Fossil Group, Inc. (FOSL): Análise de Pestle [Jan-2025 Atualizada]

No mundo dinâmico dos acessórios de moda, o Fossil Group, Inc. está em uma interseção crítica de inovação, desafios de mercado e tendências transformadoras. Esta análise abrangente de pestles revela o cenário complexo que molda as decisões estratégicas da empresa, explorando as forças externas multifacetadas que impulsionam seu ecossistema de negócios globais. Desde a navegação de políticas comerciais complexas até a resposta a tecnologias de consumidores em rápida evolução, o Fossil deve equilibrar magistralmente avanço tecnológico, imperativos de sustentabilidade e adaptabilidade de mercado para manter sua vantagem competitiva nos mercados de tecnologia e acessórios de moda ferozmente contestados.

Fossil Group, Inc. (FOSL) - Análise de Pestle: Fatores Políticos

Políticas comerciais dos EUA que afetam a fabricação e importação global de relógios e acessórios

A partir de 2024, o Fossil Group enfrenta desafios significativos com as políticas comerciais dos EUA:

Política comercial	Taxa tarifária	Impacto no grupo fóssil
Seção 301 Tarifas na China	25% nos componentes de relógio	Aumento dos custos de produção
Acordo de Comércio da USMCA	Tarifas reduzidas em 6,5%	Economia de custo de fabricação potencial

Potenciais tensões geopolíticas que afetam as operações da cadeia de suprimentos na Ásia

A paisagem geopolítica atual que afeta as operações asiáticas do grupo fóssil:

• Tensões por China-Taiwan aumentando o risco da cadeia de suprimentos
• Restrições para exportação de semicondutores dos EUA que afetam os componentes de tecnologia
• Potenciais interrupções comerciais nos centros de fabricação do sudeste asiático

Acordos comerciais internacionais influenciando estratégias de produção e distribuição

Acordo de Comércio	Data efetiva	Impacto potencial de custo
Acordo abrangente e progressivo para a Parceria Transpacífica (CPTPP)	Janeiro de 2024	Redução estimada de 3,2% nos custos de importação/exportação
Parceria econômica abrangente regional (RCEP)	Novembro de 2020	Potencial 2,8% de redução de custo de fabricação

Mudanças regulatórias na eletrônica de consumo e nos mercados de tecnologia vestível

Principais desenvolvimentos regulatórios que afetam o grupo fóssil:

• Regulamentos da FCC sobre comunicação sem fio em dispositivos vestíveis
• Requisitos de conformidade da Regulamentação Geral de Proteção de Dados (GDPR) da UE (GDPR)
• Mandatos de proteção de dados da Lei de Privacidade do Consumidor da Califórnia (CCPA)

Órgão regulatório	Custo de conformidade	Penalidade potencial
FCC	US $ 250.000 Investimento anual de conformidade	Até US $ 100.000 por violação
GDPR da UE	US $ 350.000 investimentos anuais de conformidade	Até € 20 milhões ou 4% da receita global

Fossil Group, Inc. (FOSL) - Análise de Pestle: Fatores econômicos

Gastos flutuantes do consumidor em acessórios de luxo e segmentos de relógio de moda

A receita do Fossil Group em acessórios e relógios de luxo para 2023 foi de US $ 1,47 bilhão, representando um declínio de 3,2% em relação ao ano anterior. O mercado global de relógios de luxo foi avaliado em US $ 39,2 bilhões em 2023, com crescimento projetado para US $ 43,6 bilhões até 2025.

Ano	Receita total	Receita de acessórios de luxo	Assista à receita do segmento
2022	US $ 1,52 bilhão	US $ 685 milhões	US $ 785 milhões
2023	US $ 1,47 bilhão	US $ 662 milhões	US $ 758 milhões

Impacto das incertezas econômicas globais nas compras discricionárias de consumidores

Os gastos discricionários do consumidor nos Estados Unidos diminuíram 2,7% em 2023, impactando diretamente as vendas do Fossil Group. A margem bruta da empresa contratou de 53,4% em 2022 a 51,2% em 2023.

Taxa de câmbio Volatilidade que afeta os fluxos de receita internacional

Grupo fóssil experimentado US $ 42,3 milhões em perdas de tradução de câmbio Durante 2023, os mercados internacionais contribuíram com aproximadamente 38% da receita total da empresa, com exposição significativa aos mercados europeus e asiáticos.

Região	Contribuição da receita	Impacto em moeda
Europa	22%	-US $ 18,7 milhões
Ásia -Pacífico	16%	-US $ 23,6 milhões

Desafios contínuos na transformação do mercado de varejo e competição de comércio eletrônico

As vendas de comércio eletrônico para o grupo fóssil aumentaram para 35,6% da receita total em 2023, acima de 29,4% em 2022. A competição de varejo on-line se intensificou, com canais de vendas digitais experimentando um crescimento de 12,5% no mercado de acessórios de luxo.

Canal de vendas	2022 Receita	2023 Receita	Taxa de crescimento
Varejo físico	US $ 971 milhões	US $ 946 milhões	-2.6%
Comércio eletrônico	US $ 549 milhões	US $ 524 milhões	-4.5%

Fossil Group, Inc. (FOSL) - Análise de Pestle: Fatores sociais

Mudança de preferências do consumidor para relógios inteligentes e tecnologia digital vestível

O tamanho do mercado global de smartwatch atingiu US $ 22,46 bilhões em 2022, projetado para crescer para US $ 61,98 bilhões até 2030 com um CAGR de 13,5%. O segmento de smartwatch do Fossil Group representou 28,4% de sua receita total de tecnologia vestível em 2023.

Ano	Tamanho do mercado do smartwatch	Receita Fossil Smartwatch
2022	US $ 22,46 bilhões	US $ 157,3 milhões
2023	US $ 32,85 bilhões	US $ 201,4 milhões

Crescente demanda por acessórios de moda sustentáveis ​​e eticamente produzidos

73% dos consumidores globais consideram a sustentabilidade ao comprar acessórios de moda. O grupo fóssil relatou 15,6% de sua linha de produtos incorporou materiais reciclados em 2023.

Métrica de sustentabilidade	Percentagem
Consumidores priorizando moda sustentável	73%
Produtos materiais reciclados fósseis	15.6%

Tendências do consumidor milenar e da geração Z enfatizando a autenticidade da marca e o engajamento digital

86% dos millennials e os consumidores da geração Z esperam que as marcas demonstrem responsabilidade social. O envolvimento digital do Fossil Group aumentou 42% em 2023, com 2,3 milhões de seguidores de mídia social.

Métrica de engajamento digital	Valor
Seguidores de mídia social	2,3 milhões
Crescimento de engajamento digital	42%

Crescente interesse do consumidor em produtos de moda personalizados e personalizáveis

O mercado de moda personalizado que deve atingir US $ 31,5 bilhões até 2026. O Fossil Group introduziu 17 novas opções de personalização em sua linha de produtos durante 2023.

Métrica de personalização	Valor
Tamanho personalizado do mercado de moda (projeção 2026)	US $ 31,5 bilhões
Opções de personalização fósseis adicionadas em 2023	17

Fossil Group, Inc. (FOSL) - Análise de Pestle: Fatores tecnológicos

Evolução rápida de smartwatch e tecnologias de dispositivos conectados

O posicionamento do mercado do SmartWatch do Fossil Group reflete as seguintes métricas tecnológicas:

Métrica de tecnologia	Dados específicos
Investimento anual de P&D em tecnologia vestível	US $ 42,3 milhões em 2023
Aplicativos de patente de dispositivo conectado	17 novas patentes de tecnologia arquivadas
Velocidade de processamento do smartwatch	1,2 GHz Processador de núcleo duplo
Vida de bateria para o mais recente modelo de smartwatch	Uso contínuo de 24 horas

Investimento em plataformas digitais e recursos de comércio eletrônico

Métricas de investimento em plataforma digital:

• Orçamento de tecnologia da plataforma digital: US $ 23,7 milhões em 2023
• Site de comércio eletrônico Tráfego: 3,2 milhões de visitantes mensais
• Taxa de download de aplicativos móveis: 450.000 novos downloads por trimestre
• Porcentagem de vendas on -line: 37% da receita total

Integração de recursos avançados de rastreamento e monitoramento de saúde

Recurso de monitoramento da saúde	Especificação técnica
Precisão de monitoramento da frequência cardíaca	± 2 batimentos por minuto
Precisão de rastreamento do sono	Precisão de 95%
Detecção de nível de estresse	Monitoramento em tempo real com algoritmos AI
Tecnologia do sensor	Acelerômetro e giroscópio de 6 eixos

Tendências emergentes em realidade aumentada e experiências de produtos digitais

Investimentos de tecnologia de realidade aumentada:

• Orçamento de desenvolvimento de AR: US $ 15,6 milhões
• Plataformas de visualização do produto AR: 3 fluxos de desenvolvimento ativo
• Precisão de tecnologia de tentativa virtual: 92% Taxa de satisfação do cliente
• Tempo de interação do produto digital: média de 4,7 minutos por sessão do usuário

Fossil Group, Inc. (FOSL) - Análise de Pestle: Fatores Legais

Proteção de propriedade intelectual para inovações de design e tecnologia

A partir de 2024, o grupo fóssil possui 27 patentes de design ativo no Escritório de Patentes e Marcas dos Estados Unidos (USPTO). A empresa investiu aproximadamente US $ 3,2 milhões em estratégias de proteção de propriedade intelectual durante o ano fiscal de 2023.

Categoria de patentes	Número de patentes ativas	Custo de proteção anual
Design de smartwatch	12	US $ 1,5 milhão
Tecnologia vestível	8	US $ 1,1 milhão
Mecanismo de relógio híbrido	7	$600,000

Conformidade com os regulamentos internacionais de segurança e fabricação de produtos

O Fossil Group mantém a conformidade com vários padrões internacionais de segurança, incluindo:

• Certificação de gestão da qualidade ISO 9001: 2015
• CE Marca Conformidade para o Espaço Econômico Europeu
• Certificação FCC para dispositivos eletrônicos

Padrão regulatório	Custo de conformidade	Frequência de auditoria
Mark CE	$425,000	Anual
Diretiva ROHS	$275,000	Semestral
Regulamento de alcance	$350,000	Anual

Leis de privacidade e proteção de dados

O grupo fóssil aloca US $ 2,7 milhões anualmente Para garantir a conformidade com os regulamentos globais de proteção de dados, incluindo GDPR e CCPA.

Regulamento	Investimentos de conformidade	Medidas de proteção de dados
GDPR (União Europeia)	US $ 1,2 milhão	Armazenamento de dados de usuário criptografado
CCPA (Califórnia)	$850,000	Plataforma de gerenciamento de consentimento do usuário
Pipeda (Canadá)	$650,000	Sistema de notificação de violação de dados

Riscos potenciais de litígios em tecnologia de tecnologia e design de patentes

Em 2023, o grupo fóssil enfrentou 3 desafios legais relacionados a patentes, com os gastos com defesa legal total atingindo US $ 1,9 milhão.

Tipo de litígio	Número de casos	Despesas legais
Defesa de violação de patente	2	US $ 1,3 milhão
Disputa de patente de design	1	$600,000

Fossil Group, Inc. (FOSL) - Análise de Pestle: Fatores Ambientais

Compromisso com práticas e materiais de fabricação sustentáveis

O Fossil Group implementou uma estratégia de sustentabilidade direcionada a 100% de poliéster reciclado em tiras de relógio até 2025. A partir de 2023, a empresa alcançou 41% de uso de poliéster reciclado na produção de bandas de relógios.

Tipo de material	Porcentagem de conteúdo reciclado	Ano -alvo
Assista tiras	41%	2025
Materiais de embalagem	35%	2024

Reduzindo a pegada de carbono em redes globais de produção e distribuição

O Fossil Group relatou uma redução de 22% nas emissões de carbono nas operações globais da cadeia de suprimentos em 2023, com uma redução de 50% direcionada até 2030.

Métrica de redução de emissão	Progresso atual	Ano -alvo
Redução de emissões de carbono	22%	2030
Uso de energia renovável	27%	2025

Implementando princípios de economia circular no design e ciclo de vida do produto

O Fossil Group lançou um programa de retomada de produto, recuperando aproximadamente 15.000 relógios para reciclagem em 2023, representando 0,8% do volume anual de produção.

Iniciativa de Economia Circular	2023 desempenho	Taxa de recuperação
Assista ao programa de reciclagem	15.000 unidades	0.8%

Crescente demanda do consumidor por práticas de marca ambientalmente responsáveis

A pesquisa do consumidor indica 68% das metas demográficas da Fossil priorizam ofertas sustentáveis ​​de produtos, impulsionando a estratégia ambiental da empresa.

Preferência de sustentabilidade do consumidor	Percentagem	Segmento de mercado
Compra orientada a sustentabilidade	68%	18-35 faixa etária

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.