date of the First-Out Notes is January 1, 2029. If more than $15.0 million of First-Out Notes and other indebtedness (other than under the Credit Agreement) is outstanding on October 2, 2028, the maturity date of the Revolving Credit Facility will be October 2, 2028. The maturity date of the Second-Out Notes is June 30, 2029. If more than $15.0 million of Second-Out Notes and other indebtedness (other than under the Credit Agreement) is outstanding on March 31, 2029, the maturity date of the Revolving Credit Facility will be March 31, 2029.

Prior Notes: In November 2021, the Company sold $150.0 million aggregate principal amount of 7.00% senior notes due November 2026 (the “Prior Notes”).

On November 13, 2025, as a result of the Restructuring Plan (as defined herein), all $150.0 million aggregate principal amount of the Prior Notes were cancelled.

Notes: 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”) entered into a Transaction Support Agreement (the "Transaction Support Agreement”) with certain holders (the "Consenting Noteholders”), representing approximately 59% of the aggregate principal of the Prior Notes.

On November 13, 2025, the Company consummated the previously announced offer to exchange (the “Exchange Offer”) with respect to the Prior Notes and the concurrent rights offering (the “Rights Offering”) pursuant to a restructuring plan under Part 26A of the UK Companies Act 2006 (as amended) (the “Restructuring Plan” and together with the Exchange Offer and the Rights Offering, the “Transactions”) for First-Out Notes and Second-Out Notes (as defined herein, collectively the "Notes"). In connection with the consummation of the Transactions:

•Noteholders that participated in the Rights Offering and Exchange Offer (the “New Money Participants”) (i) provided an aggregate of $32.5 million of incremental, new money financing in exchange for (x) $32.5 million aggregate principal amount of 9.500% First-Out First Lien Secured Senior Notes due 2029 (the “First-Out Notes”) and (y) 954,070 shares of Common Stock, (ii) exchanged $120.2 million aggregate principal amount of Prior Notes on a dollar-for-dollar basis for $120.2 million aggregate principal amount of First-Out Notes, and (iii) received $0.9 million aggregate principal amount of First-Out Notes as a consent premium pursuant to the terms of the Transactions (the “Consent Premium”).

•Noteholders that did not participate in the Rights Offering (the “Non-New Money Participants”) (i) received $29.8 million aggregate principal amount of 7.500% Second-Out Second Lien Secured Senior Notes due 2029 (the “Second-Out Notes”) on a dollar-for-dollar basis for $29.8 million Prior Notes held by such Non-New Money Participants, and (ii) received $53,858 aggregate principal amount of Second-Out Notes as a Consent Premium. Only Non-New Money Participants that tendered their Prior Notes in the Exchange Offer and consented to the Restructuring Plan received the Consent Premium.

The Consenting Noteholders participated in the Transactions on a private placement basis. In accordance with the terms of the Transaction Support Agreement, the Consenting Noteholders received $1.6 million aggregate principal amount of First-Out Notes as a backstop premium as consideration for providing a backstop commitment for the Rights Offering.

The Notes are, respectively, subject to certain covenants (subject to certain exceptions and thresholds), including, without limitation, restrictions on the Company and the guarantors’ thereunder ability to:

•incur, assume or guarantee additional debt, or issue disqualified stock or preferred stock;

•pay dividends, make other distributions or repurchase equity;

•make certain investments and other restricted payments;

•enter into transactions with affiliates;

•create, incur, assume or suffer to exist liens;

•sell or otherwise dispose of certain assets to third parties;

•consolidate, merge or sell all or substantially all of their assets; and

•create restrictions on the ability of certain subsidiaries to pay dividends and make other payments to the Company or the guarantors.

The Notes are, respectively, subject to certain events of default (subject to certain exceptions and thresholds), including, without limitation:

•default in the payment of interest, principal or premium thereunder;

•breach of covenants or other agreements under the Notes;

•default under any mortgage, indenture or instrument securing indebtedness for borrowed money and such indebtedness is in the aggregate principal amount of at least $10.0 million;

•judgments exceeding $15.0 million;

•entry into bankruptcy or insolvency proceedings;

•nullification of certain guarantees;

•invalidity of a lien with respect to collateral with a fair market value exceeding $10.0 million; and

•solely with respect to the First-Out Notes, an event of default under the Credit Agreement or the invalidity of an intercreditor agreement.

The Company had net borrowings of $17.0 million under the Revolving Credit Facility during the First Quarter. As of April 4, 2026, the Company had available borrowing capacity of $28.1 million under the Revolving Credit Facility. Such amount is less than the $150 million total revolving commitments under the Revolving Credit Facility due to a reduction of borrowing capacity pursuant to the borrowing base. As of April 4, 2026, the Company had unamortized debt issuance costs of $16.9 million and original issue discount of $8.2 million recorded in long-term debt, and unamortized debt issuance costs of $21.0 million recorded in intangible and other assets-net on the Company's consolidated balance sheets. The Company incurred approximately $4.3 million and $0.3 million of interest expense related to the Notes and Revolving Credit Facility, respectively, during the First Quarter. The Company incurred approximately $3.4 million of interest expense related to the amortization of debt issuance costs and original issue discount during the First Quarter. At April 4, 2026, the Company was in compliance with all debt covenants related to its credit facilities. The First-Out Notes bear interest at a rate of 9.50% per annum. Interest on the First-Out Notes is payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year. The First-Out Notes mature on January 1, 2029. The Second-Out Notes bear interest at a rate of 7.50% per annum. Interest on the Second-Out Notes is payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year. The Second-Out Notes mature on June 30, 2029.

The Company may redeem the First-Out Notes at any time at a redemption price of 107.500%. The Company may redeem the Second-Out Notes at any time at a redemption price of 100.000%.

Fossil India Private Ltd. entered into 150 million Indian Rupee receivables buyout facilities with Kotak Mahindra Bank 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 $2.4 million as of April 4, 2026.

16. RESTRUCTURING

In fiscal 2024, the Company announced a plan to return to profitable growth (the "Turnaround Plan"). The Turnaround Plan was originally centered on three key areas: (i) refocusing on the core, (ii) rightsizing the cost structure, and (iii) strengthening the balance sheet. The Company achieved 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, the reduction in costs associated with the transition of smaller international markets to a distributor model, and the closing of 49 FOSSIL retail stores during fiscal 2025. Beginning in fiscal year 2026, the Company moved forward to a new chapter in its Turnaround Plan, with a focus on three new strategic pillars: (i) driving profitable growth, (ii) optimizing our operating model, and (iii) building shareholder value. The Company incurred $41 million and $7 million in charges under the Turnaround Plan in fiscal years 2025 and 2024, respectively, and expects to incur approximately $15 million in charges in fiscal year 2026 as it completes the plan.

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


	For the 13 Weeks Ended April 4, 2026		For the 14 Weeks Ended April 5, 2025

Restructuring expenses	2,034		15,821
Consolidated	$	2,034	$	15,821

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


	For the 13 Weeks Ended April 4, 2026		For the 14 Weeks Ended April 5, 2025
Americas	$	538	$	598
Europe	124		2,011
Asia	(175)		443
Corporate	1,547		12,769
Consolidated	$	2,034	$	15,821

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


	For the 13 Weeks Ended April 4, 2026
	Liabilities								Liabilities
	January 3, 2026		Charges		Cash Payments		Non-cash Items		April 4, 2026
Store closures	$	—	$	16	$	—	$	16	$	—
Professional services and other	5,561		769		1,791		—		4,539
Severance and employee-related benefits	6,268		1,249		4,884		—		2,633

Total	$	11,829	$	2,034	$	6,675	$	16	$	7,172


	For the 14 Weeks Ended April 5, 2025
	Liabilities								Liabilities
	December 28, 2024		Charges		Cash Payments		Non-cash Items		April 5, 2025
Store closures	$	—	$	10	$	—	$	10	$	—
Professional services	—		6,485		1,145		—		5,340
Severance and employee-related benefits	—		9,326		1,934		49		7,343

Total	$	—	$	15,821	$	3,079	$	59	$	12,683

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 rollforward of the accrued liability related to the Company’s TAG plan (in thousands):


	For the 14 Weeks Ended April 5, 2025
	Liabilities				Liabilities
	December 28, 2024		Cash Payments		April 5, 2025
Store closures	$	1	$	1	$	—
Professional services	9,501		6,529		2,972
Severance and employee-related benefits	7,341		6,712		629
Charges related to exits of certain product offerings	300		—		300
Total	$	17,143	$	13,242	$	3,901

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

The following is a discussion of the financial condition and results of operations of Fossil Group, Inc. and its subsidiaries for the thirteen week period ended April 4, 2026 (the “First Quarter”) as compared to the fourteen week period ended April 5, 2025 (the “Prior Year Quarter”). 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 2025. In fiscal 2025, we generated 32.6% 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. Throughout 2025, U.S. trade policies experienced rapid changes and significant volatility, including tariff increases imposed under multiple legal authorities and retaliatory actions by foreign countries. In February 2026, the Supreme Court of the United States held that the President of the United States is not authorized to impose tariffs under the International Economic Emergency Powers Act (“IEEPA”), resulting in the elimination of certain higher tariff rates against most major trading partners, including China. Following that ruling, the U.S. Court of International Trade ("CIT") issued an order directing the U.S. Customs and Border Protection ("CBP") to process refunds of the IEEPA tariffs. The CBP is proceeding with a phased rollout of refunds. Any potential recovery of IEEPA tariffs represents a loss recovery. The Company submitted claims that were accepted under Phase I of the IEEPA refund process in the amount of $5.9 million and a corresponding refund receivable was recorded within prepaid expenses and other current assets in the Company's balance sheets as of April 4, 2026. Of the $5.9 million, $4.0 million, $0.9 and $1.0 million were recorded as reductions of cost of sales, SG&A and inventories, respectively. There is still uncertainty regarding the timing and process of Phase II of the refund process. As of April 4, 2026, the Company has not recognized any receivable or loss recovery related to Phase II refunds of IEEPA tariffs because the realization of any recovery is dependent on future events, and the Company cannot conclude that recovery is probable as of the date of this quarterly report; however, it is reasonably possible that additional potential refunds of IEEPA tariffs could be material.

Additionally, after the Supreme Court ruling in February, the U.S. administration almost immediately instituted new tariffs against most major trading partners, and has previewed future actions that could restore or exceed the level of the IEEPA tariffs. Future adverse effects on our financial results will likely continue if tariff levels persist, continue to rise, or remain volatile, 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 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 of ongoing and emerging military conflicts, including the conflict between Russia and Ukraine, as well as heightened tensions and recent military actions in the Middle East, such as U.S. and Israeli strikes on Iran, and subsequent retaliatory actions by Iran. We have no operations in Russia or Iran, and limited operations in Ukraine, Israel and the broader Middle East, all of which are primarily conducted through third-party distributors. While our direct exposure in these regions is limited, new conflicts, the continuation of the current military conflicts or an escalation of the conflicts beyond their current scope may have a number of impacts, including, but not limited to, higher fuel prices, a weakening of the global economy and negative consumer confidence, and could also result in additional inflationary pressures and supply chain constraints. We will continue to monitor developments and assess any material impacts on our business, operations, or financial results.

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 (including AI-enabled or AI-driven 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 frequently shifting U.S. tariffs and trade policies.

In September 2024, we appointed Franco Fogliato Chief Executive Officer and a member of the Board and moved quickly to implement change and create a plan to return the Company to profitable growth (the "Turnaround Plan"). Our Turnaround Plan was originally centered on three key areas: (i) refocusing on our core, (ii) rightsizing our cost structure, and (iii) strengthening our balance sheet. For 2026 and beyond, we are progressing our Turnaround Plan, with a focus on three new strategic pillars: (i) driving profitable growth, (ii) optimizing our operating model, and (iii) building shareholder value. Over the next three years, this evolution of our strategic turnaround pillars is expected to generate a return to top line growth, and improved operating margins and free cash flows.

As part of our driving profitable growth initiative, we plan to further leverage the FOSSIL brand platform to propel innovation, deepen consumer engagement through storytelling, and drive the traditional watch business with focus on icons and collaborations, as well as developing premium products including those assembled in America. Driving profitable growth initiatives will also include modernizing point of sale expression, focusing on top customers in key markets, stabilizing our e-commerce business through investments in search and navigation, and reducing the pace of store closures.

Our second strategic pillar, optimizing our operating model, is focused on (i) sharpening our go-to-market execution to elevate point of sale engagement, reduce complexity and improve business agility, (ii) strengthening our digital and technology infrastructure, (iii) delivering best-in-class supply chain performance and (iv) establishing an emerging brands organization to institutionalize entrepreneurship and build the next scalable growth brand in our portfolio.

Under our third strategic pillar, building shareholder value, we plan to generate improved free cash flow from operations, strategically deploy capital toward investing for growth and reducing debt, and deliver strong returns on invested capital.

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 January 3, 2026.

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 92 Company-owned stores as of the end of the First 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 47 Company-owned stores as of the end of the First 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 54 Company-owned stores as of the end of the First 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.

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, and restructuring expense minus IEEPA refund claims for tariffs incurred in the prior year and interest income. We define Adjusted operating income (loss) as operating income (loss) before impairment expense, restructuring and IEEPA refund claims for tariffs incurred in the prior year. We define Constant currency adjusted operating income (loss) as operating income (loss) before impairment expense, restructuring expense and IEEPA refund claims for tariffs incurred in the prior year 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 and IEEPA refund claims for tariffs incurred in the prior year. 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.

The non-GAAP 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 non-GAAP financial information and the most directly comparable GAAP measure are included where applicable.

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 14-week Prior Year Quarter with the 13-week First Quarter. 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 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. 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 April 4, 2026 and April 5, 2025

Consolidated Net Sales. Net sales decreased $8.5 million, or 3.6% (6.5% in constant currency), for the First Quarter as compared to the Prior Year Quarter, with sales decreases in all three regions. Sales were unfavorably impacted 690 basis points as a result of the First Quarter including 13 weeks as compared to 14 weeks in the Prior Year Quarter. Our store rationalization initiatives and declines in our smartwatch sales comprised approximately 280 basis points of the sales decline in the First Quarter. Wholesale sales increased 7.9% (4.9% in constant currency). Direct to consumer sales declined by 26.5% (29.1% in constant currency). We have reduced our store footprint by 27 stores (12.3%), since the end of the Prior Year Quarter. Global comparable retail sales decreased 14.6%, largely due to being less promotional in our owned e-commerce channel. From a category perspective, traditional watch sales increased 2.3% (decreased 0.5% in constant currency). Net sales in smartwatches decreased 57.5% (57.1% in constant currency), as we exited the category. The leathers category decreased 38.4% (40.7% in constant currency), and jewelry sales decreased 9.9% (14.3% in constant currency). From a brand perspective, sales growth in ARMANI EXCHANGE, MICHAEL KORS and DIESEL was more than offset by declines in FOSSIL brand sales.

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


	For the 13 Weeks Ended April 4, 2026				For the 14 Weeks Ended April 5, 2025				Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Americas	$	96.8	43.1	%	$	97.7	41.9	%	$	(0.9)	(0.9)	%	(2.8)	%
Europe	71.5		31.8		77.3		33.1		(5.8)		(7.5)		(14.5)
Asia	56.0		24.9		57.4		24.6		(1.4)		(2.4)		(1.4)
Corporate	0.5		0.2		0.9		0.4		(0.4)		(44.4)		(55.6)
Total	$	224.8	100.0	%	$	233.3	100.0	%	$	(8.5)	(3.6)	%	(6.5)	%

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


	For the 13 Weeks Ended April 4, 2026				For the 14 Weeks Ended April 5, 2025
									Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Watches:
Traditional watches	188.8		84.0	%	$	184.6	79.1	%	$	4.2	2.3	%	(0.5)	%
Smartwatches	1.7		0.8		4.0		1.7		(2.3)		(57.5)		(57.1)
Total watches	$	190.5	84.8	%	$	188.6	80.8	%	$	1.9	1.0		(1.7)
Leathers	10.6		4.7		17.2		7.4		(6.6)		(38.4)		(40.7)
Jewelry	20.1		9.0		22.3		9.5		(2.2)		(9.9)		(14.3)
Other	3.6		1.5		5.2		2.3		(1.6)		(30.8)		(34.6)
Total	$	224.8	100.0	%	$	233.3	100.0	%	$	(8.5)	(3.6)	%	(6.5)	%

In the First Quarter, the translation of foreign-based net sales into U.S. dollars increased reported net sales by $6.7 million (2.9%) as compared to the Prior Year Quarter, including favorable impacts of $5.4 million and $1.8 million in Europe and Americas segments, respectively, and an unfavorable impact of $0.6 million in the Asia segment.

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


	April 5, 2025	Opened	Closed	April 4, 2026
Americas	102	0	10	92
Europe	55	0	8	47
Asia	63	1	10	54
Total stores	220	1	28	193

Americas Net Sales. Americas net sales decreased $0.9 million, or 0.9% (2.8% in constant currency), during the First Quarter in comparison to the Prior Year Quarter. Sales decreases were largely in the FOSSIL brand, and partially offset by other brands in our portfolio. Sales declined in our e-commerce and store channels, while wholesale sales increased. Comparable retail sales decreased moderately during the First Quarter, largely due to less promotional activity in our owned e-commerce channel.

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 April 4, 2026				For the 14 Weeks Ended April 5, 2025
									Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Watches:
Traditional watches	$	84.0	86.8	%	$	78.0	79.8	%	$	6.0	7.7	%	5.5	%
Smartwatches	1.6		1.7		2.9		3.0		(1.3)		(44.8)		(44.8)
Total watches	$	85.6	88.5	%	$	80.9	82.8	%	$	4.7	5.8		3.7
Leathers	6.0		6.2		9.7		9.9		(3.7)		(38.1)		(39.2)
Jewelry	3.8		3.9		5.4		5.5		(1.6)		(29.6)		(29.6)
Other	1.4		1.4		1.7		1.8		(0.3)		(17.6)		(17.6)
Total	$	96.8	100.0	%	$	97.7	100.0	%	$	(0.9)	(0.9)	%	(2.8)	%

Europe Net Sales. Europe net sales decreased $5.8 million, or 7.5% (14.5% in constant currency), during the First Quarter in comparison to the Prior Year Quarter. Our sales decreased across much of the Eurozone. Sales declined in all major channels. Comparable retail sales decreased sharply during the First Quarter, due to less promotional activity in our owned e-commerce business.

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 April 4, 2026				For the 14 Weeks Ended April 5, 2025
									Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Watches:
Traditional watches	$	57.6	80.6	%	$	60.2	77.9	%	$	(2.6)	(4.3)	%	(11.3)	%
Smartwatches	(0.1)		(0.1)		0.8		1.0		(0.9)		(112.5)		(112.5)
Total watches	$	57.5	80.5	%	$	61.0	78.9	%	$	(3.5)	(5.7)		(12.5)
Leathers	1.6		2.2		2.2		2.8		(0.6)		(27.3)		(36.4)
Jewelry	11.3		15.8		12.2		15.8		(0.9)		(7.4)		(15.6)
Other	1.1		1.5		1.9		2.5		(0.8)		(42.1)		(47.4)
Total	$	71.5	100.0	%	$	77.3	100.0	%	$	(5.8)	(7.5)	%	(14.5)	%

Asia Net Sales. Net sales in Asia decreased $1.4 million, or 2.4% (1.4% in constant currency), during the First Quarter in comparison to the Prior Year Quarter. The sales decreases were largely driven by Greater China and partially offset by sales increases in India. The largest sales decreases were in the EMPORIO ARMANI brand partially offset by MICHAEL KORS brand sales increases. Sales declined in our e-commerce and store channels, while wholesale sales increased. Comparable retail sales increased slightly during the First Quarter, driven by sales increases in our retail stores largely offset by decreases in our e-commerce business due to less promotional activity.

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 April 4, 2026				For the 14 Weeks Ended April 5, 2025
									Growth (Decline)
	Net Sales		Percentage of Total		Net Sales		Percentage of Total		Dollars		Percentage As Reported		Percentage Constant Currency
Watches:
Traditional watches	$	47.2	84.3	%	$	46.4	80.8	%	$	0.8	1.7	%	3.2	%
Smartwatches	0.2		0.4		0.3		0.5		(0.1)		(33.3)		(33.3)
Total watches	$	47.4	84.7	%	$	46.7	81.3	%	$	0.7	1.5		3.0
Leathers	3.1		5.5		5.2		9.1		(2.1)		(40.4)		(44.2)
Jewelry	5.0		8.9		4.7		8.2		0.3		6.4		6.4
Other	0.5		0.9		0.8		1.4		(0.3)		(37.5)		(25.0)
Total	$	56.0	100.0	%	$	57.4	100.0	%	$	(1.4)	(2.4)	%	(1.4)	%

Gross Profit. Gross profit of $134.7 million in the First Quarter decreased 5.8% in comparison to $143.0 million in the Prior Year Quarter. Our gross profit margin rate decreased to 59.9% in the First Quarter compared to 61.3% in the Prior Year Quarter. The year-over-year decrease in the First Quarter as compared to the Prior Year Quarter primarily reflects increased tariffs and the accelerated timing of licensed brand minimum royalty recognition. These headwinds were partially offset by tariff refund claims recorded in the First Quarter, which contributed positively to the margin by $4.0 million, including $2.8 million related to tariffs incurred in fiscal year 2025.

Operating Expenses. Total operating expenses in the First Quarter decreased to $122.7 million or 54.6% of net sales, in comparison to $149.7 million or 64.2% of net sales in the Prior Year Quarter. SG&A expenses were $120.6 million in the First Quarter compared to $133.8 million in the Prior Year Quarter. As a percentage of net sales, SG&A expenses decreased to 53.6% in the First Quarter as compared to 57.4% in Prior Year Quarter, primarily driven by cost reductions and efficiencies gained through our restructuring programs. SG&A also benefited from tariff refund claims recorded during the First Quarter, decreasing SG&A by $0.9 million, including $0.8 million related to tariffs incurred in fiscal year 2025. Operating expenses in the First Quarter included $2.0 million of restructuring costs, primarily related to employee costs and professional services, while the Prior Year Quarter included $15.8 million in restructuring costs.

Operating Income (Loss). Operating income in the First Quarter was $12.0 million as compared to an operating loss of $6.7 million in the Prior Year Quarter. The operating income improvement was primarily driven by decreased operating expenses and partially offset by decreased sales and a decreased gross profit margin rate. As a percentage of net sales, operating margin was 5.4% in the First Quarter and (2.9)% the Prior Year Quarter. Operating margin rate in the First Quarter included a favorable impact of 20 basis points due to changes in foreign currencies.

Operating income (loss) by segment is summarized as follows (dollars in millions):


	For the 13 Weeks Ended April 4, 2026		For the 14 Weeks Ended April 5, 2025		Change				Operating Margin %
					Dollars		Percentage		2026		2025
Americas	$	27.7	$	24.2	$	3.5	14.5	%	28.7	%	24.8	%
Europe	16.1		16.8		(0.7)		(4.2)		22.5		21.7
Asia	15.6		15.3		0.3		2.0		27.8		26.7
Corporate	(47.4)		(63.0)		15.6		24.8
Total operating income (loss)	$	12.0	$	(6.7)	$	18.7	279.1	%	5.4	%	(2.9)	%

Interest Expense. Interest expense was $8.5 million in the First Quarter in comparison to $4.5 million in the Prior Year Quarter due to increased debt issuance cost amortization, higher debt balances and increased interest rates.

Other Income (Expense)-Net. During the First Quarter, other income (expense)-net was income of $1.2 million in comparison to expense of $3.3 million in the Prior Year Quarter. This change was primarily driven by net foreign currency gains in the First Quarter as compared to net foreign currency losses in the Prior Year Quarter.

Provision for Income Taxes. Income tax expense for the First Quarter was $5.4 million, resulting in an effective income tax rate of 114.2%. For the Prior Year Quarter, income tax expense was $3.4 million, resulting in an effective income tax rate of (23.3)%. The effective tax rate in the First Quarter was unfavorable as compared to the Prior Year Quarter due to the accrual of foreign income tax on certain foreign entities with positive income; with an overall U.S. loss. No tax benefit has been accrued on the First Quarter U.S. tax losses and certain foreign tax losses due to the uncertainty of whether they can be used in the future.

Net Income (Loss) Attributable to Fossil Group, Inc. First Quarter net income (loss) attributable to Fossil Group, Inc. was a net loss of $0.8 million, or $0.01 per diluted share, in comparison to a net loss of $17.6 million, or $0.33 per diluted share, in the Prior Year Quarter. During the First Quarter, currencies favorably affected diluted earnings (loss) per share by approximately $0.10, when compared to the Prior Year Quarter.

Adjusted EBITDA. The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure, which is income (loss) before income taxes. Certain line items presented in the table below, when aggregated, may not foot due to rounding (dollars in millions).


	For the 13 Weeks Ended April 4, 2026				For the 14 Weeks Ended April 5, 2025
	Dollars		% of Net Sales		Dollars		% of Net Sales
Income (loss) before income taxes	$	4.8	2.1	%	$	(14.5)	(6.2)	%
Plus:
Interest expense	8.5				4.5
Amortization and depreciation	1.8				3.4
Other long-lived asset impairments	0.1				0.1
Other non-cash charges	0.3				0.2
Stock-based compensation	0.7				0.6
Restructuring expenses	2.0				15.8


Less:
IEEPA tariff refund claims	3.6				—
Interest income	0.1				1.0
Adjusted EBITDA	$	14.5	6.5	%	$	9.1	3.9	%

Adjusted Operating Income (Loss), Constant Currency Adjusted Operating Income (Loss), Adjusted Net Income (Loss) and Adjusted Earnings (Loss) per Share. The following tables reconcile both Adjusted operating income (loss) and Constant currency adjusted operating income (loss), Adjusted net income (loss) and Adjusted earnings (loss) per share to the most directly comparable GAAP financial measures, which are operating income (loss), net income (loss) attributable to Fossil Group, Inc. and diluted earnings (loss) per share, respectively. Certain line items presented in the table below, when aggregated, may not foot due to rounding.


	For the 13 Weeks Ended April 4, 2026
($ in millions, except per share data):	As Reported			Other Long-Lived Asset Impairment		Restructuring Expenses		IEEPA Tariff Refund Claims		As Adjusted			Impact of Foreign Currency Exchange Rates		Constant Currency As Adjusted
Operating income (loss)	$	12.0		$	0.1	$	2.0	$	(3.6)	$	10.5		$	(1.0)	$	9.5
Operating margin (% of net sales)	5.4		%							4.7		%			4.4		%
Interest expense	8.5			—		—		—		8.5
Other income (expense) - net	1.2			—		—		—		1.2
Income (loss) before income taxes	4.8			0.1		2.0		(3.6)		3.3
Provision (benefit) for income taxes	5.4			—		0.4		(0.8)		5.0
Less: net income attributable to noncontrolling interest	0.1			—		—		—		0.1
Net income (loss) attributable to Fossil Group, Inc.	$	(0.8)		$	0.1	$	1.6	$	(2.8)	$	(1.9)
Diluted earnings (loss) per share	$	(0.01)		$	—	$	0.03	$	(0.05)	$	(0.03)


	For the 14 Weeks Ended April 5, 2025
($ in millions, except per share data):	As Reported			Other Long-Lived Asset Impairment		Restructuring Expenses		As Adjusted
Operating income (loss)	$	(6.7)		$	0.1	$	15.8	$	9.2
Operating margin (% of net sales)	(2.9)		%					3.9		%
Interest expense	4.5			—		—		4.5
Other income (expense) - net	(3.3)			—		—		(3.3)
Income (loss) before income taxes	(14.5)			0.1		15.8		1.4
Provision (benefit) for income taxes	3.4			—		3.3		6.7
Less: net income attributable to noncontrolling interest	(0.3)			—		—		(0.3)
Net income (loss) attributable to Fossil Group, Inc.	$	(17.6)		$	0.1	$	12.5	$	(5.0)
Diluted earnings (loss) per share	$	(0.33)		$	—	$	0.23	$	(0.10)

Liquidity and Capital Resources

Our cash and cash equivalents balance at the end of the First Quarter was $81.4 million, including $63.4 million held by foreign subsidiaries, in comparison to cash and cash equivalents of $78.3 million at the end of the Prior Year Quarter and $95.8 million at the end of fiscal year 2025. Generally, starting in the third quarter, our cash needs begin to increase, typically reaching a peak in the September-November time frame as we increase inventory levels in advance of the holiday season. Our quarterly cash requirements are also impacted by debt repayments, restructuring charges and capital expenditures.

At the end of the First Quarter, we had net working capital of $182.5 million compared to net working capital of $219.9 million at the end of the Prior Year Quarter. At the end of the First Quarter, we had $2.3 million of short-term borrowings and $193.0 million in long-term debt including unamortized issuance costs compared to $12.3 million of short-term borrowings and $167.2 million in long-term debt including unamortized issuance costs at the end of the Prior Year Quarter.

Operating Activities. Cash used in operating activities is net income (loss) adjusted for certain non-cash items and changes in assets and liabilities. Cash used in operating activities decreased by $38.6 million in the First Quarter as compared to the Prior Year Quarter. This improvement was primarily driven by a $17.2 million reduction in net loss and a $23.0 million decrease in cash outflows related to working capital.

Investing Activities. Investing cash flows primarily consist of capital expenditures and partially offset by decreases in other assets.

Financing Activities. Financing cash flows primarily consist of borrowings and repayments of debt. Financing cash flows increased in the First Quarter primarily due to $15.4 million of net debt borrowings during the First Quarter as compared to $14.2 million of net debt borrowings in the Prior Year Quarter.

Material Cash Requirements. We have various payment obligations as part of our ordinary course of business. Our material cash requirements include: (1) operating lease obligations (see "Note 14—Leases" within the Consolidated Financial Statements); (2) debt repayments (see "Note 15—Debt Activity" within the Consolidated Financial Statements); (3) non-cancellable purchase obligations; (4) minimum royalty payments; and (5) employee wages, benefits, and incentives. The expected timing of payments of our obligations is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on the timing of receipt of goods or services, or changes to agreed-upon amounts for some obligations. In addition, some of our purchasing requirements are not current obligations and are therefore not included above. For example, some of these requirements are not handled through binding contracts or are fulfilled by vendors on a purchase order basis within short time horizons. Moreover, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions (see "Note 5—Income Taxes" within the Consolidated Financial Statements) and other matters.

For fiscal year 2026, we expect total capital expenditures to be approximately $9.0 million. Our capital expenditure budget is an estimate and is subject to change.

Sources of Liquidity. We believe cash flows from operations combined with existing cash on hand and amounts available under our credit facilities will be sufficient to fund our cash needs for at least the next twelve months. Although we believe we have adequate sources of liquidity, we continue to assess our liquidity position and potential sources of supplemental liquidity in light of our operating performance, the timing of the expected benefits of our Turnaround Plan and other relevant considerations, including macroeconomic events, recessionary risks and tariffs. In the event our liquidity is insufficient, we may be required to limit our spending or sell assets.

The following table shows our sources of liquidity (in millions):


	April 4, 2026		April 5, 2025
Cash and cash equivalents	$	81.4	$	78.3
Revolving Credit Facility availability	28.1		21.2
Total liquidity	$	109.5	$	99.5

Prior Notes: In November 2021, we sold $150.0 million aggregate principal amount of our 7.00% senior notes due 2026 (the "Prior Notes"), generating net proceeds of approximately $141.7 million. The Prior Notes were our general unsecured obligations. The Prior Notes bore interest at the rate of 7.00% per annum. See "Notes Exchange" below for information regarding the restructuring of the Prior Notes. On November 13, 2025, as a result of the Restructuring Plan, all $150.0 million aggregate principal amount of the Prior Notes were cancelled.

Notes Exchange: On August 13, 2025, we, Fossil (UK) Global Services Ltd. ("Fossil UK”), and certain direct and indirect subsidiaries of ours identified therein (collectively, the "Parties”) entered into a Transaction Support Agreement (the "Transaction Support Agreement”) with certain holders (the "Consenting Noteholders”), representing approximately 59% of the aggregate principal of the Prior Notes.

On November 13, 2025, we consummated the previously announced offer to exchange (the “Exchange Offer”) with respect to the Prior Notes and the concurrent rights offering (the “Rights Offering”) pursuant to a restructuring plan under Part 26A of the UK Companies Act 2006 (as amended) (the “Restructuring Plan” and together with the Exchange Offer and the Rights Offering, the “Transactions”). In connection with the consummation of the Transactions:

•Noteholders that participated in the Rights Offering and Exchange Offer (the “New Money Participants”) (i) provided an aggregate of $32.5 million of incremental, new money financing in exchange for (x) $32.5 million aggregate principal amount of 9.500% First-Out First Lien Secured Senior Notes due 2029 (the “First-Out Notes”) and (y) 954,070 shares of common stock, par value $0.01 (“Common Stock”), (ii) exchanged $120.2 million aggregate principal amount of Prior Notes on a dollar-for-dollar basis for $120.2 million aggregate principal amount of First-Out Notes, and (iii) received $0.9 million aggregate principal amount of First-Out Notes as a consent premium pursuant to the terms of the Transactions (the “Consent Premium”).

•Noteholders that did not participate in the Rights Offering (the “Non-New Money Participants”) (i) received $29.8 million aggregate principal amount of 7.500% Second-Out Second Lien Secured Senior Notes due 2029 (the “Second-Out Notes”) on a dollar-for-dollar basis for $29.8 million aggregate principal amount of Prior Notes held by such Non-New Money Participants, and (ii) received $53,858 aggregate principal amount of Second-Out Notes as a Consent Premium. Only Non-New Money Participants that tendered their Prior Notes in the Exchange Offer and consented to the Restructuring Plan received the Consent Premium.

•Noteholders also received an aggregate total of approximately 3,000,000 warrants (the “Warrants”), entitling the holders thereof to purchase either (i) one share of Common Stock for each Warrant held, or (ii) one pre-funded warrant (each, a “Pre-Funded Warrant”) for each Warrant held, each such Pre-Funded Warrant entitling the holder thereof to purchase one share of Common Stock. The Warrants were exercisable at any time prior to 5:00 p.m., New York City time, on December 15, 2025. The number of Warrants exercised as of January 3, 2026 was 2.6 million with the remainder of the 3.0 million Warrants forfeited.

Prior Revolving Facility: On September 26, 2019, we and certain subsidiaries entered into a secured asset-based revolving credit agreement (as amended from time to time, the “Prior Revolving Facility”) with various lenders party thereto.

Revolving Credit Facility: On August 13, 2025, we and certain of our subsidiaries identified therein as guarantors entered into the Credit Agreement with the Lenders, the Administrative Agent and the Company as a borrower (the “Credit Agreement”) to refinance the Prior 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 “Revolving Credit Facility”) in an aggregate principal amount of $150 million.

Contemporaneously with entering into the Revolving Credit Facility, the proceeds of the Revolving Credit Facility were used to pay off in full the $15.0 million outstanding under the Prior Revolving Facility.

Borrowings under the Revolving Credit Facility bear interest at a rate of 5.00% plus the Adjusted Term SOFR Rate (as defined in the Credit Agreement) for term SOFR borrowings and 4.00% plus the Alternate Base Rate (as defined in the Credit Agreement) for base rate borrowings, payable monthly in arrears. The Lenders received an upfront commitment fee equal to 2.00% of the aggregate commitments under the Revolving Credit Facility. The Company’s obligations under the Revolving Credit Facility are guaranteed by the guarantors, and those obligations and the guarantees are secured by substantially all of the assets of the Company and the guarantors. The Credit Agreement includes customary representations and warranties, covenants and events of default, in each case, applicable to the Company. The Credit Agreement also requires that Availability (as defined in the Credit Agreement) may at no time be less than the greater of 10% of the Line Cap (as defined in the Credit Agreement) and $12.5 million. If an event of default under the Credit Agreement occurs, the Required Lenders (as defined in the Credit Agreement) may, among other things, terminate the commitments and declare the outstanding obligations under the Credit Agreement to be immediately due and payable.

The maximum amount that we are permitted to borrow at any time under the Revolving Credit Facility is limited by a borrowing base that is recalculated monthly or, in some circumstances, more frequently. The borrowing base is a function of, among other things, our eligible accounts receivable, inventory and certain intellectual property. The Credit Agreement provides the administrative agent with considerable discretion to impose reserves and to determine that certain assets are not eligible for inclusion in our borrowing base.

The Revolving Credit Facility has a stated maturity date of August 13, 2030, but includes a springing maturity feature (the “Springing Maturity Feature”) that will cause the stated maturity date to spring ahead to the date that is 91 days prior to the maturity date of material indebtedness (defined as $15.0 million or more of indebtedness) if such material indebtedness remains outstanding on such 91st day.

First Quarter Activity: We had net borrowings of $17.0 million under the Revolving Facility during the First Quarter at an average interest rate of 9.0%. As of April 4, 2026, we had $185.1 million outstanding under the Notes and $33.0 million outstanding under the Revolving Credit Facility. We also had unamortized debt issuance costs of $16.9 million and original issue discount of $8.2 million recorded in long-term debt and $21.0 million recorded in intangible and other assets-net on the condensed consolidated balance sheets. As of April 4, 2026, we had available borrowing capacity of $28.1 million under the Revolving Credit Facility. At April 4, 2026, we were in compliance with all debt covenants related to our credit facilities.

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 $2.4 million as of April 4, 2026.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires us 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. On an on-going basis, we evaluate our estimates and judgments, including those related to product returns, inventories, long-lived asset impairment, impairment of trade names, income taxes and warranty costs. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Our estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There have been no changes to the critical accounting policies and estimates disclosed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026.

Forward-Looking Statements

The statements contained in this Quarterly Report on Form10-Q that are not historical facts, including, but not limited to, statements regarding our expected financial position, results of operations, liquidity, business, financial outlook, Turnaround Plan, future events and known or anticipated trends found in this "Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations," constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The words "may," "believes," "will," "should," "seek," "forecast," "outlook," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "predict," "potential," "plan," "expect" or the negative or plural of these words or similar expressions identify forward-looking statements. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: increased political uncertainty; acts of war, military actions or acts of terrorism; the effect of worldwide economic conditions; lower levels of consumer spending resulting from inflation, a general economic downturn or generally reduced shopping activity caused by public safety or consumer confidence concerns; government regulation and tariffs; risks related to the success of our Turnaround Plan and goals; significant changes in consumer spending patterns or preferences; interruptions or delays in the supply of key components or products; the termination or non-renewal of significant license agreements; loss or shut down of key facilities; a data security or privacy breach or information systems disruptions; changes in foreign currency valuations in relation to the U.S. dollar; compliance with debt covenants and other contractual provisions and meeting debt service obligations; risks related to the success of our business strategy; impact of any minimum royalty commitments in excess of royalties payable on actual sales; risks related to foreign operations and manufacturing; the effect of any pandemic; changes in the costs of materials and labor; levels of traffic to and management of our retail stores; loss of key personnel or failure to attract and retain key employees and the outcome of current and possible future litigation.

In addition to the factors listed above, our actual results may differ materially due to the other risks and uncertainties discussed in our Quarterly Reports on Form 10-Q and the risks and uncertainties set forth in our Annual Report on Form 10-K

for the fiscal year ended January 3, 2026. Accordingly, readers of this Quarterly Report on Form 10-Q should consider these facts in evaluating the information and are cautioned not to place undue reliance on the forward-looking statements contained herein. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of our “disclosure controls and procedures” (“Disclosure Controls”), as defined by Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this Quarterly Report on Form 10-Q. The Disclosure Controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based upon this evaluation, our CEO and CFO have concluded that our Disclosure Controls were effective as of April 4, 2026.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the First Quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

There are no legal proceedings to which we are a party or to which our properties are subject, other than routine matters incidental to our business that are not material to our consolidated financial condition, results of operations or cash flows.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors contained in Item 1A. “Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended January 3, 2026 and in other documents we file with the Securities and Exchange Commission, in evaluating the Company and its business. Except as set forth below, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026.

Operational Risks

Tariffs or other restrictions placed on imports from China and any retaliatory trade measures taken by China could materially harm our revenue and results of operations.

Beginning in July 2018, certain of our products have been subject to additional ad valorem duties imposed by the U.S. government on products of China under Section 301 of the Trade Act of 1974 (“Section 301”) and the International Economic Emergency Powers Act ("IEEPA").

The Section 301 tariffs were imposed via four successive “Lists” and were first the result of an April 2018 determination by the Office of the U.S. Trade Representative (“USTR”) that China’s acts, practices, and policies with respect to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce. Certain of our packaging and handbag products have been subject to an additional 25% ad valorem tariff since July 2018 (“List 1”). Certain of our handbag and wallet products were subject to an additional 10% ad valorem tariff beginning in September 2018, a rate that was then raised to 25% ad valorem from June 2019 to present (“List 3”). Finally, smartwatches, certain jewelry products, and several of our traditional watch products were subject to an additional 15% ad valorem tariff beginning in September 2019, a rate that was lowered to 7.5% ad valorem from February 2020 to present (“List 4A”).

The IEEPA tariffs on China were originally imposed in two executive actions beginning in February and April 2025, with varying rates over the course of 2025. On February 20, 2026, the Supreme Court of the United States held that all tariffs imposed based on IEEPA were unlawful, including the two IEEPA actions that resulted in higher rates on products of China. As a result, these higher IEEPA rates were terminated as of February 24, 2026. We have begun participating in the administrative process set up by U.S. Customs and Border Protection in response to court orders to request refunds of IEEPA duties paid.

Meanwhile, new tariffs on products of China take the form of an action under Section 122 of the Trade Act of 1974 (“Section 122”), which currently includes a 10% ad valorem rate as of February 24, 2026. This action is time-limited by statute, and the rates are currently planned to be in effect through July 24, 2026. The administration has announced that it may raise this rate to the maximum allowed under the statute, so in the near term, we may see an increase to 15% ad valorem under this action. Our products sourced from China are subject to these Section 122 tariffs, in addition to the Section 301 tariffs above. The administration has also announced that it intends to conduct additional investigations against most major trading partners under Section 301 and other tariff authorities that may lead to higher, more permanent rates.

We continue to monitor tariff developments that pose potential risks. In this fast-paced international trade environment, we also monitor developments for any negotiated resolutions to offset some of the tariff exposure.

We have joined litigation before the U.S. Court of International Trade challenging the legality of the Section 301 List 3 and List 4A tariffs and seeking refunds of duties paid on imports that were subject to those tariffs. That litigation is ongoing in the appeal stages.

If the tariffs continue or increase, we may be required to raise our prices, which may result in the loss of customers and harm our operating performance. Alternatively, we may seek to shift production outside of China or otherwise change our sourcing strategy for these products, potentially resulting in significant costs and disruption to our operations. Even if the U.S. further modifies tariffs under current or future actions, it is always possible that new products we introduce could be impacted by the changes, or that our business will be impacted by retaliatory trade measures taken by China or other countries in response to existing or future tariffs, causing us to raise prices or make changes to our operations, any of which could materially harm our revenue or operating results.

Any deterioration in the global economic environment, including from the ongoing conflict between the United States, Israel, and Iran and related geopolitical instability, and any resulting declines in consumer confidence and spending, could have an adverse effect on our operating results and financial condition.

Uncertainty in global markets, slowing economic growth, high levels of unemployment, a pandemic, inflation, rising interest rates and eroding consumer confidence can negatively impact the level of consumer spending for discretionary items. In addition, in late February 2026, the United States and Israel launched coordinated military strikes against Iran, which retaliated with missile attacks across the region. Although we do not have material operations in the Middle East, the ongoing conflict and any further escalation, including additional military actions, retaliatory measures, sanctions, disruptions to trade or transportation routes, cyberattacks, or other governmental or market responses, has caused, and could continue to cause, significant disruptions of global energy supplies and increases in global energy prices, heightened inflationary pressures on our input costs and supply chain, negative effects on global supply chains, energy markets, commodity prices, currency exchange rates, financial markets and overall macroeconomic conditions, which may adversely impact customer spending patterns in markets in which we operate. This can affect our business as it is dependent on consumer demand for our products. Global economic conditions remain uncertain, and the possibility remains that domestic or global economies, or certain industry sectors of those economies that are key to our sales, may slow or deteriorate, which could result in a corresponding decrease in demand for our products and negatively impact our results of operations and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no shares of common stock repurchased under our repurchase program during the First Quarter.

Item 5. Other Information

None of the Company’s directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s quarter ended April 4, 2026.

Item 6. Exhibits

(a) Exhibits


Exhibit Number						Document Description

3.1						Third Amended and Restated Certificate of Incorporation of Fossil, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 25, 2010).

3.2						Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation of Fossil, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 28, 2013).

3.3						Sixth Amended and Restated Bylaws of Fossil Group, Inc. (incorporated by reference to Exhibit 3.4 of the Company’s Current Report on Form 10-Q filed on November 9, 2023).

31.1(1)						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

31.2(1)						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

32.1(2)						Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2(2)						Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

_______________________________________________

(1) Filed herewith.

(2) Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			FOSSIL GROUP, INC.

May 14, 2026			/S/ RANDY GREBEN
			Randy Greben
			Chief Financial Officer (Principal financial and accounting officer duly authorized to sign on behalf of the Registrant)

Fossil Group, Inc. 10-Q