Fossil Group Inc. (FOSL) on Wednesday reported a narrower first-quarter loss, as lower restructuring expenses and reduced operating costs offset a decline in sales.
Net loss attributable to Fossil Group narrowed to $0.8 million, or $0.01 loss per share, from a net loss of $17.6 million, or $0.33 loss per share, in the year-ago quarter.
Adjusted net loss improved to $1.9 million, or $0.03 loss per share, from a net loss of $5.0 million, or $0.10 loss per share, last year.
Net sales declined 3.6% to $224.8 million from $233.3 million a year earlier. The company said sales were negatively impacted by the current quarter containing 13 weeks compared with 14 weeks in the prior-year quarter, along with store rationalization initiatives and declining smartwatch sales.
Gross margin narrowed to 59.9% from 61.3%, primarily due to higher tariffs and accelerated licensed brand royalty recognition.
Wholesale sales increased 5% on a constant-currency basis, while direct-to-consumer sales declined 29%. Traditional watch sales were roughly flat year-over-year in constant currency, while leather sales fell 41% and jewelry sales declined 14%.
Fossil reiterated its fiscal 2026 outlook and continues to expect net sales to decline 4% to 6%, with a return to sales growth in the fourth quarter.
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