Fossil Group, Inc.FOSL
Fossil Group, Inc. Revenue Disclosure
Revenue
The Company’s revenue consists of sales of finished products to customers through wholesale and retail channels. Revenue from the sale of products, including those that are subject to inventory consignment agreements, is recognized when control of the product is transferred to the customer and in an amount that reflects the consideration the Company expects to be entitled in exchange for the product. The Company generally considers control to transfer either when products ship or when products are delivered depending on the shipping terms in the agreement or purchase order. The Company considers control to have transferred upon shipment or delivery because the Company has a present right to payment, the customer has legal title to the product, the Company has transferred physical possession of the product, and the customer has the significant risks and rewards of the product. Taxes imposed by governmental authorities on the Company's revenue-producing activities with customers, such as sales taxes and value added taxes, are excluded from net sales.
Markdowns. The Company provides markdowns to certain customers in order to facilitate sales of select styles. Markdowns are estimated at the time of sale using historical data and are recorded as a reduction to revenue. The Company's policy is to record its markdown allowance as a reduction of accounts receivable.
Returns. The Company accepts limited returns from customers. The Company continually monitors returns and maintains a provision for estimated returns based upon historical experience, any specific issues identified and current information. Product returns are accounted for as reductions to revenue, cost of sales and customer liabilities and an increase to other current assets to the extent the returned product is resalable.
Cooperative Advertising. The Company participates in cooperative advertising programs with its major retail customers, whereby the Company shares the cost of certain of their advertising and promotional expenses. Certain advertising expenses which are not considered separate performance obligations are recorded as sales discounts. All other cooperative advertising expenses are recorded in SG&A.
Multiple Performance Obligations. The Company enters into contracts with customers for its wearable technology that include multiple performance obligations. Each distinct performance obligation was determined by whether the customer could benefit from the good or service on its own or together with readily available resources. The Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company's process for determining standalone selling price considers multiple factors including the Company's internal pricing model and market trends that may vary depending upon the facts and circumstances related to each performance obligation. Revenue allocated to the hardware and software essential to the functionality of the product represents the majority of the arrangement consideration and is recognized at the time of product delivery, provided the other conditions for revenue recognition have been met. Revenue allocated to free software services provided through the Company's online dashboard and mobile apps as well as revenue allocated to the right to receive future unspecified software updates is deferred and recognized on a straight-line basis over the product's estimated usage period of two years.
Licensing Income. The Company previously had agreements with certain customers to provide smartwatch technology, design, support and procurement, which expired in fiscal year 2023.
Disaggregation of Revenue. The Company's revenue disaggregated by major product category and timing of revenue recognition was as follows (in thousands):
| Fiscal Year 2025 | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Corporate | Total | |||||||||||||||||||||||||
| Product Type | |||||||||||||||||||||||||||||
| Watches: | |||||||||||||||||||||||||||||
| Traditional watches | $ | 351,808 | $ | 264,097 | $ | 198,711 | $ | — | $ | 814,616 | |||||||||||||||||||
| Smartwatches | 10,520 | 1,377 | (157) | — | 11,740 | ||||||||||||||||||||||||
| Total watches | $ | 362,328 | $ | 265,474 | $ | 198,554 | $ | — | $ | 826,356 | |||||||||||||||||||
| Leathers | 42,935 | 9,685 | 17,324 | — | 69,944 | ||||||||||||||||||||||||
| Jewelry | 19,359 | 51,390 | 20,360 | — | 91,109 | ||||||||||||||||||||||||
| Other | 6,308 | 6,698 | 2,409 | 1,582 | 16,997 | ||||||||||||||||||||||||
| Consolidated | $ | 430,930 | $ | 333,247 | $ | 238,647 | $ | 1,582 | $ | 1,004,406 | |||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||
| Revenue recognized at a point in time | $ | 430,763 | $ | 332,973 | $ | 238,434 | $ | 1,582 | $ | 1,003,752 | |||||||||||||||||||
| Revenue recognized over time | 167 | 274 | 213 | — | 654 | ||||||||||||||||||||||||
| Consolidated | $ | 430,930 | $ | 333,247 | $ | 238,647 | $ | 1,582 | $ | 1,004,406 | |||||||||||||||||||
| Fiscal Year 2024 | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Corporate | Total | |||||||||||||||||||||||||
| Product Type | |||||||||||||||||||||||||||||
| Watches: | |||||||||||||||||||||||||||||
| Traditional watches | $ | 388,789 | $ | 269,215 | $ | 214,641 | $ | — | $ | 872,645 | |||||||||||||||||||
| Smartwatches | 18,669 | 1,743 | 4,468 | — | 24,880 | ||||||||||||||||||||||||
| Total watches | $ | 407,458 | $ | 270,958 | $ | 219,109 | $ | — | $ | 897,525 | |||||||||||||||||||
| Leathers | 70,653 | 16,995 | 23,476 | — | 111,124 | ||||||||||||||||||||||||
| Jewelry | 28,847 | 60,906 | 24,697 | — | 114,450 | ||||||||||||||||||||||||
| Other | 8,194 | 8,748 | 2,793 | 2,156 | 21,891 | ||||||||||||||||||||||||
| Consolidated | $ | 515,152 | $ | 357,607 | $ | 270,075 | $ | 2,156 | $ | 1,144,990 | |||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||
| Revenue recognized at a point in time | $ | 514,779 | $ | 357,041 | $ | 269,615 | $ | 2,156 | $ | 1,143,591 | |||||||||||||||||||
| Revenue recognized over time | 373 | 566 | 460 | — | 1,399 | ||||||||||||||||||||||||
| Consolidated | $ | 515,152 | $ | 357,607 | $ | 270,075 | $ | 2,156 | $ | 1,144,990 | |||||||||||||||||||
| Fiscal Year 2023 | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Corporate | Total | |||||||||||||||||||||||||
| Product Type | |||||||||||||||||||||||||||||
| Watches: | |||||||||||||||||||||||||||||
| Traditional watches | $ | 456,745 | $ | 296,133 | $ | 260,244 | $ | 1,955 | $ | 1,015,077 | |||||||||||||||||||
| Smartwatches | 37,660 | 26,251 | 17,038 | — | 80,949 | ||||||||||||||||||||||||
| Total watches | $ | 494,405 | $ | 322,384 | $ | 277,282 | $ | 1,955 | $ | 1,096,026 | |||||||||||||||||||
| Leathers | 104,760 | 25,877 | 27,790 | — | 158,427 | ||||||||||||||||||||||||
| Jewelry | 33,367 | 78,946 | 19,097 | — | 131,410 | ||||||||||||||||||||||||
| Other | 8,247 | 10,151 | 4,029 | 4,094 | 26,521 | ||||||||||||||||||||||||
| Consolidated | $ | 640,779 | $ | 437,358 | $ | 328,198 | $ | 6,049 | $ | 1,412,384 | |||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||
| Revenue recognized at a point in time | $ | 640,191 | $ | 436,610 | $ | 327,747 | $ | 4,677 | $ | 1,409,225 | |||||||||||||||||||
| Revenue recognized over time | 588 | 748 | 451 | 1,372 | 3,159 | ||||||||||||||||||||||||
| Consolidated | $ | 640,779 | $ | 437,358 | $ | 328,198 | $ | 6,049 | $ | 1,412,384 | |||||||||||||||||||
Contract Balances. As of January 3, 2026, the Company had no material contract assets on the consolidated balance sheets and no deferred contract costs. The Company had contract liabilities of (i) $0.1 million and $0.7 million as of January 3, 2026 and December 28, 2024, respectively, primarily related to remaining performance obligations on wearable technology products and (ii) $1.7 million and $2.1 million as of January 3, 2026 and December 28, 2024, respectively, related to gift cards issued.
Shipping and Handling Fees. The Company accounts for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 12, 2026 | Showing above |
| 2024 | Mar 12, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 9, 2023 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.