One-glance verdict
Undervalued
$15.12 our estimate vs market $6.64
Wall Street consensus: $9.25 (-38.8% lower than our fair-value estimate)
56% below our estimate, below the bear case
Fundamentals snapshot
Fossil Group, Inc.
FOSL · NMS · Consumer Cyclical · Footwear & Accessories
Current price
$6.64
52-week range
$1.70 - $7.39
Market cap
$392.68M
Balance sheet
Distressed
1.14x Concerning
Net debt $262.99M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Free cash flow was positive in 6/10 years.
- Risk Return on equity was -66.5% last year — the company lost money on shareholders' equity.
- Risk Net debt grew 1.6% over 3 years.
What this company does
Fossil Group, Inc.
Fossil Group designs and sells fashion accessories like watches, handbags, and jewelry under its own names and popular licensed brands. The money they make mainly comes from selling these goods through their own stores, department stores, and online. This matters because their ability to sell a lot of products at good prices affects how much profit they keep after paying for things like making and selling their items, which is known as their operating margin (the percent of each sales dollar left after day-to-day business costs).
How the company got here
Fossil Group was founded in 1984 by Tom Kartsotis, initially as a fashion watch importer. The company found early success by offering stylish watches inspired by mid-20th century American aesthetics, often packaged in distinctive tin boxes. Over the years, Fossil expanded its product offerings beyond watches to include jewelry, handbags, and leather goods. A key part of its growth strategy involved acquiring and developing its own brands, as well as securing licensing agreements with major fashion houses like Michael Kors and Kate Spade to design and produce their accessories. This dual approach allowed Fossil to build its own brand identity while also tapping into the established appeal of luxury names.
What it actually does
Fossil Group designs, develops, markets, and distributes a wide range of fashion accessories. Think of them as the company behind many of the stylish watches, handbags, jewelry, and small leather goods you see in department stores and specialty shops. They create products under their own brands, like Fossil and Skagen, and also produce accessories for other well-known fashion brands through licensing agreements. Their products are sold globally through various channels, including their own retail stores, online, and through partnerships with other retailers.
Fossil Brand
The Fossil brand is the company's namesake and largest business line. It offers a broad range of products, including traditional watches, smartwatches, jewelry, handbags, and small leather goods. These items are designed with a classic American style, often incorporating vintage-inspired elements and quality materials. The Fossil brand aims to appeal to a wide consumer base looking for fashionable yet accessible accessories for everyday wear.
Licensed Brands
This segment represents a significant portion of Fossil's business, where they design and manufacture accessories for other popular fashion brands. This includes well-known names such as Michael Kors, Emporio Armani, Diesel, and Kate Spade New York. By partnering with these brands, Fossil leverages their established customer loyalty and brand recognition to sell a variety of watches, jewelry, and handbags. Essentially, Fossil acts as the manufacturing and design arm for these luxury and contemporary fashion labels in the accessories space.
Skagen
Skagen is another proprietary brand within the Fossil Group, known for its minimalist and elegant Scandinavian-inspired designs. The brand primarily focuses on watches and jewelry, characterized by clean lines, sophisticated aesthetics, and a refined color palette. Skagen appeals to consumers who appreciate understated luxury and timeless design, offering a more premium feel compared to the broader Fossil brand.
Michele
Michele is a premium watch brand within the Fossil Group's portfolio, distinguished by its luxurious and often bold designs. These watches typically feature high-quality materials, intricate detailing, and a focus on fashion-forward aesthetics. The Michele brand targets a more discerning customer looking for statement timepieces that blend high fashion with exceptional craftsmanship.
What management is betting on now
Fossil Group is currently focused on a multi-year turnaround strategy aimed at simplifying the business, reducing costs, and improving profitability. A key priority is to reposition the company away from the highly competitive smartwatch market and focus on its core strengths in traditional watches and fashion accessories. Management is also investing in product innovation, premiumizing materials, and revitalizing the brand's creative expression to connect with a new generation of consumers. This strategy emphasizes leveraging the company's heritage while adapting to current market trends and consumer preferences.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$-24.12M
FY2025 Q4
$28.48M
FY2026 Q1
$-60.64M
FY2026 Q2
$8.62M
FY2026 Q3
$-22.51M
FY2026 Q4
$14.07M
FY2027 Q1
$-22.71M
FY2027 Q2
$-10.06M
Revenue
$209.69M
Net income
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Diluted EPS
-0.18
Operating cash flow
$-9.19M
Free cash flow
$-10.06M
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Sources
Revenue
$224.76M
Net income
—
Diluted EPS
-0.01
Operating cash flow
$-21.76M
Free cash flow
$-22.71M
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Sources
Revenue
$280.52M
Net income
—
Diluted EPS
-0.32
Operating cash flow
$15.20M
Free cash flow
$14.07M
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Sources
Revenue
$270.20M
Net income
—
Diluted EPS
-0.76
Operating cash flow
$-22.16M
Free cash flow
$-22.51M
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Sources
Revenue
$220.39M
Net income
—
Diluted EPS
-0.04
Operating cash flow
$9.42M
Free cash flow
$8.62M
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Sources
Revenue
$233.29M
Net income
—
Diluted EPS
-0.33
Operating cash flow
$-60.36M
Free cash flow
$-60.64M
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Sources
Revenue
$342.30M
Net income
—
Diluted EPS
-0.15
Operating cash flow
$30.51M
Free cash flow
$28.48M
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Sources
Revenue
$287.82M
Net income
—
Diluted EPS
-0.60
Operating cash flow
$-22.82M
Free cash flow
$-24.12M
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Sources
Is it cheap or expensive?
Fair value $15.12 vs current price $6.64
Wall Street consensus is the average analyst price target: $9.25 (-38.8% lower than our fair-value estimate).
Our most-likely fair value is $15.12 a share — about 127.7% above today's price of $6.64, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $263.0M. Interest coverage 1.1x.
Net debt
$262.99M
Interest coverage
1.14x
Fossil Group, Inc.'s profit covers its interest bill about 1.1 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
FOSL
BASELINE
Fossil Group, Inc.
Total debt $341.94M Interest coverage 1.14x This is the baseline the peer rows are being compared against.
Total debt $68.11M Interest coverage 58.83x +5,063% vs FOSL Carries about 51.6x more debt cushion than FOSL.
Total debt $70.97M Interest coverage -66.91x -100% vs FOSL This peer has almost no interest-payment cushion compared with FOSL.
Total debt $1.39B Interest coverage 1.01x -11% vs FOSL Has roughly the same debt cushion as FOSL.
Total debt $377.14M Interest coverage 6.60x +479% vs FOSL Carries about 5.8x more debt cushion than FOSL.
What you should know
The case for and against FOSL
1 Reward
2 Risks
Rewards
-
Free cash flow was positive in 6/10 years.
Risks
-
Return on equity was -66.5% last year — the company lost money on shareholders' equity.
-
Net debt grew 1.6% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
51.08x
P/B
4.18x
P/S
0.40x
EV/EBITDA
20.48x
PEG ratio
1.23x
Profitability
How much profit each dollar creates
Gross margin
56.7%
Operating margin
3.5%
Net margin
-7.1%
ROE
-66.5%
ROA
1.8%
Health
Liquidity and balance-sheet strength
Debt / equity
4.62x
Current ratio
1.76x
Quick ratio
0.77x
Total debt
$341.94M
Total cash
$78.95M
Growth
How the business has been compounding
Revenue TTM
$985.17M
Revenue 5Y CAGR
-14.4%
EPS TTM
-1.27
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-37.92M
Free CF TTM
$-60.46M
FCF margin
-6.1%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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