Fossil’s global net sales amounted to US$259 million in the second quarter, down 48% on a reported basis and 47% in constant currency, year-on-year. According to the company, the decline primarily reflects Covid-19 related impacts on a global basis, including retail and wholesale closures, throughout much of the quarter. On a constant currency basis, sales from the its owned e-commerce websites increased 138% and third-party marketplace e-commerce sales increased 20% compared with the prior year. Gross profit totalled US$140.6 million, down from US$265.1 million in the second quarter of 2019. Gross margin was 54.3%, representing 140 basis points of expansion compared with the second quarter of 2019.

Operating loss for the quarter was US$36.8 million compared with an operating income of US$1.7 million in the comparative period of the previous year. Net loss totalled US$22.5 million. Fossil said it reduced operating expenses by US$86 million, or 33%, on a year-over-year basis, due to both its New World Fossil 2.0 – Transform to Grow programme (NWF 2.0) and immediate cost reduction efforts.

During 2019, Fossil initiated NWF 2.0, which was designed to deliver gross margin benefits and operating expense reductions totalling US$200 million over the three-year period from 2019 to 2021. As a result of the unprecedented impact of Covid-19, the Company said it has significantly expanded its NWF 2.0 initiative to US$250 million to include additional organisational efficiencies and to accelerate digital initiatives. Fossil expects to generate US$100 million in expense savings in 2020.