Fossil returned to profit and sales growth in the third quarter of 2026, the company said Tuesday.
Fossil returned to profit after years without quarterly growth
Fossil returned to profit and sales growth in the third quarter of 2026, the company said Tuesday. It last reported a year-over-year sales increase in the first fiscal quarter of 2022, and last posted quarterly net income in the third fiscal quarter of 2022. The latest quarter therefore brought back both measures after their respective gaps, with the sales increase marking a return to growth against the year-earlier period.¹²
Operating income was $25.3 million, compared with an operating loss of $21.7 million in the same quarter a year earlier. Fossil also reported net income of $11.7 million, or 19 cents per share, for the quarter ended Oct. A year earlier, it had reported a net loss of $39.9 million, or 76 cents per share. The operating and net figures offer two separate measures of the change in the company’s results.¹
Fossil’s reported sales growth was modest in percentage terms, but it ended a stretch without a year-over-year increase dating back to the first fiscal quarter of 2022.¹²
Lower expenses accompanied the sales increase
Net sales rose 0.4% to $271.2 million in the quarter. Operating expenses fell 11.1% to $137 million. Those figures put the sales result alongside a lower expense total, while the operating income figure shows the quarter’s operating result compared with the prior-year operating loss. Fossil’s reported sales growth was modest in percentage terms, but it ended a stretch without a year-over-year increase dating back to the first fiscal quarter of 2022.¹²
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Read More →Fossil raised its full-year guidance and set a net sales range of $980 million to $990 million. That outlook compares with its previous expectation that sales would fall between 3% and 5%; the new range still represents a slight decline from just over $1 billion in sales in the prior year. CEO Franco Fogliato said the company was a year and a half ahead of its original turnaround timeline. Fossil also said it expected positive free cash flow by year-end.¹²
Fogliato linked balance-sheet progress to a smaller company
CEO Franco Fogliato said shrinking the company was the biggest factor in strengthening its balance sheet. Fogliato joined Fossil in 2024. He said his focus included closing stores, moving away from promotions toward full-price sales, improving marketing and broadening the product range. These actions describe the company’s approach during the turnaround; Fogliato specifically identified the reduction in the company’s size as the largest factor in strengthening its balance sheet.¹²
Direct-to-consumer sales declined 5.9% in the quarter, a drop Fogliato attributed to the company’s “aggressive” downsizing. Asia was Fossil’s key growth engine for the quarter, with net sales up 15.1%. Fogliato said much of that regional growth was led by the India market. The quarter therefore combined a decline in direct-to-consumer sales with stronger sales across Asia, with India accounting for much of the region’s increase, according to Fogliato.¹²
Traditional watches grew while smartwatch sales stayed below $1 million
Smartwatch sales came in under $1 million for the quarter. Traditional watches, which make up around 86% of Fossil’s sales, grew 6.4%. The figures show contrasting results within the company’s watch business: smartwatch sales remained below the stated threshold, while the larger traditional-watch category recorded growth. The traditional-watch share also means that most of Fossil’s sales came from that category during the quarter.¹²
Fossil stock was trading under $8 a share on Tuesday, despite a recent surge. The company had lost the vast majority of its value since the early-to-mid 2010s. The share-price figure provides a current snapshot alongside the quarter’s improved operating and sales results, while the longer decline describes the scale of the stock’s loss over time. The company’s raised guidance and positive free-cash-flow expectation were also part of its current financial outlook.¹²
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Read More →The figures show contrasting results within the company’s watch business: smartwatch sales remained below the stated threshold, while the larger traditional-watch category recorded growth.
Turnaround signals a leaner watchmaker
Fossil's return to profit and sales growth after years of declines shows that shrinking a business can restore financial health. The company's operating income swung from a $21.7 million loss to a $25.3 million gain, while expenses fell 11.1%. For a reader in retail or consumer goods, this supports weighing roles at companies undergoing deliberate downsizing, where cost discipline and full-price strategies matter more than scale.¹²
India led Fossil's Asia growth, with regional sales up 15.1%, even as direct-to-consumer sales fell 5.9%. Traditional watches, not smartwatches, drove the rebound—smartwatch sales stayed under $1 million. This suggests career opportunities in traditional product categories and emerging markets like India, rather than in the company's smartwatch line. A reader should also note the stock's long-term decline, indicating the turnaround remains fragile despite improved quarterly results.¹²
Sources
Written by Career Ahead AI. AI can make mistakes, so verify key facts. Report errors to support@careeraheadonline.com
