Financial Analysis

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.

CommitmentsAndContingenciesDisclosureTextBlock

"DEBT ACTIVITY Prior Revolving Facility: On September 26, 2019, the Company and Fossil Partners L.P., as the U.S. borrowers, and Fossil Group Europe GmbH, Fossil Asia Pacific Limited, Fossil (Europe) GmbH, Fossil (UK) Limited and Fossil Canada Inc., as the non-U.S. borrowers, certain other subsidiaries of the Company from time to time party thereto designated as borrowers, and certain subsidiaries of the Company from time to time party thereto as guarantors, entered into a secured asset-based revolving credit agreement (the Prior Revolving Facility) with JPMorgan Chase Bank, N.A. as administrative agent (the ""ABL Agent""), J.P. Morgan AG, as French collateral agent, JPMorgan Chase Bank, N.A., Citizens Bank, N.A. and Wells Fargo Bank, National Association as joint bookrunners and joint lead arrangers, and Citizens Bank, N.A. and Wells Fargo Bank, National Association, as co-syndication agents and each of the lenders from time to time party thereto (the ""ABL Lenders""). New Revolving Credit Facility: On August 13, 2025, the Company and certain of its subsidiaries identified therein as guarantors entered into a Credit Agreement, dated as of August 13, 2025 (the ABL Credit Agreement), with the lenders from time to time party thereto (the Lenders), ACF FINCO I LP, as administrative agent on behalf of the Lenders (the Administrative Agent), and the Company as a borrower to refinance the Prior Revolving Facility. Pursuant to the Credit Agreement, the Lenders have provided new fina …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The Company's revenue disaggregated by major product category and timing of revenue recognition was as follows (in thousands): For the 13 Weeks Ended October 4, 2025 Americas Europe Asia Corporate Total Product type Watches: Traditional watches $ 91,281 $ 73,895 $ 57,028 $ $ 222,204 Smartwatches 3,343 273 216 3,832 Total watches $ 94,624 $ 74,168 $ 57,244 $ $ 226,036 Leathers 9,547 1,591 3,956 15,094 Jewelry 3,975 13,825 7,257 25,057 Other 1,588 1,565 529 332 4,014 Consolidated $ 109,734 $ 91,149 $ 68,986 $ 332 $ 270,201 Timing of revenue recognition Revenue recognized at a point in time $ 109,697 $ 91,084 $ 68,942 $ 332 $ 270,055 Revenue recognized over time 37 65 44 146 Consolidated $ 109,734 $ 91,149 $ 68,986 $ 332 $ 270,201 For the 13 Weeks Ended September 28, 2024 Americas Europe Asia Corporate Total Product type Watches: Traditional watches $ 93,935 $ 74,162 $ 55,151 $ $ 223,248 Smartwatches 3,997 (265) 236 3,968 Total watches $ 97,932 $ 73,897 $ 55,387 $ $ 227,216 Leathers 14,186 3,561 6,199 23,946 Jewelry 7,273 17,528 6,658 31,459 Other 1,942 2,067 734 455 5,198 Consolidated $ 121,333 $ 97,053 $ 68,978 $ 455 $ 287,819 Timing of revenue recognition Revenue recognized at a point in time $ 121,243 $ 96,912 $ 68,861 $ 455 $ 287,471 Revenue recognized over time 90 141 117 348 Consolidated $ 121,333 $ 97,053 $ 68,978 $ 455 $ 287,819 For the 40 Weeks Ended October 4, 2025 Americas Europe Asia Corporate Total Product type Watches: Traditional watches $ 246,459 $ 186,718 $ 152 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

"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 Third Quarter: Restricted Stock Units and Performance Restricted Stock Units Number of Shares Weighted-Average Grant Date Fair Value Per Share (in Thousands) Nonvested at July 5, 2025 4,046 $ 1.13 Granted 20 1.62 Vested (59) 1.24 Forfeited (116) 0.99 Nonvested at October 4, 2025 3,891 $ 1.15 The total fair value of restricted stock units vested was $0.2 million during the Third 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 Companys stockholders at the Companys 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) an …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

"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 Companys assumptions. ASC 820 requires the use of observable market data if such data is available without undue cost and effort. As of October 4, 2025, the Company did not have any assets or liabilities measured at fair value on a recurring basis. The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 28, 2024 (in thousands): Fair Value at December 28, 2024 Level 1 Level 2 Level 3 Total Assets: Forward contracts $ $ 580 $ $ 580 Total $ $ 580 $ $ 580 The fair values of the Companys forward contracts are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates. See Note 10Derivatives and Risk Management, for additional d …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"INCOME TAXES The Companys income tax (benefit) expense and related effective rates were as follows (in thousands, except percentage data): For the 13 Weeks Ended October 4, 2025 For the 13 Weeks Ended September 28, 2024 For the 40 Weeks Ended October 4, 2025 For the 39 Weeks Ended September 28, 2024 Income tax (benefit) expense $ 7,956 $ 6,165 $ 17,555 $ 2,257 Effective tax rate (24.8) % (23.9) % (41.4) % (2.4) % The effective tax rate in the Third Quarter differed from the Prior Year Quarter primarily due to a change in the Companys global mix of earnings. In addition, income taxes were accrued on certain income in foreign jurisdictions and no tax benefit has been accrued on the U.S. tax losses and on certain losses in other foreign jurisdictions due to valuation allowances previously recorded. The effective tax rate can also vary from quarter-to-quarter due to changes in the resolution of income tax audits, changes in uncertain tax positions, and changes in tax law. On July 4, 2025, the United States Congress passed the budget reconciliation bill H.R. 1, commonly referred to as the One Big Beautiful Bill Act (""OBBBA""). The OBBBA makes permanent many of the provisions previously enacted as part of the 2017 Tax Cut and Jobs Act that were set to expire at the end of 2025 and includes other changes to certain U.S. corporate tax provisions. The changes to U.S. tax law that were enacted under the OBBBA include modifications to capitalization of research and development expense …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

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 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recently Issued Accounting Standards In November 2024, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU""), 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. This guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The adoption of this standard will result in additional disclosure in the notes to the financial statements. The Organization for Economic Cooperation and Development (""OECD"") and over 140 countries have agreed to enact a two-pillar solution to reform the international tax rules to address the challenges arising from the globalization and digitalization of the economy. ""The Pillar Two Global Anti-Base Erosion (GloBE) Rules"" provide a coordinated system to ensure that multinational enterprises with revenues above 750 million euro pay a minimum effective tax rate of 15% tax on the income arising in each of the jurisdictions in which they operate. Many aspects of Pillar Two became effective for tax years beginning in January 2024, with certain remaining impacts to be effective in 2025. Each country must enact its own legislation to apply the Pillar Two rules. Since becoming effective, Pillar …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"RESTRUCTURING In fiscal 2024, the Company announced a plan to return to profitable growth (the ""Turnaround Plan""). The Turnaround Plan is centered on three key areas: (i) refocusing on the core, (ii) rightsizing the cost structure, and (iii) strengthening the balance sheet. The Company expects to achieve selling, general and administrative (""SG&A"") cost savings of approximately $100 million in fiscal 2025 as compared to fiscal 2024 through a series of initiatives including a strategic reduction in force which occurred in late February 2025, reduced costs associated with the transition of smaller international markets to a distributor model, and the closing of underperforming retail stores. The Company closed 44 retail stores in the Year To Date Period and plans to close an additional six stores in the fourth quarter of fiscal year 2025. The Company estimates approximately $60 million in total charges in connection with the Turnaround Plan, with approximately $7 million incurred in fiscal 2024 and $40 million to be incurred during fiscal 2025. The following table shows a summary of Turnaround Plan charges (in thousands): For the 13 Weeks Ended October 4, 2025 For the 40 Weeks Ended October 4, 2025 Restructuring expenses $ 6,789 $ 29,905 Consolidated $ 6,789 $ 29,905 Turnaround Plan restructuring charges by operating segment were as follows (in thousands): For the 13 Weeks Ended October 4, 2025 For the 40 Weeks Ended October 4, 2025 Americas $ 58 $ 1,049 Europe 1,601 5 …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

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 October 4, 2025 Americas Europe Asia Corporate Total Product type Watches: Traditional watches $ 91,281 $ 73,895 $ 57,028 $ $ 222,204 Smartwatches 3,343 273 216 3,832 Total watches $ 94,624 $ 74,168 $ 57,244 $ $ 226,036 Leathers 9,547 1,591 3,956 15,094 Jewelry 3,975 13,825 7,257 25,057 Other 1,588 1,565 529 332 4,014 Consolidated $ 109,734 $ 91,149 $ 68,986 $ 332 $ 270,201 Timing of revenue recognition Revenue recognized at a point in time $ 109,697 $ 91,084 $ 68,942 $ 332 $ 270,055 Revenue recognized over time 37 65 44 146 Consolidated $ 109,734 $ 91,149 $ 68,986 $ 332 $ 270,201 For the 13 Weeks Ended September 28, 2024 Americas Europe Asia Corporate Total Product type Watches: Traditional watches $ 93,935 $ 74,162 $ 55,151 $ $ 223,248 Smartwatches 3,997 (265) 236 3,968 Total watches $ 97,932 $ 73,897 $ 55,387 $ $ 227,216 Leathers 14,186 3,561 6,199 23,946 Jewelry 7,273 17,528 6,658 31,459 Other 1,942 2,067 734 455 5,198 Consolidated $ 121,333 $ 97,053 $ 68,978 $ 455 $ 287,819 Timing of revenue recognition Revenue recognized at a point in time $ 121,243 $ 96,912 $ 68,861 $ 455 $ 287,471 Revenue recognized over time 90 141 117 348 Consolidated $ 121,333 $ 97,053 $ 68,978 $ 455 $ 287,819 For the 40 Weeks Ended October 4, 2025 Americas Europe Asia Corporate Total Product type Watches: Traditiona …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"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 Companys 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 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"STOCKHOLDERS EQUITY Common and Preferred Stock. The Company has 100,000,000 shares of common stock, par value $0.01 per share, (""Common Stock"") authorized, with 53,847,092 and 53,253,974 shares issued and outstanding at October 4, 2025 and December 28, 2024, respectively. The Company has 1,000,000 shares of preferred stock, par value $0.01 per share, authorized, with none issued or outstanding at October 4, 2025 or December 28, 2024. Rights, preferences and other terms of preferred stock will be determined by the Board of Directors at the time of issuance. Common Stock Repurchase Programs. Purchases of the Companys 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. Warrant Agreement. On August 13, 2025, the Company entered into a sec …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

SUBSEQUENT EVENTS Notes Exchange: On November 13, 2025, the Company consummated the previously announced Exchange Offer and concurrent Rights Offering pursuant to the Restructuring Plan. 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 $32,500,000 of incremental, new money financing in exchange for (x) $32,500,000 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 $120,229,725 aggregate principal amount of Notes on a dollar-for-dollar basis for $120,229,725 aggregate principal amount of First-Out Notes, and (iii) received $945,946 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 $29,770,275 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 $29,770,275 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 Notes in the Exchange Offer and consented to the Restructuring Plan received …

SubsequentEventsTextBlock · excerpt; the full note is in the filing