Texas-based Fossil Group Inc., parent company of supplier Fossil Corporate Markets (asi/55145), blamed a stronger U.S. dollar and declines in leathers and jewelry for a 3% decrease in year-over-year fourth-quarter sales. Revenues for the quarter were $959 million, a drop of $18.3 million versus Q4 2015. For its entire fiscal year 2016, Fossil’s total net sales fell to $3 billion, down $45.4 million, or 6%, compared to 2015.
Going forward, the watchmaker is pinning its hopes on wearable technology, noting that the decline of traditional watches in its multi-brand licensed watch portfolio was largely offset by growth in connected watches. “The fourth quarter of 2016 was pivotal for Fossil Group with our wearable launches demonstrating they could be the catalyst to drive growth in the watch category,” said CEO Kosta Kartsotis, in a statement. “Delivering some stability in the watch category during the quarter reinforces our belief that with our technology capabilities, we can turn what was once a headwind into a tailwind.”
In 2017, Karstotis says Fossil will focus even more strongly on wearable technology, launching more than 300 new products and adding “new brands to the platform and enhancing engineering to enable additional functionality in more stylish and slimmer cases.” The company will also focus efforts on efficiency, continuing an initiative to close underperforming stores, adjust its expense base and enhance its supply chain.