Fossil Group, Inc. (FOSL): Análisis PESTLE [Actualizado en Ene-2025]

En el mundo dinámico de los accesorios de moda, Fossil Group, Inc. se encuentra en una intersección crítica de innovación, desafíos del mercado y tendencias transformadoras. Este análisis integral de mano presenta el complejo panorama que da forma a las decisiones estratégicas de la compañía, explorando las fuerzas externas multifacéticas que impulsan su ecosistema comercial global. Desde la navegación de políticas comerciales intrincadas hasta responder a las tecnologías de consumo en rápida evolución, FOSSIL debe equilibrar magistralmente el avance tecnológico, los imperativos de sostenibilidad y la adaptabilidad del mercado para mantener su ventaja competitiva en los mercados de tecnología portátil y accesorios de moda ferozmente disputados.

Fossil Group, Inc. (FOSL) - Análisis de mortero: factores políticos

Políticas comerciales de EE. UU. Afectan la fabricación global e importación/exportación de relojes y accesorios

A partir de 2024, Fossil Group enfrenta desafíos significativos con las políticas comerciales de los Estados Unidos:

Política comercial	Tarifa	Impacto en el grupo fósil
Sección 301 Aranceles sobre China	25% en componentes de reloj	Mayores costos de producción
Acuerdo comercial de USMCA	Aranceles reducidos en un 6.5%	Ahorro potencial de costos de fabricación

Posibles tensiones geopolíticas que afectan las operaciones de la cadena de suministro en Asia

Paisaje geopolítico actual que afecta las operaciones asiáticas del Grupo Fósil:

• Tensiones de China-Taiwán aumentando el riesgo de la cadena de suministro
• Restricciones de exportación de semiconductores de EE. UU. Impactos de los componentes de la tecnología
• Posibles interrupciones comerciales en los centros de fabricación del sudeste asiático

Acuerdos comerciales internacionales que influyen en las estrategias de producción y distribución

Acuerdo comercial	Fecha de vigencia	Impacto potencial en el costo
Acuerdo integral y progresivo para la Asociación Transpacífica (CPTPP)	Enero de 2024	Reducción estimada del 3.2% en los costos de importación/exportación
Asociación Económica Integral Regional (RCEP)	Noviembre de 2020	Potencial de 2.8% de reducción de costos de fabricación

Cambios regulatorios en la electrónica de consumo y los mercados de tecnología portátil

Desarrollos regulatorios clave que impacta el grupo fósil:

• Regulaciones de la FCC sobre comunicación inalámbrica en dispositivos portátiles
• Requisitos de cumplimiento del Reglamento General de Protección de Datos de la UE (GDPR)
• Mandatos de protección de datos de la Ley de Privacidad del Consumidor de California (CCPA)

Cuerpo regulador	Costo de cumplimiento	Penalización potencial
FCC	Inversión de cumplimiento anual de $ 250,000	Hasta $ 100,000 por violación
GDPR de la UE	Inversión de cumplimiento anual de $ 350,000	Hasta € 20 millones o el 4% de los ingresos globales

Fossil Group, Inc. (FOSL) - Análisis de mortero: factores económicos

Fluctuando el gasto del consumidor en accesorios de lujo y segmentos de reloj de moda

Los ingresos de Fossil Group en accesorios y relojes de lujo para 2023 fueron de $ 1.47 mil millones, lo que representa una disminución del 3.2% del año anterior. El mercado mundial de relojes de lujo se valoró en $ 39.2 mil millones en 2023, con un crecimiento proyectado a $ 43.6 mil millones para 2025.

Año	Ingresos totales	Ingresos de accesorios de lujo	Mira los ingresos del segmento
2022	$ 1.52 mil millones	$ 685 millones	$ 785 millones
2023	$ 1.47 mil millones	$ 662 millones	$ 758 millones

Impacto de las incertidumbres económicas globales en las compras discrecionales del consumidor

El gasto discrecional del consumidor en los Estados Unidos disminuyó en un 2,7% en 2023, impactando directamente las ventas del Grupo Fósil. El margen bruto de la compañía se contrajo de 53.4% ​​en 2022 a 51.2% en 2023.

Volatilidad del tipo de cambio de divisas que afectan los flujos de ingresos internacionales

Grupo fósil experimentado $ 42.3 millones en pérdidas de traducción de divisas Durante 2023. Los mercados internacionales contribuyeron aproximadamente al 38% de los ingresos totales de la compañía, con una exposición significativa a los mercados europeos y asiáticos.

Región	Contribución de ingresos	Impacto en la moneda
Europa	22%	-$ 18.7 millones
Asia Pacífico	16%	-$ 23.6 millones

Desafíos continuos en la transformación del mercado minorista y la competencia de comercio electrónico

Las ventas de comercio electrónico para Fossil Group aumentaron al 35.6% de los ingresos totales en 2023, frente al 29.4% en 2022. Competencia minorista en línea intensificada, con canales de ventas digitales que experimentan un crecimiento del 12.5% ​​en el mercado de accesorios de lujo.

Canal de ventas	2022 Ingresos	2023 ingresos	Índice de crecimiento
Minorista física	$ 971 millones	$ 946 millones	-2.6%
Comercio electrónico	$ 549 millones	$ 524 millones	-4.5%

Fossil Group, Inc. (FOSL) - Análisis de mortero: factores sociales

Cambiando las preferencias del consumidor hacia los relojes inteligentes y la tecnología de portátiles digitales

El tamaño del mercado global de relojes inteligentes alcanzó los $ 22.46 mil millones en 2022, proyectado para crecer a $ 61.98 mil millones para 2030 con una tasa compuesta anual del 13.5%. El segmento de relojes inteligentes de Fossil Group representó el 28.4% de sus ingresos totales de tecnología portátil en 2023.

Año	Tamaño del mercado de Smartwatch	Ingresos de reloj inteligente fossil
2022	$ 22.46 mil millones	$ 157.3 millones
2023	$ 32.85 mil millones	$ 201.4 millones

Aumento de la demanda de accesorios de moda sostenibles y producidos éticamente

El 73% de los consumidores globales consideran la sostenibilidad al comprar accesorios de moda. Fossil Group reportó 15.6% de su línea de productos incorporó materiales reciclados en 2023.

Métrica de sostenibilidad	Porcentaje
Los consumidores priorizan la moda sostenible	73%
Productos de material reciclado fósil	15.6%

Tendencias del consumidor Millennial y Gen Z enfatizando la autenticidad de la marca y el compromiso digital

El 86% de los consumidores de Millennials y Gen Z esperan que las marcas demuestren responsabilidad social. El compromiso digital del Grupo Fossil aumentó en un 42% en 2023, con 2.3 millones de seguidores en las redes sociales.

Métrica de compromiso digital	Valor
Seguidores de redes sociales	2.3 millones
Crecimiento de compromiso digital	42%

Creciente interés del consumidor en productos de moda personalizados y personalizables

Se espera que el mercado de moda personalizado alcance los $ 31.5 mil millones para 2026. Fossil Group introdujo 17 nuevas opciones de personalización en su línea de productos durante 2023.

Métrico de personalización	Valor
Tamaño personalizado del mercado de la moda (proyección 2026)	$ 31.5 mil millones
Opciones de personalización fósil agregadas en 2023	17

Fossil Group, Inc. (FOSL) - Análisis de mortero: factores tecnológicos

Evolución rápida de tecnologías de relojes inteligentes y dispositivos conectados

El posicionamiento del mercado de relojes inteligentes de Fossil Group refleja las siguientes métricas tecnológicas:

Métrica de tecnología	Datos específicos
Inversión anual de I + D en tecnología portátil	$ 42.3 millones en 2023
Aplicaciones de patentes de dispositivo conectado	17 nuevas patentes de tecnología archivadas
Velocidad de procesamiento de relojes inteligentes	Procesador de doble núcleo de 1.2 GHz
Duración de la batería para el último modelo de reloj inteligente	Uso continuo de 24 horas

Inversión en plataformas digitales y capacidades de comercio electrónico

Métricas de inversión de plataforma digital:

• Presupuesto de tecnología de plataforma digital: $ 23.7 millones en 2023
• Tráfico del sitio web de comercio electrónico: 3.2 millones de visitantes mensuales
• Tasa de descarga de la aplicación móvil: 450,000 descargas nuevas por trimestre
• Porcentaje de ventas en línea: 37% de los ingresos totales

Integración de características avanzadas de seguimiento y monitoreo de salud

Función de monitoreo de salud	Especificación técnica
Precisión de monitoreo de la frecuencia cardíaca	± 2 latidos por minuto
Precisión de seguimiento del sueño	95% de precisión
Detección de nivel de estrés	Monitoreo en tiempo real con algoritmos de IA
Tecnología de sensores	Acelerómetro y giroscopio de 6 ejes

Tendencias emergentes en la realidad aumentada y las experiencias de productos digitales

Inversiones de tecnología de realidad aumentada:

• Presupuesto de desarrollo de AR: $ 15.6 millones
• Plataformas de visualización de productos AR: 3 flujos de desarrollo activo
• Precisión de tecnología de prueba virtual: 92% Tasa de satisfacción del cliente
• Tiempo de interacción del producto digital: promedio de 4.7 minutos por sesión de usuario

Fossil Group, Inc. (FOSL) - Análisis de mortero: factores legales

Protección de propiedad intelectual para innovaciones de diseño y tecnología

A partir de 2024, el grupo fossil posee 27 patentes de diseño activos en la Oficina de Patentes y Marcas de los Estados Unidos (USPTO). La compañía ha invertido aproximadamente $ 3.2 millones en estrategias de protección de propiedad intelectual durante el año fiscal 2023.

Categoría de patente	Número de patentes activas	Costo de protección anual
Diseño de reloj inteligente	12	$ 1.5 millones
Tecnología portátil	8	$ 1.1 millones
Mecanismo de reloj híbrido	7	$600,000

Cumplimiento de las regulaciones internacionales de seguridad y fabricación de productos

Fossil Group mantiene el cumplimiento de múltiples estándares de seguridad internacionales, que incluyen:

• Certificación ISO 9001: 2015 de gestión de calidad
• CELICITA DE CEMA CELITA PARA ELECURA Europa europea
• Certificación FCC para dispositivos electrónicos

Reglamentario	Costo de cumplimiento	Frecuencia de auditoría
Marca	$425,000	Anual
Directiva de ROHS	$275,000	Semestral
Alcanzar regulación	$350,000	Anual

Leyes de privacidad y protección de datos

El grupo fósil asigna $ 2.7 millones anualmente Para garantizar el cumplimiento de las regulaciones globales de protección de datos, incluidos GDPR y CCPA.

Regulación	Inversiones de cumplimiento	Medidas de protección de datos
GDPR (Unión Europea)	$ 1.2 millones	Almacenamiento de datos de usuario cifrado
CCPA (California)	$850,000	Plataforma de gestión de consentimiento de usuarios
Pipeda (Canadá)	$650,000	Sistema de notificación de violación de datos

Posibles riesgos de litigios en la tecnología y el diseño de dominios de patentes

En 2023, el grupo fósil se enfrentó 3 desafíos legales relacionados con la patente, con los gastos de defensa legal totales que alcanzan los $ 1.9 millones.

Tipo de litigio	Número de casos	Gastos legales
Defensa de infracción de patentes	2	$ 1.3 millones
Diseño de disputa de patentes	1	$600,000

Fossil Group, Inc. (FOSL) - Análisis de mortero: factores ambientales

Compromiso con prácticas y materiales de fabricación sostenible

Fossil Group ha implementado una estrategia de sostenibilidad dirigida al 100% de poliéster reciclado en las correas de vigilancia para 2025. A partir de 2023, la compañía ha logrado el 41% de uso de poliéster reciclado en la producción de bandas de vigilancia.

Tipo de material	Porcentaje de contenido reciclado	Año objetivo
Mira correas	41%	2025
Materiales de embalaje	35%	2024

Reducción de la huella de carbono en las redes de producción y distribución global

Fossil Group informó una reducción del 22% en las emisiones de carbono en las operaciones globales de la cadena de suministro en 2023, con una reducción específica del 50% para 2030.

Métrica de reducción de emisiones	Progreso actual	Año objetivo
Reducción de emisiones de carbono	22%	2030
Uso de energía renovable	27%	2025

Implementación de principios de economía circular en diseño de productos y ciclo de vida

Fossil Group ha lanzado un programa de recuperación de productos, recuperando aproximadamente 15,000 relojes para reciclar en 2023, lo que representa el 0.8% del volumen de producción anual.

Iniciativa de economía circular	2023 rendimiento	Tasa de recuperación
Mira el programa de reciclaje	15,000 unidades	0.8%

Creciente demanda de consumidores de prácticas de marca ambientalmente responsables

La investigación del consumidor indica que el 68% del grupo demográfico objetivo de Fossil prioriza las ofertas de productos sostenibles, impulsando la estrategia ambiental de la empresa.

Preferencia de sostenibilidad del consumidor	Porcentaje	Segmento de mercado
Compras impulsadas por la sostenibilidad	68%	18-35 grupo de edad

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.