Francesco Marmo's questions to Fossil Group (FOSL) leadership • Q2 2025
Question
Francesco Marmo from Maxim Group inquired about the drivers of the significant gross margin improvement, specifically the impact of reduced promotions and price increases. He also asked about wholesale channel trends, initiatives with partners, the renewed interest in traditional watches among younger consumers, and the strategy behind successful limited-edition collaborations.
Answer
CEO Franco Fogliato explained that the move to a full-price model has been successful, with consumers showing resilience and AURs increasing, validating the brand's value. He highlighted stronger wholesale relationships, investments in in-store presentation, and the upcoming Nick Jonas campaign. Fogliato also confirmed a comeback for traditional watches, driven by younger consumers and successful collaborations that create brand heat. CFO Randy Greben added that tariffs have been effectively mitigated, but noted that Q3 gross margin will be impacted by the accounting for minimum royalty shortfalls, though the underlying margin rate remains strong.