Shares of Fossil Group dropped more than 18% after the watch conglomerate reported a drop in sales and cut its full-year sales outlook.
The stock fell more than 18% to $1.97 in midday trading. So far this year, the stock is down more than 54%.
The Richardson, Tex.-based parent of brands like Skagen and Zodiac reported sales of $322 million, a 13% drop from last year. Traditional watch sales dropped 8% while smartwatch sales tumbled 46%.
“So far in 2023, the wholesale channel in the Americas and Europe has been difficult. The stores have underinvested in the watch business,” Chief Executive Kosta Kartsotis said. “The near-term impact has pressured our operating results.”
The sluggish reopening in China weighed on sales, too, he said.
The company’s loss widened to 51 cents a share from 37 cents a share a year ago.
Fossil also cut its full-year sales outlook and is now projecting a 5% to 10% drop in sales, compared with previous outlook for growth of up to 1% to a sales drop of up to 5%.
The company said it is expanding its cost-cutting program and has hired consulting firm Alvarez & Marsal’s Consumer and Retail Group to help. Fossil is targeting about $300 million of annual operating income benefits by the end of 2025 from the revamped plan.