Fossil Group, Inc. (FOSL): Analyse du Pestle [Jan-2025 Mise à jour]

Dans le monde dynamique des accessoires de mode, Fossil Group, Inc. se situe à une intersection critique de l'innovation, des défis du marché et des tendances transformatrices. Cette analyse complète du pilon dévoile le paysage complexe qui façonne les décisions stratégiques de l'entreprise, explorant les forces externes multiformes stimulant son écosystème commercial mondial. De la navigation sur les politiques commerciales complexes à la réponse aux technologies de consommation en évolution rapide, les fossiles doivent équilibrer magistralement les progrès technologiques, les impératifs de durabilité et l'adaptabilité du marché pour maintenir son avantage concurrentiel dans la technologie portable farouchement contestée et les marchés accessoires de la mode.

Fossil Group, Inc. (FOSL) - Analyse du pilon: facteurs politiques

Politiques commerciales américaines affectant la fabrication mondiale et l'importation / exportation de montres et accessoires

En 2024, le groupe fossile fait face à des défis importants avec les politiques commerciales américaines:

Politique commerciale	Taux tarifaire	Impact sur le groupe fossile
Section 301 Tarifs sur la Chine	25% sur les composants de la montre	Augmentation des coûts de production
Accord commercial de l'USMCA	Tarifs réduits de 6,5%	Économies de coûts de fabrication potentielles

Les tensions géopolitiques potentielles ont un impact sur les opérations de la chaîne d'approvisionnement en Asie

Paysage géopolitique actuel affectant les opérations asiatiques du groupe fossile:

• Les tensions de Chine-Taïwan augmentent le risque de la chaîne d'approvisionnement
• Restrictions d'exportation des semi-conducteurs américains impactant les composants de la technologie
• Perturbations du commerce potentiels dans les centres de fabrication d'Asie du Sud-Est

Accords commerciaux internationaux influençant les stratégies de production et de distribution

Accord commercial	Date d'entrée en vigueur	Impact potentiel des coûts
Accord complet et progressif pour le partenariat transpacifique (CPTPP)	Janvier 2024	Réduction estimée de 3,2% des coûts d'importation / exportation
Partenariat économique complet régional (RCEP)	Novembre 2020	Potentiel de 2,8% de réduction des coûts de fabrication

Modifications réglementaires dans l'électronique grand public et les marchés technologiques portables

Développements réglementaires clés ayant un impact sur le groupe fossile:

• Règlements de la FCC sur la communication sans fil dans les appareils portables
• Exigences de conformité du règlement général de la protection des données de l'UE (RGPD)
• California Consumer Privacy Act (CCPA) Protection des données

Corps réglementaire	Coût de conformité	Pénalité potentielle
FCC	Investissement annuel de conformité annuel de 250 000 $	Jusqu'à 100 000 $ par violation
GDPR de l'UE	350 000 $ Investissement annuel de conformité	Jusqu'à 20 millions d'euros ou 4% des revenus mondiaux

Fossil Group, Inc. (FOSL) - Analyse du pilon: facteurs économiques

Fluctuant les dépenses de consommation dans les accessoires de luxe et les segments de montres de mode

Les revenus du groupe des fossiles dans les accessoires et les montres de luxe pour 2023 étaient de 1,47 milliard de dollars, ce qui représente une baisse de 3,2% par rapport à l'année précédente. Le marché mondial de Luxury Watch était évalué à 39,2 milliards de dollars en 2023, avec une croissance prévue à 43,6 milliards de dollars d'ici 2025.

Année	Revenus totaux	Revenus d'accessoires de luxe	Regarder les revenus du segment
2022	1,52 milliard de dollars	685 millions de dollars	785 millions de dollars
2023	1,47 milliard de dollars	662 millions de dollars	758 millions de dollars

Impact des incertitudes économiques mondiales sur les achats discrétionnaires des consommateurs

Les dépenses discrétionnaires des consommateurs aux États-Unis ont diminué de 2,7% en 2023, ce qui concerne directement les ventes du groupe fossile. La marge brute de la société s'est contractée de 53,4% en 2022 à 51,2% en 2023.

Volatilité des taux de change affectant les sources de revenus internationaux

Groupe fossile expérimenté 42,3 millions de dollars en pertes de traduction de change En 2023. Les marchés internationaux ont contribué environ 38% du total des revenus de l'entreprise, avec une exposition significative aux marchés européens et asiatiques.

Région	Contribution des revenus	Impact de la monnaie
Europe	22%	- 18,7 millions de dollars
Asie-Pacifique	16%	- 23,6 millions de dollars

Défis continus dans la transformation du marché de détail et la concurrence du commerce électronique

Les ventes de commerce électronique pour le groupe fossile ont augmenté à 35,6% du total des revenus en 2023, contre 29,4% en 2022. La concurrence en ligne de la vente au détail s'est intensifiée, les canaux de vente numériques ayant connu une croissance de 12,5% sur le marché des accessoires de luxe.

Canal de vente	2022 Revenus	Revenus de 2023	Taux de croissance
Commerce de détail physique	971 millions de dollars	946 millions de dollars	-2.6%
Commerce électronique	549 millions de dollars	524 millions de dollars	-4.5%

Fossil Group, Inc. (FOSL) - Analyse du pilon: facteurs sociaux

Changer les préférences des consommateurs vers des montres intelligentes et une technologie portable numérique

La taille du marché mondial des smartwatch a atteint 22,46 milliards de dollars en 2022, prévoyant une augmentation de 61,98 milliards de dollars d'ici 2030 avec un TCAC de 13,5%. Le segment de smartwatch de Fossil Group représentait 28,4% de ses revenus totaux de technologie portable en 2023.

Année	Taille du marché de la montre intelligente	Revenus de smartwatch fossiles
2022	22,46 milliards de dollars	157,3 millions de dollars
2023	32,85 milliards de dollars	201,4 millions de dollars

Demande croissante d'accessoires de mode durables et éthiques

73% des consommateurs mondiaux tiennent compte de la durabilité lors de l'achat d'accessoires de mode. Le groupe fossile a signalé que 15,6% de leur gamme de produits incorporait des matériaux recyclés en 2023.

Métrique de la durabilité	Pourcentage
Les consommateurs priorisent la mode durable	73%
Produits de matériaux recyclés fossiles	15.6%

Tendances des consommateurs du millénaire et de la génération Z mettant l'accent sur l'authenticité de la marque et l'engagement numérique

86% des milléniaux et des consommateurs de la génération Z s'attendent à ce que les marques démontrent la responsabilité sociale. L'engagement numérique du groupe fossile a augmenté de 42% en 2023, avec 2,3 millions de followers sur les réseaux sociaux.

Métrique de l'engagement numérique	Valeur
Abonnés des médias sociaux	2,3 millions
Croissance de l'engagement numérique	42%

Intérêt croissant des consommateurs pour les produits de mode personnalisés et personnalisés

Le marché de la mode personnalisé devrait atteindre 31,5 milliards de dollars d'ici 2026. Fossil Group a introduit 17 nouvelles options de personnalisation dans leur gamme de produits en 2023.

Métrique de personnalisation	Valeur
Taille du marché de la mode personnalisée (projection 2026)	31,5 milliards de dollars
Options de personnalisation fossile ajoutées en 2023	17

Fossil Group, Inc. (FOSL) - Analyse du pilon: facteurs technologiques

Évolution rapide des technologies de smartwatch et de dispositifs connectés

Le positionnement du marché des smartwatch du groupe fossile reflète les mesures technologiques suivantes:

Métrique technologique	Données spécifiques
Investissement annuel de R&D dans la technologie portable	42,3 millions de dollars en 2023
Applications de brevet de l'appareil connecté	17 brevets technologiques déposés
Vitesse de traitement de la montre intelligente	Processeur à double cœur de 1,2 GHz
La durée de vie de la batterie pour le dernier modèle de smartwatch	Utilisation continue 24 heures

Investissement dans les plateformes numériques et les capacités de commerce électronique

Métriques d'investissement de plate-forme numérique:

• Budget de technologie de plate-forme numérique: 23,7 millions de dollars en 2023
• Trajet du site Web du commerce électronique: 3,2 millions de visiteurs mensuels
• Taux de téléchargement de l'application mobile: 450 000 nouveaux téléchargements par trimestre
• Pourcentage de ventes en ligne: 37% des revenus totaux

Intégration des fonctionnalités avancées de suivi et de surveillance de la santé

Fonctionnalité de surveillance de la santé	Spécifications techniques
Précision de surveillance de la fréquence cardiaque	± 2 battements par minute
Précision de suivi du sommeil	Précision à 95%
Détection de niveau de contrainte	Surveillance en temps réel avec les algorithmes d'IA
Technologie des capteurs	Accéléromètre et gyroscope à 6 axes

Tendances émergentes de la réalité augmentée et des expériences de produits numériques

Investissements en technologie de réalité augmentée:

• Budget de développement AR: 15,6 millions de dollars
• Plate-formes de visualisation du produit AR: 3 flux de développement actifs
• Précision virtuelle de la technologie d'essai: taux de satisfaction du client à 92%
• Temps d'interaction du produit numérique: moyenne 4,7 minutes par session utilisateur

Fossil Group, Inc. (FOSL) - Analyse du pilon: facteurs juridiques

Protection de la propriété intellectuelle pour les innovations de conception et de technologie

En 2024, le groupe fossile détient 27 brevets de conception actifs aux États-Unis Bureau des brevets et des marques (USPTO). La société a investi environ 3,2 millions de dollars de stratégies de protection de la propriété intellectuelle au cours de l'exercice 2023.

Catégorie de brevet	Nombre de brevets actifs	Coût de protection annuel
Conception de smartwatch	12	1,5 million de dollars
Technologie portable	8	1,1 million de dollars
Mécanisme de surveillance hybride	7	$600,000

Conformité aux réglementations internationales sur la sécurité et la fabrication des produits

Le groupe fossile maintient la conformité à plusieurs normes de sécurité internationales, notamment:

• ISO 9001: Certification de gestion de la qualité 2015
• Conformité de la marque CE pour le domaine économique européen
• Certification FCC pour les appareils électroniques

Norme de réglementation	Coût de conformité	Fréquence d'audit
Marque CE	$425,000	Annuel
Directive ROHS	$275,000	Semestriel
Atteindre la réglementation	$350,000	Annuel

Lois de confidentialité et de protection des données

Les groupes de fossiles allouent 2,7 millions de dollars par an Pour garantir la conformité aux réglementations mondiales de protection des données, y compris le RGPD et le CCPA.

Règlement	Investissements de conformité	Mesures de protection des données
RGPD (Union européenne)	1,2 million de dollars	Stockage de données utilisateur chiffré
CCPA (Californie)	$850,000	Plateforme de gestion du consentement des utilisateurs
Pipeda (Canada)	$650,000	Système de notification de violation de données

Risques potentiels en matière de litige dans la technologie et la conception des domaines des brevets

En 2023, le groupe fossile a été confronté 3 défis juridiques liés aux brevets, les dépenses de défense juridique totales atteignant 1,9 million de dollars.

Type de litige	Nombre de cas	Dépenses juridiques
Défense d'infraction aux brevets	2	1,3 million de dollars
Conteste de conception des brevets	1	$600,000

Fossil Group, Inc. (FOSL) - Analyse du pilon: facteurs environnementaux

Engagement envers les pratiques et matériaux de fabrication durables

Fossil Group a mis en œuvre une stratégie de durabilité ciblant le polyester 100% recyclé dans des sangles de surveillance d'ici 2025. En 2023, la société a atteint une utilisation en polyester recyclée de 41% dans la production de bande de montre.

Type de matériau	Pourcentage de contenu recyclé	Année cible
Regarder des sangles	41%	2025
Matériaux d'emballage	35%	2024

Réduire l'empreinte carbone dans les réseaux de production et de distribution mondiaux

Le groupe fossile a signalé une réduction de 22% des émissions de carbone à travers les opérations mondiales de la chaîne d'approvisionnement en 2023, avec une réduction ciblée de 50% d'ici 2030.

Métrique de réduction des émissions	Progrès actuel	Année cible
Réduction des émissions de carbone	22%	2030
Consommation d'énergie renouvelable	27%	2025

Mise en œuvre des principes de l'économie circulaire dans la conception des produits et le cycle de vie

Fossile Group a lancé un programme de reprise de produits, récupérant environ 15 000 montres pour le recyclage en 2023, représentant 0,8% du volume de production annuel.

Initiative de l'économie circulaire	Performance de 2023	Taux de récupération
Regarder le programme de recyclage	15 000 unités	0.8%

Demande croissante des consommateurs de pratiques de marque responsable de l'environnement

La recherche sur les consommateurs indique que 68% de la cible démographique de Fossil priorise les offres de produits durables, ce qui stimule la stratégie environnementale de l'entreprise.

Préférence de durabilité des consommateurs	Pourcentage	Segment de marché
Achats axés sur la durabilité	68%	18 à 35 ans

Fossil Group, Inc. (FOSL) - PESTLE Analysis: Social factors

Sociological

You're seeing a clear shift in consumer sentiment, and Fossil Group, Inc. is defintely leaning into it. The core social factor affecting the company is a pivot back to traditional, tangible products, moving away from the crowded, low-margin niche of smartwatches. This strategic pivot back to core traditional watches aligns with consumer trends favoring heritage brands over niche tech.

The market is signaling that classic design and brand legacy still matter, which is a massive opportunity for a company like Fossil Group. The proof is in the numbers: traditional watch sales showed a 2% constant currency increase in Q1 2025, a key positive signal that their core product still resonates with consumers seeking lasting style over fleeting digital trends.

Shifting Consumer Preferences and Product Performance

However, the consumer preference shift isn't a simple one-way street. While watches are showing life, other categories are struggling, indicating a broader social trend of consumers being more selective about accessories. Here's the quick math on how shifting consumer preferences hit the non-watch categories in Q1 2025:

• Declines in non-watch categories like leather goods (down 37% in constant currency in Q1).
• Jewelry sales also declined, down 13% in constant currency in Q1.

This tells us that consumers are still pulling back on discretionary fashion items, especially in areas where Fossil Group's brand presence is less dominant compared to their watch heritage. The company needs to figure out how to translate that watch momentum into its other product lines, or just focus capital where it's working.

Brand Revitalization and Gen Z Engagement

To combat the overall sales decline (worldwide net sales were $233.3 million in Q1 2025, a decrease of 8.5% on a reported basis), the company is investing heavily in brand revitalization efforts. This includes a global campaign featuring celebrity ambassador Nick Jonas to re-engage Gen Z consumers, who are increasingly interested in vintage and analog aesthetics.

The partnership with Nick Jonas, announced in late 2024, positions him as the global watch ambassador for 2025-2026, with the worldwide campaign slated to launch in the back half of 2025. This move harnesses the cultural power of music and a celebrity with widespread appeal to connect the Fossil brand's timeless spirit with a modern, younger audience. It's a smart play to build brand equity (the commercial value derived from consumer perception) with the next generation of buyers.

Product Category	Q1 2025 Constant Currency Sales Change	Social Trend Alignment
Traditional Watches	Increase of 2%	Favorable: Shift to heritage, analog, and tangible products.
Leathers Category	Decrease of 37%	Unfavorable: Consumer pullback on non-essential, non-core accessories.
Jewelry Sales	Decrease of 13%	Unfavorable: Discretionary spending cutbacks and lack of strong brand pull.

What this estimate hides is the potential for the Nick Jonas campaign to lift the entire brand portfolio, not just watches, but the immediate action is clear: lean into the watch category's strength.

Fossil Group, Inc. (FOSL) - PESTLE Analysis: Technological factors

Major strategic decision to exit the non-profitable touchscreen smartwatch category in Q2 2025.

The most significant technological decision for Fossil Group in 2025 was the strategic exit from the non-profitable, full-function touchscreen smartwatch category, a move that was substantially completed in the second quarter. This segment had become a drain on resources, requiring significant investment in technology (like Wear OS) and engineering, which are not Fossil's core competencies. The financial impact of shedding this low-margin product line was immediate and positive for profitability.

Here's the quick math: The exit from smartwatches, combined with retail store rationalization, contributed approximately 6 percentage points to the overall net sales decline of 15.2% in Q2 2025, which totaled $220.4 million. But, this strategic retreat was a key driver in expanding the gross margin by a massive 490 basis points to 57.5% in Q2 2025, leading to an operating income of $8.5 million, a substantial turnaround from the $(34.0) million operating loss in the prior year's second quarter. It was a painful cut, but defintely necessary for margin health.

Focus shifts entirely to traditional analog watches and the higher-margin hybrid smartwatch segment.

Fossil Group is now refocusing its technology efforts on the higher-margin segments where its brand equity in design and fashion is strongest: traditional analog watches and the hybrid smartwatch category. The hybrid models, which look like a classic watch but include smart features like activity tracking and discreet notifications, require less complex and costly software development than their touchscreen counterparts. This pivot aligns with the consumer trend favoring the aesthetic of a classic timepiece with the utility of a wearable device.

The core traditional watch category proved more resilient than the overall business, with sales decreasing a less severe 8% in constant currency during Q2 2025, compared to the company's total net sales decline of 15.8% in constant currency. This differential validates the strategic focus on the core product. The hybrid segment offers a profitable middle ground, leveraging the company's design heritage while incorporating essential health-tracking technology.

Continued investment in digital engagement and e-commerce to offset declining brick-and-mortar traffic.

To counteract the secular decline in physical retail traffic, Fossil Group continues to invest heavily in its digital direct-to-consumer (DTC) channels. This is where the future of retail is, so the company must be a leader here. A key technological integration in February 2025 was the addition of Amazon's 'Buy with Prime' fulfillment options on Fossil.com, aiming to provide customers with faster, more convenient delivery and returns.

While the overall direct-to-consumer sales channel, which includes e-commerce, decreased by 30% in Q2 2025, this masks a strategic shift. Management is deliberately scaling back on promotional activity in the e-commerce channel to drive a better gross margin profile and bottom-line profitability, rather than just chasing top-line revenue at any cost. This is a quality-over-quantity approach. Digital Commerce 360 projects Fossil's 2025 online sales will reach approximately $476.31 million, underscoring the channel's importance despite the short-term sales dip from de-promotioning.

The exit from smartwatches removes direct competition with tech giants like Apple and Samsung.

The decision to exit the touchscreen smartwatch market is a pragmatic acknowledgment of the competitive reality. Fossil Group could not compete effectively against the massive technology ecosystems and R&D budgets of companies like Apple and Samsung. The global smartwatch market size is substantial, projected to grow from $42.5 billion in 2025 to $92 billion by 2034, but it is fundamentally a tech battleground.

The market share data illustrates the challenge Fossil faced:

Smartwatch Vendor	Global Shipment Market Share (Q1 2025)
Huawei	21%
Apple	13%
Samsung	11%
Others	55%

By stepping away from this segment, Fossil avoids the costly, continuous cycle of innovation required to compete for the $42.5 billion market. The company is instead focusing its limited technology capital on enhancing its core traditional and hybrid product lines, where design and brand heritage are more important than processing power and operating system features.

Fossil Group, Inc. (FOSL) - PESTLE Analysis: Legal factors

Successfully completed a court-supervised restructuring plan for its $150 million Senior Notes due 2026.

You're watching Fossil Group, Inc. manage a massive financial pivot, and the legal work behind it is defintely complex. The company successfully completed a court-supervised debt restructuring in November 2025, a critical move to stabilize its balance sheet. This process centered on the cancellation of its outstanding $150 million 7.00% Senior Notes due 2026. Honestly, getting this done was the difference between a controlled turnaround and a potential Chapter 11 filing.

The successful restructuring involved exchanging the old notes for new, longer-dated secured instruments. This provided immediate relief and pushed the maturity wall out. Also, noteholders participating in the exchange and rights offering injected $32.5 million in new financing, which is crucial liquidity for the ongoing turnaround plan. The total debt as of July 5, 2025, stood at $179.0 million, so this restructuring was a major legal and financial de-risking event for the company.

The debt restructuring required UK High Court approval and US Chapter 15 recognition, a complex legal process.

This debt maneuver was a masterclass in cross-border legal strategy. Fossil Group, a US-listed company, anchored its restructuring in the UK courts through its subsidiary, Fossil (UK) Global Services Ltd. They used a restructuring plan under Part 26A of the UK Companies Act 2006, which was sanctioned by the High Court of Justice of England and Wales. This allowed for a more targeted treatment of the debt class than a traditional US Chapter 11 process.

To ensure the plan was enforceable in the United States, the company had to file for Chapter 15 recognition in the US Bankruptcy Court for the Southern District of Texas. This dual-jurisdiction approach is novel for a US-listed issuer trying to preserve its equity listing. It shows the extent of the legal complexity and the strategic importance of choosing the right legal forum to manage financial distress.

Restructuring Component	Legal/Financial Detail (FY 2025)	Maturity/Status
Old Debt Canceled	$150 million 7.00% Senior Notes	Due 2026 (Canceled Nov 2025)
New Secured Debt (First-Out)	9.500% First-Out First Lien Secured Senior Notes	Due 2029
New Secured Debt (Second-Out)	7.500% Second-Out Second Lien Secured Senior Notes	Due 2029
New Money Raised	$32.5 million in new financing	Completed Nov 2025
Governing Legal Frameworks	UK Part 26A Companies Act & US Chapter 15	Sanctioned/Recognized Nov 2025

Reliance on licensed brands (e.g., Michael Kors, which was extended in February 2025) creates ongoing license renewal risk.

The core of Fossil Group's business model relies heavily on its portfolio of licensed brands, which is a constant legal risk. While the company owns brands like Fossil and Skagen, a significant portion of its revenue comes from partners like Michael Kors, Emporio Armani, and Tory Burch. The non-renewal or termination of any material licenses is explicitly stated as a major risk factor in their SEC filings.

The good news is that the partnership with Michael Kors, one of its most valued licenses, was extended on February 13, 2025, through 2027. This extension provides near-term revenue stability. Still, the risk is structural: every few years, the company must successfully re-negotiate these agreements, and a failure to do so could instantly wipe out a substantial revenue stream. This is a perpetual legal and commercial risk that requires constant management.

Ongoing store rationalization involves legal risks related to lease negotiations and closures.

Fossil Group is in the middle of a major store rationalization effort to cut costs and focus on profitability. This is a necessary business move, but it carries significant legal liabilities. The plan involves closing approximately 50 more stores in 2025, following a net closure of 54 stores in 2024, which left the company with 248 stores globally at the end of 2024.

Each closure means navigating complex commercial lease agreements, which often involve early termination penalties, legal disputes with landlords, and the need for costly lease buyouts. The financial impact of this is already visible in the company's financial statements. For instance, the company reported $15.8 million in restructuring costs in the first quarter of 2025 and an additional $7.3 million in the second quarter of 2025, with a portion of these expenses being for professional services like legal counsel and consulting, directly tied to these store and operational rationalization efforts. The goal is to achieve about $100 million in SG&A savings in 2025, but the legal costs of getting out of leases are the upfront price of that future saving.

• Manage lease termination negotiations to minimize penalty fees.
• Ensure compliance with all local labor laws for store employee layoffs.
• Monitor restructuring costs, which hit $23.1 million in the first half of 2025.

Fossil Group, Inc. (FOSL) - PESTLE Analysis: Environmental factors

You need to see the environmental landscape not just as a compliance headache, but as a core operational risk and a clear opportunity for brand differentiation. Fossil Group, Inc. is defintely playing catch-up on some metrics, but their commitment to science-based targets is a strong signal to investors and consumers. The real action is in the supply chain, where climate risks directly hit your cost of goods sold (COGS).

Company is committed to Net-Zero GHG emissions by 2040, with a goal to halve emissions by 2030.

Fossil Group, Inc. has aligned its long-term strategy with the Paris Agreement's 1.5°C goal, setting ambitious, Science Based Targets initiative (SBTi)-aligned targets. The ultimate goal is to achieve Net-Zero GHG emissions by 2040. This is a crucial, long-term commitment that frames all near-term operational decisions.

For the shorter term, the company aims to halve its total emissions by 2030, using a 2021 baseline year. Progress as of the latest disclosures shows a significant reduction in direct and indirect emissions, though Scope 3 remains the dominant challenge, which is typical for a consumer goods company. Honestly, Scope 3 is where the heavy lifting is.

Here is the quick math on the progress toward the 2030 goals:

Emission Scope	2030 Reduction Target (from 2021 Baseline)	2024 Progress (Absolute Reduction from 2021 Baseline)	2022 Full-Year Emissions (Latest Reported Data)
Scope 1 & 2 (Operations)	85% reduction	15.2% reduction	8,284,700 kg CO2e (77,700 kg Scope 1 + 8,207,000 kg Scope 2)
Scope 3 (Value Chain)	45% reduction	67.9% reduction (Purchased Goods & Services only)	166,373,000 kg CO2e

What this estimate hides is the sheer scale of the Scope 3 emissions, which represent the vast majority of the company's environmental footprint-over 95% of the total 2022 figure. The reported 67.9% reduction in the largest Scope 3 category (Purchased Goods and Services) is a strong indicator, but sustained progress across all categories will be necessary to hit the 45% overall target.

Working towards a circular business model for products and packaging materials.

The shift to a circular business model-designing out waste and keeping materials in use-is a key strategic pillar. This focuses on two main areas: product design and packaging. The goal is to design owned brand products with recycling in mind by 2040, creating items that are more durable, easily repaired, or recyclable.

On the packaging front, the company has a clear, near-term target:

• Achieve 80% circular packaging materials (recyclable and/or reusable) by 2030.
• Current progress shows 6.9% of packaging is recyclable and/or reusable, made from cardboard and other paper-based materials (2024 progress).

This 6.9% figure shows a massive gap to the 80% goal, so a significant ramp-up is needed over the next five years. To be fair, they are actively recycling watch batteries and stainless steel watch bands, plus they are planning to switch all tin boxes to recycled aluminum boxes by 2030, which should help a lot with material circularity and emissions reduction.

Goal to achieve 90% traceability of raw materials, starting with the leather goods category.

Transparency in the supply chain is non-negotiable for modern consumers, especially in the leather and accessories market. Fossil Group, Inc.'s goal is to achieve 90% traceability of its raw materials to ensure both transparency and responsibility in its supply chain.

The company started this critical work with the leather goods category, which is a major revenue driver and a high-risk area for environmental and social issues. They have successfully achieved traceability down to the tannery level. This is a good start, but the next two years will be crucial as they aim to expand this traceability deeper into the leather supply chain and extend it to other product categories. The 2021 baseline showed only partial traceability in handbag and small leather goods, representing 10% of the total vendor base, so the focus is now on scaling that initial success.

Supply chain is vulnerable to climate change risks, which could cause disruptions and increase sourcing costs.

The physical risks of climate change are a clear and present danger to Fossil Group, Inc.'s global operations. As a company relying on a complex, international supply chain for raw materials and manufacturing, it is highly susceptible to climate-related disruptions.

The primary risks are tangible and financial:

• Disruption to the supply chain: Increased frequency and intensity of extreme weather events (e.g., floods, heatwaves) can interrupt production and distribution, directly impacting inventory and sales.
• Raw Material Costs: Climate change affects the availability and quality of raw materials, particularly leather, which can lead to increased sourcing costs and margin pressure.
• Operational Impact: Global offices, warehouses, and transportation partners are all at risk of disruption from severe weather.

This vulnerability means that climate adaptation policies-not just mitigation-need to be a central part of the Enterprise Risk Management (ERM) strategy, with a focus on building resilience with key manufacturing partners.

Finance: draft 13-week cash view by Friday, factoring in a 5% COGS increase from a potential raw material supply shock.