Fossil Group (FOSL) Q3 2026 earnings summary

Executive summary

• Q3 net sales were $271.2M, up 0.4% reported and 2.0% in constant currency; operating income was $25.3M versus a $21.7M loss a year earlier.

• Strong year-to-date performance and business momentum prompted higher FY26 sales and adjusted operating margin guidance.

Financial highlights

• Gross profit increased to $162.3M from $132.4M; gross margin expanded to 59.8% from 49.0%.

• Adjusted operating income was $28.4M, or $30.2M in constant currency; adjusted diluted EPS was $0.23.

• Net income was $11.7M, or $0.19 diluted EPS, versus a $39.9M net loss; Adjusted EBITDA was $36.7M, or 13.5% of sales.

• SG&A fell 8.8% to $133.9M; restructuring expense was $2.9M versus $6.8M a year earlier.

• YTD sales declined 2.5% to $705.7M, while operating income turned positive at $40.6M and Adjusted EBITDA was $59.8M.

Outlook and guidance

• FY26 sales guidance increased to $980M–$990M from $955M–$975M; adjusted operating margin guidance rose to 5.5%–6.5% from 4%–6%.

• Positive FY26 free cash flow, reported net income and EPS are expected; full-year gross margin is expected in the upper 50s.

• Q4 SG&A rate is expected in the low 50s as demand-generation investment continues; implied Q4 guidance includes a ~$10M wholesale shipment shift from Q4 to Q3.

• FY26 capital expenditures are expected to be $9.0M; Turnaround Plan charges are expected to be $10M as the plan is completed.