Fossil Group, Inc. (NASDAQ:FOSL) Q1 2024 Earnings Call Transcript

Looking at the balance of the year, we anticipate that SG&A dollars will be down in the low to mid-teens on a year-over-year basis for the remaining quarters of 2024 as we begin to recognize the annualized benefit of our TAG plan. Restructuring costs for fiscal year 2024 are estimated at $35 million. We are also laser focused on strengthening our balance sheet. We ended the first quarter with $113 million in cash and $10 million available under our revolver. And we have a solid road map for generating free cash flow for full year 2024, a significant improvement versus last year’s use of cash of approximately $70 million. Note that our expectation to be free cash flow positive this year includes the onetime benefit of the $57 million tax refund.

It’s also important to note that the seasonal nature of our business and projected sales declines will require operating cash used in Q2 and Q3. In the near term, with limited availability on our ABL facility, and as cash flows turned positive in the fourth quarter, we believe it is prudent to preserve our financial flexibility until the business strengthens. At the same time, as part of our current strategic review process, we are taking a holistic review of our capital structure, along with our strategic and operational plans in order to aggressively improve the longer-term capital structure of the Company. We will share more detail on future calls as our plans and programs are developed. We appreciate the support of our shareholders and look forward to keeping you updated on our progress in future quarters.

Operator: