By Katherine Hamilton

Fossil Group posted a drop in first-quarter sales, citing ongoing softness in the watch market and recent store closures.

The watch maker on Wednesday posted a loss of $17.6 million, or 33 cents a share, in the first quarter, compared with a loss of $24.3 million, or 46 cents a share, a year earlier. Stripping out one-time items, adjusted per-share earnings were 10 cents a share.

Revenue fell 8.5% to $233.3 million. Fossil said the sales decline was mainly driven by consumer softness, with drops in smartwatch sales, as well as the company's shrinking retail footprint.

Its loss narrowed in part due to operating costs falling by about 8%, primarily by cutting selling, general and administrative expenses.

The company reiterated its full-year outlook, which assumes no material change in consumer demand or in the broader macroeconomic environment. Chief Executive Franco Fogliato said Fossil's global footprint limits its exposure to tariffs and the company has several levers to mitigate any extra costs.

In March, Fossil said it planned to close 50 stores and cut its workforce. Fossil is aiming to focus on its core brand and save $100 million in 2025, following a previous growth plan that was designed to bring in $300 million in annualized benefits. It ended up generating $280 million in operating income benefits over a two-year period.

"Our turnaround strategies are gaining traction and fueling momentum across our business despite the challenging macro environment," Fogliato said Wednesday.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

May 14, 2025 16:49 ET (20:49 GMT)

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