QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Ticker Symbol | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | ☒ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
June 29, 2024 | December 30, 2023 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable - net of allowances for doubtful accounts of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment - net of accumulated depreciation of $ | |||||||||||
Operating lease right-of-use assets | |||||||||||
Intangible and other assets-net | |||||||||||
Total long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Short-term debt | |||||||||||
Accrued expenses: | |||||||||||
Current operating lease liabilities | |||||||||||
Compensation | |||||||||||
Royalties | |||||||||||
Customer liabilities | |||||||||||
Transaction taxes | |||||||||||
Other | |||||||||||
Income taxes payable | |||||||||||
Total current liabilities | |||||||||||
Long-term income taxes payable | |||||||||||
Deferred income tax liabilities | |||||||||||
Long-term debt | |||||||||||
Long-term operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Commitments and contingencies (Note 13) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, | |||||||||||
Additional paid-in capital | |||||||||||
Retained (deficit) earnings | ( | ||||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Total Fossil Group, Inc. stockholders’ equity | |||||||||||
Noncontrolling interests | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Other long-lived asset impairments | |||||||||||||||||||||||
Restructuring expenses | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Other income (expense) - net | |||||||||||||||||||||||
Income (loss) before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Provision (benefit) for income taxes | ( | ( | ( | ||||||||||||||||||||
Net income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss), net of taxes: | |||||||||||||||||||||||
Currency translation adjustment | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Cash flow hedges - net change | ( | ( | |||||||||||||||||||||
Pension plan activity | ( | ||||||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Total comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
Comprehensive income (loss) attributable to Fossil Group, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Earnings (loss) per share: | |||||||||||||||||||||||
Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
For the 13 Weeks Ended June 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Treasury stock | Retained (deficit) earnings | Accumulated other comprehensive income (loss) | Stockholders' equity attributable to Fossil Group, Inc. | Noncontrolling interest | Total stockholders' equity | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par value | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of common stock for employee tax withholding | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Retirement of common stock | ( | ( | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 29, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ |
For the 13 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Treasury stock | Retained (deficit) earnings | Accumulated other comprehensive income (loss) | Stockholders' equity attributable to Fossil Group, Inc. | Noncontrolling interest | Total stockholders' equity | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par value | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 1, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of common stock for employee tax withholding | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Retirement of common stock | ( | ( | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance, July 1, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ |
For the 26 Weeks Ended June 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Treasury stock | Retained (deficit) earnings | Accumulated other comprehensive income (loss) | Stockholders' equity attributable to Fossil Group, Inc. | Noncontrolling interest | Total stockholders' equity | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par value | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 30, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of common stock for employee tax withholding | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Retirement of common stock | ( | ( | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance, June 29, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ |
For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Treasury stock | Retained (deficit) earnings | Accumulated other comprehensive income (loss) | Stockholders' equity attributable to Fossil Group, Inc. | Noncontrolling interest | Total stockholders' equity | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par value | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of common stock | — | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Retirement of common stock | ( | ( | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance, July 1, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | ( | $ |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||
Operating Activities: | |||||||||||
Net income (loss) | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation, amortization and accretion | |||||||||||
Non-cash lease expense | |||||||||||
Stock-based compensation | |||||||||||
Decrease in allowance for returns and markdowns | ( | ( | |||||||||
Property, plant and equipment and other long-lived asset impairment losses | |||||||||||
Non-cash restructuring charges | |||||||||||
Bad debt expense | ( | ||||||||||
Other non-cash items | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | ( | ||||||||||
Accounts payable | ( | ( | |||||||||
Accrued expenses | ( | ( | |||||||||
Income taxes | ( | ( | |||||||||
Operating lease liabilities | ( | ( | |||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Investing Activities: | |||||||||||
Additions to property, plant and equipment and other | ( | ( | |||||||||
Decrease (increase) in intangible and other assets | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing Activities: | |||||||||||
Acquisition of common stock | ( | ( | |||||||||
Debt borrowings | |||||||||||
Debt payments | ( | ( | |||||||||
Payment for shares of Fossil Accessories South Africa Pty. Ltd. | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | ( | ||||||||||
Net decrease in cash, cash equivalents, and restricted cash | ( | ( | |||||||||
Cash, cash equivalents, and restricted cash: | |||||||||||
Beginning of period | |||||||||||
End of period | $ | $ |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Basic EPS computation: | |||||||||||||||||||||||
Basic weighted average common shares outstanding | |||||||||||||||||||||||
Basic EPS | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted EPS computation: | |||||||||||||||||||||||
Diluted weighted average common shares outstanding | |||||||||||||||||||||||
Diluted EPS | $ | ( | $ | ( | $ | ( | $ | ( |
June 29, 2024 | July 1, 2023 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash included in prepaid expenses and other current assets | |||||||||||
Restricted cash included in intangible and other assets-net | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ |
For the 13 Weeks Ended June 29, 2024 | |||||||||||||||||||||||||||||
Americas | Europe | Asia | Corporate | Total | |||||||||||||||||||||||||
Product type | |||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||
Traditional watches | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Smartwatches | |||||||||||||||||||||||||||||
Total watches | |||||||||||||||||||||||||||||
Leathers | |||||||||||||||||||||||||||||
Jewelry | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Timing of revenue recognition | |||||||||||||||||||||||||||||
Revenue recognized at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Revenue recognized over time | |||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ |
For the 13 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||||||
Americas | Europe | Asia | Corporate | Total | |||||||||||||||||||||||||
Product type | |||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||
Traditional watches | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Smartwatches | |||||||||||||||||||||||||||||
Total watches | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Leathers | |||||||||||||||||||||||||||||
Jewelry | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Timing of revenue recognition | |||||||||||||||||||||||||||||
Revenue recognized at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Revenue recognized over time | |||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ |
For the 26 Weeks Ended June 29, 2024 | |||||||||||||||||||||||||||||
Americas | Europe | Asia | Corporate | Total | |||||||||||||||||||||||||
Product type | |||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||
Traditional watches | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Smartwatches | |||||||||||||||||||||||||||||
Total watches | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Leathers | |||||||||||||||||||||||||||||
Jewelry | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Timing of revenue recognition | |||||||||||||||||||||||||||||
Revenue recognized at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Revenue recognized over time | |||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||||||
Americas | Europe | Asia | Corporate | Total | |||||||||||||||||||||||||
Product type | |||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||
Traditional watches | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Smartwatches | |||||||||||||||||||||||||||||
Total watches | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Leathers | |||||||||||||||||||||||||||||
Jewelry | |||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Timing of revenue recognition | |||||||||||||||||||||||||||||
Revenue recognized at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Revenue recognized over time | |||||||||||||||||||||||||||||
Consolidated | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
June 29, 2024 | December 30, 2023 | ||||||||||
Components and parts | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
Inventories | $ | $ |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||
Beginning balance | $ | $ | |||||||||
Settlements in cash or kind | ( | ( | |||||||||
Warranties issued and adjustments to preexisting warranties (1) | |||||||||||
Ending balance | $ | $ |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||||||||||||
Income tax (benefit) expense | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Effective tax rate | ( | % | % | % | % |
Restricted Stock Units and Performance Restricted Stock Units | Number of Shares | Weighted-Average Grant Date Fair Value Per Share | ||||||||||||
(in Thousands) | ||||||||||||||
Nonvested at March 30, 2024 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Nonvested at June 29, 2024 | $ |
For the 13 Weeks Ended June 29, 2024 | |||||||||||||||||||||||
Currency Translation Adjustments | Cash Flow Hedges | ||||||||||||||||||||||
Forward Contracts | Pension Plan | Total | |||||||||||||||||||||
Beginning balance | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
Tax (expense) benefit | ( | ( | |||||||||||||||||||||
Amounts reclassed from accumulated other comprehensive income (loss) | |||||||||||||||||||||||
Tax (expense) benefit | |||||||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Ending balance | $ | ( | $ | $ | $ | ( |
For the 13 Weeks Ended July 1, 2023 | |||||||||||||||||||||||
Currency Translation Adjustments | Cash Flow Hedges | ||||||||||||||||||||||
Forward Contracts | Pension Plan | Total | |||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||
Tax (expense) benefit | |||||||||||||||||||||||
Amounts reclassed from accumulated other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Tax (expense) benefit | |||||||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Ending balance | $ | ( | $ | ( | $ | $ | ( |
For the 26 Weeks Ended June 29, 2024 | |||||||||||||||||||||||
Currency Translation Adjustments | Cash Flow Hedges | ||||||||||||||||||||||
Forward Contracts | Pension Plan | Total | |||||||||||||||||||||
Beginning balance | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||
Tax (expense) benefit | |||||||||||||||||||||||
Amounts reclassed from accumulated other comprehensive income | |||||||||||||||||||||||
Tax (expense) benefit | |||||||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Ending balance | $ | ( | $ | $ | $ | ( |
For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||||||||
Currency Translation Adjustments | Cash Flow Hedges | ||||||||||||||||||||||
Forward Contracts | Pension Plan | Total | |||||||||||||||||||||
Beginning balance | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
Tax (expense) benefit | |||||||||||||||||||||||
Amounts reclassed from accumulated other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Tax (expense) benefit | |||||||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Ending balance | $ | ( | $ | ( | $ | $ | ( |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | ||||||||||||||||||||||
Net Sales | Operating Income (Loss) | Net Sales | Operating Income (Loss) | ||||||||||||||||||||
Americas | $ | $ | $ | $ | |||||||||||||||||||
Europe | ( | ||||||||||||||||||||||
Asia | |||||||||||||||||||||||
Corporate | ( | ( | |||||||||||||||||||||
Consolidated | $ | $ | ( | $ | $ | ( |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||||||||||||||
Net Sales | Operating Income (Loss) | Net Sales | Operating Income (Loss) | ||||||||||||||||||||
Americas | $ | $ | $ | $ | |||||||||||||||||||
Europe | |||||||||||||||||||||||
Asia | |||||||||||||||||||||||
Corporate | ( | ( | |||||||||||||||||||||
Consolidated | $ | $ | ( | $ | $ | ( | |||||||||||||||||
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | ||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | ||||||||||||||||||||
Watches: | |||||||||||||||||||||||
Traditional watches | $ | % | $ | % | |||||||||||||||||||
Smartwatches | |||||||||||||||||||||||
Total watches | $ | % | $ | % | |||||||||||||||||||
Leathers | |||||||||||||||||||||||
Jewelry | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | % | $ | % |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | |||||||||||||||||
Watches: | ||||||||||||||||||||
Traditional watches | $ | % | $ | % | ||||||||||||||||
Smartwatches | ||||||||||||||||||||
Total watches | % | $ | % | |||||||||||||||||
Leathers | ||||||||||||||||||||
Jewelry | ||||||||||||||||||||
Other | ||||||||||||||||||||
Total | $ | % | $ | % | ||||||||||||||||
Functional Currency | Contract Currency | |||||||||||||||||||
Type | Amount | Type | Amount | |||||||||||||||||
Euro | U.S. dollar | |||||||||||||||||||
Canadian dollar | U.S. dollar | |||||||||||||||||||
British pound | U.S. dollar | |||||||||||||||||||
Japanese yen | U.S. dollar | |||||||||||||||||||
Australian dollar | U.S. dollar | |||||||||||||||||||
U.S. dollar | Japanese yen |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | ||||||||||
Cash flow hedges: | |||||||||||
Forward contracts | $ | $ | ( | ||||||||
Total gain (loss) recognized in other comprehensive income (loss), net of taxes | $ | $ | ( |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||
Cash flow hedges: | |||||||||||
Forward contracts | $ | $ | ( | ||||||||
Total gain (loss) recognized in other comprehensive income (loss), net of taxes | $ | $ | ( | ||||||||
Derivative Instruments | Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location | Effect of Derivative Instruments | For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | ||||||||||||||||||||||
Forward contracts designated as cash flow hedging instruments | Cost of sales | Total gain (loss) reclassified from accumulated other comprehensive income (loss) | $ | $ | ( | |||||||||||||||||||||
Forward contracts designated as cash flow hedging instruments | Other income (expense)-net | Total gain (loss) reclassified from accumulated other comprehensive income (loss) | $ | $ | ||||||||||||||||||||||
Forward contracts not designated as hedging instruments | Other income (expense)-net | Total gain (loss) recognized in income | $ | $ | ||||||||||||||||||||||
Derivative Instruments | Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location | Effect of Derivative Instruments | For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||||||||||||||
Forward contracts designated as cash flow hedging instruments | Cost of sales | Total gain (loss) reclassified from accumulated other comprehensive income (loss) | $ | ( | $ | ( | ||||||||||||||||||||
Forward contracts designated as cash flow hedging instruments | Other income (expense)-net | Total gain (loss) reclassified from accumulated other comprehensive income (loss) | $ | $ | ( | |||||||||||||||||||||
Forward contracts not designated as hedging instruments | Other income (expense)-net | Total gain (loss) recognized in income | $ | $ | ||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||||||||||||||||||||||||
June 29, 2024 | December 30, 2023 | June 29, 2024 | December 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Condensed Consolidated Balance Sheets Location | Fair Value | Condensed Consolidated Balance Sheets Location | Fair Value | Condensed Consolidated Balance Sheets Location | Fair Value | Condensed Consolidated Balance Sheets Location | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Forward contracts designated as cash flow hedging instruments | Prepaid expenses and other current assets | $ | Prepaid expenses and other current assets | $ | Accrued expenses-other | $ | Accrued expenses-other | $ | ||||||||||||||||||||||||||||||||||||||||||
Forward contracts not designated as cash flow hedging instruments | Prepaid expenses and other current assets | Prepaid expenses and other current assets | Accrued expenses-other | Accrued expenses-other | ||||||||||||||||||||||||||||||||||||||||||||||
Forward contracts designated as cash flow hedging instruments | Intangible and other assets-net | Intangible and other assets-net | Other long-term liabilities | Other long-term liabilities | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Effect of Derivative Instruments | ||||||||||||||||||||||||||
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||
Cost of Sales | Other Income (Expense)-net | Cost of Sales | Other Income (Expense)-net | |||||||||||||||||||||||
Total amounts of income and expense line items presented in the condensed consolidated statements of income (loss) and comprehensive income (loss) in which the effects of cash flow hedges are recorded | $ | $ | $ | $ | ||||||||||||||||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||||||||||||
Forward contracts designated as cash flow hedging instruments: | ||||||||||||||||||||||||||
Total gain (loss) reclassified from other comprehensive income (loss) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Forward contracts not designated as hedging instruments: | ||||||||||||||||||||||||||
Total gain (loss) recognized in income | $ | $ | $ | $ |
Effect of Derivative Instruments | ||||||||||||||||||||||||||
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||
Cost of Sales | Other Income (Expense)-net | Cost of Sales | Other Income (Expense)-net | |||||||||||||||||||||||
Total amounts of income and expense line items presented in the condensed consolidated statements of income (loss) and comprehensive income (loss) in which the effects of cash flow hedges are recorded | $ | $ | $ | $ | ||||||||||||||||||||||
Gain (loss) on cash flow hedging relationships: | ||||||||||||||||||||||||||
Forward contracts designated as cash flow hedging instruments: | ||||||||||||||||||||||||||
Total gain (loss) reclassified from other comprehensive income (loss) | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Forward contracts not designated as hedging instruments: | ||||||||||||||||||||||||||
Total gain (loss) recognized in income | $ | $ | $ | $ | ||||||||||||||||||||||
Fair Value at June 29, 2024 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Forward contracts | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Forward contracts | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Fair Value at December 30, 2023 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Forward contracts | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Contingent consideration | $ | $ | $ | $ | |||||||||||||||||||
Forward contracts | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
June 29, 2024 | December 30, 2023 | |||||||||||||||||||||||||||||||
Useful | Gross | Accumulated | Gross | Accumulated | ||||||||||||||||||||||||||||
Lives | Amount | Amortization | Amount | Amortization | ||||||||||||||||||||||||||||
Intangibles-subject to amortization: | ||||||||||||||||||||||||||||||||
Trademarks | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Patents | ||||||||||||||||||||||||||||||||
Trade name | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Total intangibles-subject to amortization | ||||||||||||||||||||||||||||||||
Intangibles-not subject to amortization: | ||||||||||||||||||||||||||||||||
Trade names | ||||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||
Deferred tax asset-net | ||||||||||||||||||||||||||||||||
Restricted cash | ||||||||||||||||||||||||||||||||
Debt issuance costs | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Total other assets | ||||||||||||||||||||||||||||||||
Total intangible and other assets | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Total intangible and other assets-net | $ | $ |
Fiscal Year | Amortization Expense | |||||||
2024 (remaining) | $ | |||||||
2025 | $ | |||||||
2026 | $ | |||||||
2027 | $ | |||||||
2028 | $ | |||||||
Thereafter | $ |
Lease Cost | Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location | For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||||
Operating lease cost(1) | SG&A | $ | $ | $ | $ | |||||||||||||||||||||||||||
Short-term lease cost | SG&A | $ | $ | $ | $ | |||||||||||||||||||||||||||
Variable lease cost | SG&A | $ | $ | $ | $ |
Leases | Condensed Consolidated Balance Sheets Location | June 29, 2024 | December 30, 2023 | |||||||||||||||||
Assets | ||||||||||||||||||||
Operating | Operating lease ROU assets | $ | $ | |||||||||||||||||
Liabilities | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Operating | Current operating lease liabilities | $ | $ | |||||||||||||||||
Noncurrent: | ||||||||||||||||||||
Operating | Long-term operating lease liabilities | $ | $ | |||||||||||||||||
Lease Term and Discount Rate | June 29, 2024 | December 30, 2023 | ||||||||||||
Weighted-average remaining lease term: | ||||||||||||||
Operating leases | ||||||||||||||
Weighted-average discount rate: | ||||||||||||||
Operating leases | % | % | ||||||||||||
Fiscal Year | Operating Leases | |||||||
2024 (remaining) | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
Total lease payments | $ | |||||||
Less: Interest | ||||||||
Total lease obligations | $ |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Leased assets obtained in exchange for new operating lease liabilities |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||||||||||||
Cost of sales | $ | $ | $ | ( | $ | ||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Consolidated | $ | $ | $ | $ |
For the 13 Weeks Ended June 29, 2024 | |||||||||||||||||||||||||||||
Liabilities | Liabilities | ||||||||||||||||||||||||||||
March 30, 2024 | Charges | Cash Payments | Non-cash Items | June 29, 2024 | |||||||||||||||||||||||||
Stores and facilities closures | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Professional services | |||||||||||||||||||||||||||||
Severance and employee-related benefits | |||||||||||||||||||||||||||||
Charges related to exits of certain product offerings | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
For the 13 Weeks Ended July 1, 2023 | |||||||||||||||||||||||
Liabilities | Liabilities | ||||||||||||||||||||||
April 1, 2023 | Charges | Cash Payments | July 1, 2023 | ||||||||||||||||||||
Professional services | $ | $ | $ | $ | |||||||||||||||||||
Severance and employee-related benefits | |||||||||||||||||||||||
Charges related to exits of certain product offerings | |||||||||||||||||||||||
Total |
For the 26 Weeks Ended June 29, 2024 | |||||||||||||||||||||||||||||
Liabilities | Liabilities | ||||||||||||||||||||||||||||
December 30, 2023 | Charges | Cash Payments | Non-cash Items | June 29, 2024 | |||||||||||||||||||||||||
Stores and facilities closures | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Professional services | |||||||||||||||||||||||||||||
Severance and employee-related benefits | |||||||||||||||||||||||||||||
Charges related to exits of certain product offerings | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||||||||
Liabilities | Liabilities | ||||||||||||||||||||||
December 31, 2022 | Charges | Cash Payments | July 1, 2023 | ||||||||||||||||||||
Professional services | $ | $ | $ | $ | |||||||||||||||||||
Severance and employee-related benefits | |||||||||||||||||||||||
Charges related to exits of certain product offerings | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | ||||||||||||||||||||
Americas | $ | $ | $ | $ | |||||||||||||||||||
Europe | |||||||||||||||||||||||
Asia | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Consolidated | $ | $ | $ | $ |
For the 13 Weeks Ended July 1, 2023 | |||||||||||||||||||||||
Liabilities | Liabilities | ||||||||||||||||||||||
April 1, 2023 | Cash Payments | July 1, 2023 | |||||||||||||||||||||
Professional services | $ | $ | $ | ||||||||||||||||||||
Severance and employee-related benefits | |||||||||||||||||||||||
Total | $ | $ | $ |
For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||
Liabilities | Liabilities | ||||||||||||||||
December 31, 2022 | Cash Payments | July 1, 2023 | |||||||||||||||
Professional services | $ | $ | $ | ||||||||||||||
Severance and employee-related benefits | |||||||||||||||||
Total | $ | $ | $ |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | Growth (Decline) | |||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Americas | $ | 119.6 | 46.0 | % | $ | 146.7 | 45.6 | % | $ | (27.1) | (18.5) | % | (18.5) | % | |||||||||||||||||||||||||||
Europe | 74.8 | 28.8 | 88.3 | 27.4 | (13.5) | (15.3) | (14.7) | ||||||||||||||||||||||||||||||||||
Asia | 65.2 | 25.1 | 84.1 | 26.1 | (18.9) | (22.5) | (20.2) | ||||||||||||||||||||||||||||||||||
Corporate | 0.4 | 0.1 | 2.9 | 0.9 | (2.5) | (86.2) | (86.2) | ||||||||||||||||||||||||||||||||||
Total | $ | 260.0 | 100.0 | % | $ | 322.0 | 100.0 | % | $ | (62.0) | (19.3) | % | (18.5) | % |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | ||||||||||||||||||||||||||||||||||||||||
Growth (Decline) | |||||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||||||||||||||
Traditional watches | $ | 194.1 | 74.7 | % | $ | 236.1 | 73.4 | % | $ | (42.0) | (17.8) | % | (17.1) | % | |||||||||||||||||||||||||||
Smartwatches | 8.4 | 3.2 | 17.8 | 5.5 | (9.4) | (52.8) | (52.5) | ||||||||||||||||||||||||||||||||||
Total watches | $ | 202.5 | 77.9 | % | $ | 253.9 | 78.9 | % | $ | (51.4) | (20.2) | (19.6) | |||||||||||||||||||||||||||||
Leathers | 27.2 | 10.4 | 33.3 | 10.3 | (6.1) | (18.3) | (17.7) | ||||||||||||||||||||||||||||||||||
Jewelry | 24.2 | 9.3 | 27.4 | 8.5 | (3.2) | (11.7) | (10.2) | ||||||||||||||||||||||||||||||||||
Other | 6.1 | 2.4 | 7.4 | 2.3 | (1.3) | (17.6) | (16.2) | ||||||||||||||||||||||||||||||||||
Total | $ | 260.0 | 100.0 | % | $ | 322.0 | 100.0 | % | $ | (62.0) | (19.3) | % | (18.5) | % |
July 1, 2023 | Opened | Closed | June 29, 2024 | ||||||||||||||||||||
Americas | 146 | 2 | 28 | 120 | |||||||||||||||||||
Europe | 92 | 1 | 24 | 69 | |||||||||||||||||||
Asia | 77 | 2 | 10 | 69 | |||||||||||||||||||
Total stores | 315 | 5 | 62 | 258 |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | ||||||||||||||||||||||||||||||||||||||||
Growth (Decline) | |||||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||||||||||||||
Traditional watches | $ | 87.9 | 73.5 | % | $ | 108.9 | 74.2 | % | $ | (21.0) | (19.3) | % | (19.3) | % | |||||||||||||||||||||||||||
Smartwatches | 5.5 | 4.6 | 8.4 | 5.7 | (2.9) | (34.5) | (34.5) | ||||||||||||||||||||||||||||||||||
Total watches | $ | 93.4 | 78.1 | % | $ | 117.3 | 79.9 | % | $ | (23.9) | (20.4) | (20.4) | |||||||||||||||||||||||||||||
Leathers | 18.2 | 15.2 | 21.0 | 14.3 | (2.8) | (13.3) | (13.3) | ||||||||||||||||||||||||||||||||||
Jewelry | 5.5 | 4.6 | 6.2 | 4.2 | (0.7) | (11.3) | (11.3) | ||||||||||||||||||||||||||||||||||
Other | 2.5 | 2.1 | 2.2 | 1.6 | 0.3 | 13.6 | 9.1 | ||||||||||||||||||||||||||||||||||
Total | $ | 119.6 | 100.0 | % | $ | 146.7 | 100.0 | % | $ | (27.1) | (18.5) | % | (18.5) | % |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | ||||||||||||||||||||||||||||||||||||||||
Growth (Decline) | |||||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||||||||||||||
Traditional watches | $ | 55.6 | 74.3 | % | $ | 59.4 | 67.3 | % | $ | (3.8) | (6.4) | % | (5.7) | % | |||||||||||||||||||||||||||
Smartwatches | 0.5 | 0.7 | 5.3 | 6.0 | (4.8) | (90.6) | (90.6) | ||||||||||||||||||||||||||||||||||
Total watches | $ | 56.1 | 75.0 | % | $ | 64.7 | 73.3 | % | $ | (8.6) | (13.3) | (12.7) | |||||||||||||||||||||||||||||
Leathers | 3.7 | 4.9 | 5.0 | 5.7 | (1.3) | (26.0) | (24.0) | ||||||||||||||||||||||||||||||||||
Jewelry | 12.2 | 16.3 | 15.4 | 17.4 | (3.2) | (20.8) | (20.1) | ||||||||||||||||||||||||||||||||||
Other | 2.8 | 3.8 | 3.2 | 3.6 | (0.4) | (12.5) | (15.6) | ||||||||||||||||||||||||||||||||||
Total | $ | 74.8 | 100.0 | % | $ | 88.3 | 100.0 | % | $ | (13.5) | (15.3) | % | (14.7) | % |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | ||||||||||||||||||||||||||||||||||||||||
Growth (Decline) | |||||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||||||||||||||
Traditional watches | $ | 50.5 | 77.5 | % | $ | 65.9 | 78.4 | % | $ | (15.4) | (23.4) | % | (21.4) | % | |||||||||||||||||||||||||||
Smartwatches | 2.3 | 3.5 | 4.1 | 4.9 | (1.8) | (43.9) | (41.5) | ||||||||||||||||||||||||||||||||||
Total watches | $ | 52.8 | 81.0 | % | $ | 70.0 | 83.3 | % | $ | (17.2) | (24.6) | (22.6) | |||||||||||||||||||||||||||||
Leathers | 5.3 | 8.1 | 7.4 | 8.8 | (2.1) | (28.4) | (27.0) | ||||||||||||||||||||||||||||||||||
Jewelry | 6.5 | 10.0 | 5.8 | 6.9 | 0.7 | 12.1 | 17.2 | ||||||||||||||||||||||||||||||||||
Other | 0.6 | 0.9 | 0.9 | 1.0 | (0.3) | (33.3) | (33.3) | ||||||||||||||||||||||||||||||||||
Total | $ | 65.2 | 100.0 | % | $ | 84.1 | 100.0 | % | $ | (18.9) | (22.5) | % | (20.2) | % |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | Change | Operating Margin % | ||||||||||||||||||||||||||||||||
Dollars | Percentage | 2024 | 2023 | ||||||||||||||||||||||||||||||||
Americas | $ | 14.6 | $ | 23.4 | $ | (8.8) | (37.6) | % | 12.2 | % | 16.0 | % | |||||||||||||||||||||||
Europe | 10.0 | (0.7) | 10.7 | (1,528.6) | 13.3 | (0.8) | |||||||||||||||||||||||||||||
Asia | 6.0 | 7.4 | (1.4) | (18.9) | 9.2 | 8.8 | |||||||||||||||||||||||||||||
Corporate | (64.6) | (65.4) | 0.8 | 1.2 | |||||||||||||||||||||||||||||||
Total operating income (loss) | $ | (34.0) | $ | (35.3) | $ | 1.3 | (3.7) | % | (13.1) | % | (11.0) | % |
For the 13 Weeks Ended June 29, 2024 | For the 13 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||
Dollars | % of Net Sales | Dollars | % of Net Sales | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (36.6) | (14.1)% | $ | (33.5) | (10.4) | % | |||||||||||||||||||
Plus: | ||||||||||||||||||||||||||
Interest expense | 4.1 | 5.3 | ||||||||||||||||||||||||
Amortization and depreciation | 3.9 | 4.8 | ||||||||||||||||||||||||
Other long-lived asset impairments | 0.6 | 0.2 | ||||||||||||||||||||||||
Other non-cash charges | 0.1 | (0.5) | ||||||||||||||||||||||||
Stock-based compensation | 0.6 | 1.6 | ||||||||||||||||||||||||
Restructuring expense | 16.7 | 4.6 | ||||||||||||||||||||||||
Restructuring cost of sales | — | 2.9 | ||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Interest income | 1.1 | 0.8 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | (11.7) | (4.5) | % | $ | (15.4) | (4.8) | % |
For the 13 Weeks Ended June 29, 2024 | ||||||||||||||
($ in millions, except per share data): | As Reported | Other Long-Lived Asset Impairment | Restructuring Expenses | As Adjusted | ||||||||||
Operating income (loss) | $ | (34.0) | $ | 0.6 | $ | 16.7 | $ | (16.7) | ||||||
Operating margin (% of net sales) | (13.1) | % | (6.4) | % | ||||||||||
Interest expense | $ | (4.1) | $ | — | $ | — | $ | (4.1) | ||||||
Other income (expense) - net | 1.5 | — | — | 1.5 | ||||||||||
Income (loss) before income taxes | (36.6) | 0.6 | 16.7 | (19.3) | ||||||||||
Provision (benefit) for income taxes | 2.2 | 0.1 | 3.5 | 5.8 | ||||||||||
Less: net income attributable to noncontrolling interest | 0.1 | — | — | 0.1 | ||||||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (38.8) | $ | 0.5 | $ | 13.2 | $ | (25.1) | ||||||
Diluted earnings (loss) per share | $ | (0.73) | $ | 0.01 | $ | 0.25 | $ | (0.47) |
For the 13 Weeks Ended July 1, 2023 | |||||||||||||||||
($ in millions, except per share data): | As Reported | Restructuring Cost of Sales | Other Long-Lived Asset Impairment | Restructuring Expenses | As Adjusted | ||||||||||||
Operating income (loss) | $ | (35.3) | $ | 2.9 | $ | 0.2 | $ | 4.6 | $ | (27.6) | |||||||
Operating margin (% of net sales) | (11.0) | % | (8.6) | % | |||||||||||||
Interest expense | $ | (5.3) | $ | — | $ | — | $ | — | $ | (5.3) | |||||||
Other income (expense) - net | 7.2 | — | — | — | 7.2 | ||||||||||||
Income (loss) before income taxes | (33.5) | 2.9 | 0.2 | 4.6 | (25.8) | ||||||||||||
Provision for income taxes | (7.2) | 0.6 | — | 1.0 | (5.6) | ||||||||||||
Less: Net income attributable to noncontrolling interest | (0.2) | — | — | — | (0.2) | ||||||||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (26.5) | $ | 2.3 | $ | 0.2 | $ | 3.6 | $ | (20.4) | |||||||
Diluted earnings (loss) per share | $ | (0.51) | $ | 0.04 | $ | — | $ | 0.07 | $ | (0.40) |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | Growth (Decline) | |||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Americas | $ | 229.6 | 44.6 | % | $ | 284.6 | 44.0 | % | $ | (55.0) | (19.3) | % | (19.6) | % | |||||||||||||||||||||||||||
Europe | 153.6 | 29.8 | 194.0 | 30.0 | (40.4) | (20.8) | (21.1) | ||||||||||||||||||||||||||||||||||
Asia | 130.7 | 25.4 | 164.2 | 25.4 | (33.5) | (20.4) | (18.0) | ||||||||||||||||||||||||||||||||||
Corporate | 1.0 | 0.2 | 4.2 | 0.6 | (3.2) | (76.2) | (77.2) | ||||||||||||||||||||||||||||||||||
Total | $ | 514.9 | 100.0 | % | $ | 647.0 | 100.0 | % | $ | (132.1) | (20.4) | % | (20.0) | % |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | Growth (Decline) | |||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||||||||||||||
Traditional watches | $ | 380.6 | 73.9 | % | $ | 461.5 | 71.3 | % | $ | (80.9) | (17.5) | % | (17.2) | % | |||||||||||||||||||||||||||
Smartwatches | 17.3 | 3.4 | 42.2 | 6.5 | (24.9) | (59.0) | (58.9) | ||||||||||||||||||||||||||||||||||
Total watches | $ | 397.9 | 77.3 | % | $ | 503.7 | 77.8 | % | $ | (105.8) | (21.0) | (20.7) | |||||||||||||||||||||||||||||
Leathers | 54.7 | 10.6 | 73.6 | 11.4 | (18.9) | (25.7) | (25.0) | ||||||||||||||||||||||||||||||||||
Jewelry | 50.5 | 9.8 | 56.4 | 8.7 | (5.9) | (10.5) | (9.4) | ||||||||||||||||||||||||||||||||||
Other | 11.8 | 2.3 | 13.3 | 2.1 | (1.5) | (11.3) | (11.3) | ||||||||||||||||||||||||||||||||||
Total | $ | 514.9 | 100.0 | % | $ | 647.0 | 100.0 | % | $ | (132.1) | (20.4) | % | (20.0) | % |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | Growth (Decline) | |||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||||||||||||||
Traditional watches | $ | 166.7 | 72.6 | % | $ | 200.2 | 70.4 | % | $ | (33.5) | (16.7) | % | (17.2) | % | |||||||||||||||||||||||||||
Smartwatches | 10.7 | 4.7 | 21.0 | 7.3 | (10.3) | (49.0) | (49.3) | ||||||||||||||||||||||||||||||||||
Total watches | $ | 177.4 | 77.3 | % | $ | 221.2 | 77.7 | % | $ | (43.8) | (19.8) | (20.2) | |||||||||||||||||||||||||||||
Leathers | 35.7 | 15.5 | 48.1 | 16.9 | (12.4) | (25.8) | (25.8) | ||||||||||||||||||||||||||||||||||
Jewelry | 12.1 | 5.3 | 11.6 | 4.1 | 0.5 | 4.3 | 4.3 | ||||||||||||||||||||||||||||||||||
Other | 4.4 | 1.9 | 3.7 | 1.3 | 0.7 | 18.9 | 18.4 | ||||||||||||||||||||||||||||||||||
Total | $ | 229.6 | 100.0 | % | $ | 284.6 | 100.0 | % | $ | (55.0) | (19.3) | % | (19.6) | % |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | Growth (Decline) | |||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||||||||||||||
Traditional watches | $ | 112.8 | 73.4 | % | $ | 131.2 | 67.7 | % | $ | (18.4) | (14.0) | % | (14.3) | % | |||||||||||||||||||||||||||
Smartwatches | 2.1 | 1.4 | 11.9 | 6.1 | (9.8) | (82.4) | (82.4) | ||||||||||||||||||||||||||||||||||
Total watches | $ | 114.9 | 74.8 | % | $ | 143.1 | 73.8 | % | $ | (28.2) | (19.7) | (20.0) | |||||||||||||||||||||||||||||
Leathers | 8.1 | 5.3 | 11.8 | 6.1 | (3.7) | (31.4) | (31.4) | ||||||||||||||||||||||||||||||||||
Jewelry | 25.7 | 16.7 | 33.9 | 17.5 | (8.2) | (24.2) | (24.5) | ||||||||||||||||||||||||||||||||||
Other | 4.9 | 3.2 | 5.2 | 2.6 | (0.3) | (5.8) | (5.9) | ||||||||||||||||||||||||||||||||||
Total | $ | 153.6 | 100.0 | % | $ | 194.0 | 100.0 | % | $ | (40.4) | (20.8) | % | (21.1) | % |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | Growth (Decline) | |||||||||||||||||||||||||||||||||||||||
Net Sales | Percentage of Total | Net Sales | Percentage of Total | Dollars | Percentage As Reported | Percentage Constant Currency | |||||||||||||||||||||||||||||||||||
Watches: | |||||||||||||||||||||||||||||||||||||||||
Traditional watches | $ | 101.2 | 77.4 | % | $ | 128.1 | 78.0 | % | $ | (26.9) | (21.0) | % | (19.0) | % | |||||||||||||||||||||||||||
Smartwatches | 4.5 | 3.5 | 9.4 | 5.7 | (4.9) | (52.1) | (51.1) | ||||||||||||||||||||||||||||||||||
Total watches | $ | 105.7 | 80.9 | % | $ | 137.5 | 83.7 | % | $ | (31.8) | (23.1) | (21.1) | |||||||||||||||||||||||||||||
Leathers | 10.9 | 8.3 | 13.8 | 8.4 | (2.9) | (21.0) | (17.4) | ||||||||||||||||||||||||||||||||||
Jewelry | 12.6 | 9.6 | 10.9 | 6.6 | 1.7 | 15.6 | 22.0 | ||||||||||||||||||||||||||||||||||
Other | 1.5 | 1.2 | 2.0 | 1.3 | (0.5) | (25.0) | (25.0) | ||||||||||||||||||||||||||||||||||
Total | $ | 130.7 | 100.0 | % | $ | 164.2 | 100.0 | % | $ | (33.5) | (20.4) | % | (18.0) | % |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | Change | Operating Margin % | ||||||||||||||||||||||||||||||||
Dollars | Percentage | 2024 | 2023 | ||||||||||||||||||||||||||||||||
Americas | $ | 23.4 | $ | 36.0 | $ | (12.6) | (35.0) | % | 10.1 | % | 12.6 | % | |||||||||||||||||||||||
Europe | 17.4 | 6.3 | 11.1 | 176.2 | 11.3 | 3.2 | |||||||||||||||||||||||||||||
Asia | 11.8 | 14.6 | (2.8) | (19.2) | 9.0 | 8.9 | |||||||||||||||||||||||||||||
Corporate | (115.8) | (129.5) | 13.7 | 10.6 | |||||||||||||||||||||||||||||||
Total operating income (loss) | $ | (63.2) | $ | (72.6) | $ | 9.4 | 12.9 | % | (12.3) | % | (11.2) | % |
For the 26 Weeks Ended June 29, 2024 | For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||||||||||
Dollars | % of Net Sales | Dollars | % of Net Sales | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (67.1) | (13.0)% | $ | (73.1) | (11.3) | % | |||||||||||||||||||
Plus: | ||||||||||||||||||||||||||
Interest expense | 9.2 | 10.4 | ||||||||||||||||||||||||
Amortization and depreciation | 8.4 | 9.9 | ||||||||||||||||||||||||
Other long-lived asset impairments | 1.0 | 0.2 | ||||||||||||||||||||||||
Other non-cash charges | 0.2 | (0.7) | ||||||||||||||||||||||||
Stock-based compensation | 1.6 | 3.0 | ||||||||||||||||||||||||
Restructuring expense | 26.7 | 11.7 | ||||||||||||||||||||||||
Restructuring cost of sales | (0.2) | 8.2 | ||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Interest income | 2.2 | 1.4 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | (22.4) | (4.4) | % | $ | (31.8) | (4.9) | % |
For the 26 Weeks Ended June 29, 2024 | |||||||||||||||||
($ in millions, except per share data): | As Reported | Restructuring Cost of Sales | Other Long-Lived Asset Impairment | Restructuring Expenses | As Adjusted | ||||||||||||
Operating income (loss) | $ | (63.2) | $ | (0.2) | $ | 1.0 | $ | 26.7 | $ | (35.7) | |||||||
Operating margin (% of net sales) | (12.3) | % | (6.9) | % | |||||||||||||
Interest expense | $ | (9.2) | $ | — | $ | — | $ | — | $ | (9.2) | |||||||
Other income (expense) - net | 5.3 | — | — | — | 5.3 | ||||||||||||
Income (loss) before income taxes | (67.1) | (0.2) | 1.0 | 26.7 | (39.6) | ||||||||||||
Provision for income taxes | (3.9) | — | 0.2 | 5.6 | 1.9 | ||||||||||||
Less: net income attributable to noncontrolling interest | 0.1 | — | — | — | 0.1 | ||||||||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (63.1) | $ | (0.2) | $ | 0.8 | $ | 21.1 | $ | (41.4) | |||||||
Diluted earnings (loss) per share | $ | (1.20) | $ | — | $ | 0.02 | $ | 0.40 | $ | (0.78) |
For the 26 Weeks Ended July 1, 2023 | |||||||||||||||||
($ in millions, except per share data): | As Reported | Restructuring Cost of Sales | Other Long-Lived Asset Impairment | Restructuring Expenses | As Adjusted | ||||||||||||
Operating income (loss) | $ | (72.6) | $ | 8.2 | $ | 0.2 | $ | 11.7 | $ | (52.5) | |||||||
Operating margin (% of net sales) | (11.2) | % | (8.1) | % | |||||||||||||
Interest expense | $ | (10.4) | $ | — | $ | — | $ | — | $ | (10.4) | |||||||
Other income (expense) - net | 9.9 | — | — | — | 9.9 | ||||||||||||
Income (loss) before income taxes | (73.1) | 8.2 | 0.2 | 11.7 | (53.0) | ||||||||||||
Provision for income taxes | (5.6) | 1.7 | — | 2.5 | (1.4) | ||||||||||||
Less: Net income attributable to noncontrolling interest | (0.3) | — | — | — | (0.3) | ||||||||||||
Net income (loss) attributable to Fossil Group, Inc. | $ | (67.8) | $ | 6.5 | $ | 0.2 | $ | 9.2 | $ | (51.9) | |||||||
Diluted earnings (loss) per share | $ | (1.30) | $ | 0.12 | $ | — | $ | 0.18 | $ | (1.00) |
June 29, 2024 | July 1, 2023 | ||||||||||||||||
Cash and cash equivalents | $ | 104.9 | $ | 132.1 | |||||||||||||
Revolver availability | 50.8 | 45.5 | 1 | ||||||||||||||
Total liquidity | $ | 155.7 | $ | 177.6 |
Exhibit Number | Document Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
10.1 | ||||||||
10.2(1)(3) | ||||||||
31.1(1) | ||||||||
31.2(1) | ||||||||
32.1(2) | ||||||||
32.2(2) | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
FOSSIL GROUP, INC. | |||||
August 8, 2024 | /S/ JEFFREY N. BOYER | ||||
Jeffrey N. Boyer | |||||
Interim Chief Executive Officer (Principal financial and accounting officer duly authorized to sign on behalf of the Registrant) |
August 8, 2024 | /s/ JEFFREY N. BOYER | ||||
Jeffrey N. Boyer | |||||
Interim Chief Executive Officer |
August 8, 2024 | /S/ JEFFREY N. BOYER | ||||
Jeffrey N. Boyer | |||||
Interim Chief Executive Officer |
Dated: August 8, 2024 | By: | /s/ JEFFREY N. BOYER | ||||||
Name: | Jeffrey N. Boyer | |||||||
Title: | Interim Chief Executive Officer |
Dated: August 8, 2024 | By: | /S/ JEFFREY N. BOYER | ||||||
Name: | Jeffrey N. Boyer | |||||||
Title: | Interim Chief Executive Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED (Parenthetical) - USD ($) $ in Thousands |
Jun. 29, 2024 |
Dec. 30, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 15,241 | $ 12,616 |
Property, plant and equipment, accumulated depreciation | $ 368,016 | $ 384,688 |
Common stock, shares issued (in shares) | 53,099,052 | 52,487,020 |
Common stock, shares outstanding (in shares) | 53,099,052 | 52,487,020 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) UNAUDITED - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Income Statement [Abstract] | ||||
Net sales | $ 259,991 | $ 321,966 | $ 514,874 | $ 647,002 |
Cost of sales | 123,140 | 165,299 | 244,531 | 329,618 |
Gross profit | 136,851 | 156,667 | 270,343 | 317,384 |
Operating expenses: | ||||
Selling, general and administrative expenses | 153,604 | 187,187 | 305,876 | 378,060 |
Other long-lived asset impairments | 577 | 161 | 950 | 216 |
Restructuring expenses | 16,673 | 4,632 | 26,726 | 11,729 |
Total operating expenses | 170,854 | 191,980 | 333,552 | 390,005 |
Operating income (loss) | (34,003) | (35,313) | (63,209) | (72,621) |
Interest expense | 4,082 | 5,345 | 9,194 | 10,350 |
Other income (expense) - net | 1,450 | 7,172 | 5,338 | 9,906 |
Income (loss) before income taxes | (36,635) | (33,486) | (67,065) | (73,065) |
Provision (benefit) for income taxes | 2,208 | (7,198) | (3,908) | (5,595) |
Net income (loss) | (38,843) | (26,288) | (63,157) | (67,470) |
Less: Net income (loss) attributable to noncontrolling interests | (58) | 241 | (76) | 321 |
Net income (loss) attributable to Fossil Group, Inc. | (38,785) | (26,529) | (63,081) | (67,791) |
Other comprehensive income (loss), net of taxes: | ||||
Currency translation adjustment | (1,631) | (4,090) | (4,117) | 1,807 |
Cash flow hedges - net change | 107 | (191) | 753 | (2,977) |
Pension plan activity | 0 | 0 | (19) | 0 |
Total other comprehensive income (loss) | (1,524) | (4,281) | (3,383) | (1,170) |
Total comprehensive income (loss) | (40,367) | (30,569) | (66,540) | (68,640) |
Less: Comprehensive income (loss) attributable to noncontrolling interests | (58) | 241 | (76) | 321 |
Comprehensive income (loss) attributable to Fossil Group, Inc. | $ (40,309) | $ (30,810) | $ (66,464) | $ (68,961) |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ (0.73) | $ (0.51) | $ (1.20) | $ (1.30) |
Diluted (in dollars per share) | $ (0.73) | $ (0.51) | $ (1.20) | $ (1.30) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 52,927 | 52,349 | 52,709 | 52,095 |
Diluted (in shares) | 52,927 | 52,349 | 52,709 | 52,095 |
FINANCIAL STATEMENT POLICIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL STATEMENT POLICIES | FINANCIAL STATEMENT POLICIES Basis of Presentation. The condensed consolidated financial statements include the accounts of Fossil Group, Inc., a Delaware corporation, and its wholly and majority-owned subsidiaries (the “Company”). The information presented herein includes the thirteen-week period ended June 29, 2024 (“Second Quarter”) as compared to the thirteen-week period ended July 1, 2023 (“Prior Year Quarter”), and the twenty-six week period ended June 29, 2024 ("Year To Date Period") as compared to the twenty-six week period ended July 1, 2023 ("Prior Year YTD Period"). The condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s financial position as of June 29, 2024, and the results of operations for the Second Quarter, Prior Year Quarter, Year To Date Period and Prior Year YTD Period. All adjustments are of a normal, recurring nature. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K filed by the Company pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the fiscal year ended December 30, 2023, as amended (the “2023 Form 10-K”). Operating results for the Second Quarter are not necessarily indicative of the results to be achieved for the full fiscal year. Effective during the third quarter of fiscal year 2023, the Company made a change to the presentation of its available borrowing capacity under its Revolving Facility (as defined in Note 15 - Debt Activity) to exclude available borrowings that would trigger a contingent covenant. The Company's historical disclosures have been recast to be consistent with its current presentation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods reported. We base our estimates on the information available at the time and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. The Company has not made any changes in its significant accounting policies from those disclosed in the 2023 Form 10-K. Business. The Company is a global design, marketing and distribution company that specializes in consumer fashion accessories. Its principal offerings include an extensive line of men's and women's fashion watches and jewelry, handbags, small leather goods, belts and sunglasses. In the watch and jewelry product categories, the Company has a diverse portfolio of globally recognized owned and licensed brand names under which its products are marketed. The Company's products are distributed globally through various distribution channels, including wholesale in countries where it has a physical presence, direct to the consumer through its retail stores and commercial websites and through third-party distributors in countries where the Company does not maintain a physical presence. The Company's products are offered at varying price points to meet the needs of its customers, whether they are value-conscious or luxury oriented. Based on its extensive range of accessory products, brands, distribution channels and price points, the Company is able to target style-conscious consumers across a wide age spectrum on a global basis. Operating Expenses. Operating expenses include selling, general and administrative ("SG&A"), other long-lived asset impairments and restructuring charges. SG&A expenses include selling and distribution expenses primarily consisting of sales and distribution labor costs, sales distribution center and warehouse facility costs, depreciation expense related to sales distribution and warehouse facilities, the four-wall operating costs of the Company's retail stores, point-of-sale expenses, advertising expenses and art, and design and product development labor costs. SG&A also includes general and administrative expenses primarily consisting of administrative support labor and support costs such as treasury, legal, information services, accounting, internal audit, human resources, executive management costs and costs associated with stock-based compensation. Restructuring charges include costs to reduce and optimize the Company’s infrastructure and store closures. See Note 16— Restructuring for additional information on the Company’s restructuring plan. Earnings (Loss) Per Share (“EPS”). Basic EPS is based on the weighted average number of common shares outstanding during each period. Diluted EPS adjusts basic EPS for the effects of dilutive common stock equivalents outstanding during each period using the treasury stock method. The following table reconciles the numerators and denominators used in the computations of both basic and diluted EPS (in thousands, except per share data):
At the end of the Second Quarter and Year To Date Period, approximately 1.6 million and 1.7 million weighted average shares issuable under stock-based awards, respectively, were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 0.2 million and 0.2 million weighted average performance-based shares at the end of the Second Quarter and Year To Date Period, respectively. At the end of the Prior Year Quarter and Prior Year YTD Period, approximately 2.2 million and 2.1 million weighted average shares issuable under stock-based awards, respectively, were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 0.4 million and 0.3 million weighted average performance-based shares at the end of the Prior Year Quarter and Prior Year YTD Period, respectively. Cash, Cash Equivalents and Restricted Cash. Restricted cash included in intangible and other-assets net was comprised primarily of pledged collateral to secure bank guarantees for the purpose of obtaining retail space. The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of June 29, 2024 and July 1, 2023 that are presented in the condensed consolidated statement of cash flows (in thousands):
Recently Issued and Adopted Accounting Standards In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU"), 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its financial statement disclosures. In November 2023, FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The amendments in this update will require public entities to disclose significant segment expenses that are regularly provided to the Company's chief operating decision maker and included within segment profit and loss, an amount and description of its composition for other segment items, and expanded interim disclosures. This guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its financial statement disclosures. In October 2023, FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06"). The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of topics in the FASB Accounting Standards Codification (the "Codification"), with the intention of clarifying or improving them and to align the requirements in the Codification with the regulations of the U.S. Securities and Exchange Commission (the "SEC"). The effective date for ASU 2023-06 varies and is determined for each individual disclosure based on the effective date of the SEC's removal of the related disclosure. ASU 2023-06 will not have an impact on the Company's financial position or results of operations. The Organization for Economic Cooperation and Development ("OECD") and over 140 countries have agreed to enact a two-pillar solution to reform the international tax rules to address the challenges arising from the globalization and digitalization of the economy. "The Pillar Two Global Anti-Base Erosion (GloBE) Rules" provide a coordinated system to ensure that multinational enterprises with revenues above 750 million euro pay a minimum effective tax rate of 15% tax on the income arising in each of the jurisdictions in which they operate. Many aspects of Pillar Two will be effective for tax years beginning in January 2024, with certain remaining impacts to be effective in 2025. Each country must enact its own legislation to apply the Pillar Two rules. The Company does not expect Pillar Two to have a material impact on its financial results, including its annual estimated effective tax rate or liquidity for 2024, but will continue to monitor future developments.
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Disaggregation of Revenue. The Company's revenue disaggregated by major product category and timing of revenue recognition was as follows (in thousands):
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INVENTORIES |
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INVENTORIES | INVENTORIES Inventories consisted of the following (in thousands):
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WARRANTY LIABILITIES |
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WARRANTY LIABILITIES | WARRANTY LIABILITIES The Company’s warranty liability is recorded in accrued expenses-other in the Company’s condensed consolidated balance sheets. Warranty liability activity consisted of the following (in thousands):
_______________________________________________ (1) Changes in cost estimates related to preexisting warranties are aggregated with accruals for new standard warranties issued and foreign currency changes.
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INCOME TAXES |
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INCOME TAXES | INCOME TAXES The Company’s income tax (benefit) expense and related effective rates were as follows (in thousands, except percentage data):
The effective tax rate in the Second Quarter differed from the Prior Year Quarter primarily due to a change in the Company’s global mix of earnings. In addition, income taxes were accrued on certain income in foreign jurisdictions and no tax benefit has been accrued on the U.S. tax losses and on certain losses in other foreign jurisdictions due to valuation allowances previously recorded. The effective tax rate can also vary from quarter-to-quarter due to changes in the resolution of income tax audits, changes in uncertain tax positions, and changes in tax law. As of June 29, 2024, the Company's total amount of unrecognized tax benefits, excluding interest and penalties, was $17.5 million, of which $17.5 million would favorably impact the effective tax rate in future periods, if recognized. The Company filed amended U.S. income tax returns for 2014-2017 under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) which included a provision for the carryback of U.S. NOLs. The IRS reviewed the Company’s 2019 and 2020 U.S. tax returns and resulting net operating losses, as well as, the tax returns for 2014-2017; which are the carryback years. The Company has received the income tax refund for the 2019 U.S. tax NOL carryback. On March 27, 2024, The Company was informed that its 2019, 2020, and NOL carryback claims were approved by the IRS and Joint Committee on Taxation. The Company received a $57.3 million refund in April 2024. The Company released corresponding uncertain tax positions of $8.8 million in the first quarter of 2024. It is reasonably expected that certain uncertain tax positions will be resolved within the next 12 month period, and if resolved favorably, it would impact the tax rate by a benefit of approximately $14.5 million (including interest), of which $0.9 million was recognized in the second quarter. The Company is also subject to examinations in various state and foreign jurisdictions for its 2013-2023 tax years, none of which the Company believes are significant, individually or in the aggregate. Tax audit outcomes and timing of tax audit settlements are subject to significant uncertainty. The Company has classified uncertain tax positions as long-term income taxes payable, unless such amounts are expected to be settled within twelve months of the condensed consolidated balance sheet date. As of June 29, 2024, the Company has not recorded any new unrecognized tax benefits, excluding interest and penalties, for positions that are expected to be settled within the next twelve months. Consistent with its past practice, the Company recognizes interest and/or penalties related to income tax overpayments and income tax underpayments in income tax expense and income taxes receivable/payable. At June 29, 2024, the total amount of accrued income tax-related interest expense, net included in the condensed consolidated balance sheets was $2.0 million, consisting of $6.6 million of accrued interest expense and $4.6 million of accrued interest income. There were no accrued tax-related penalties.
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STOCKHOLDERS' EQUITY |
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Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Common and Preferred Stock. The Company has 100,000,000 shares of common stock, par value $0.01 per share, authorized, with 53,099,052 and 52,487,020 shares issued and outstanding at June 29, 2024 and December 30, 2023, respectively. The Company has 1,000,000 shares of preferred stock, par value $0.01 per share, authorized, with none issued or outstanding at June 29, 2024 or December 30, 2023. Rights, preferences and other terms of preferred stock will be determined by the Board of Directors at the time of issuance. Common Stock Repurchase Programs. Purchases of the Company’s common stock are made from time to time pursuant to its repurchase programs, subject to market conditions and at prevailing market prices, through the open market. Repurchased shares of common stock are recorded at cost and become authorized but unissued shares which may be issued in the future for general corporate or other purposes. The Company may terminate or limit its stock repurchase program at any time. In the event the repurchased shares are cancelled, the Company accounts for retirements by allocating the repurchase price to common stock, additional paid-in capital and retained (deficit) earnings. The repurchase price allocation is based upon the equity contribution associated with historical issuances. The repurchase programs are conducted pursuant to Rule 10b-18 of the Exchange Act. At June 29, 2024 and December 30, 2023, all treasury stock had been effectively retired. As of June 29, 2024, the Company had $20.0 million of repurchase authorizations remaining under its repurchase program. The Company did not repurchase any common stock under its authorized stock repurchase plans during the Second Quarter, Prior Year Quarter, Year To Date Period or Prior Year YTD Period.
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EMPLOYEE BENEFIT PLANS |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Stock-Based Compensation Plans. There was no activity related to stock appreciation rights during the Second Quarter, and there were no stock appreciation rights outstanding as of June 29, 2024 Restricted Stock Units and Performance Restricted Stock Units. The following table summarizes restricted stock unit and performance restricted stock unit activity during the Second Quarter:
The total fair value of restricted stock units vested was $0.8 million during the Second Quarter. Vesting of performance restricted stock units is based on achievement of adjusted operating margin targets. Long-Term Incentive Plans. On the date of the Company’s annual stockholders meeting, each non-employee director shall be eligible to receive a grant of restricted stock units in an amount determined by the board of directors but not to exceed more than the number of shares having a fair market value of $130,000. These shares vest 100% on the earlier of one year from the date of grant or the date of the Company's next annual stockholders meeting, provided such director is providing services to the Company or a subsidiary of the Company on that date. Beginning with the grant in fiscal year 2021, non-employee directors may elect to defer receipt of all or a portion of the restricted stock units settled in common stock of the Company upon the vesting date. In addition, beginning in fiscal year 2021, non-employee directors may defer the cash portion of their annual fees. Each participant may also elect to have the cash portion of his or her annual fees for each calendar year treated as if invested in units of common stock of the Company.
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables disclose changes in the balances of each component of accumulated other comprehensive income (loss), net of taxes (in thousands):
See Note—10 Derivatives and Risk Management for additional disclosures about the Company’s use of derivatives.
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SEGMENT INFORMATION |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Company reports segment information based on the “management approach.” The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. The Company manages its business primarily on a geographic basis. The Company’s reportable operating segments are comprised of (i) Americas, (ii) Europe and (iii) Asia. Each reportable operating segment includes sales to wholesale and distributor customers, and sales through Company-owned retail stores and e-commerce activities based on the location of the selling entity. The Americas segment primarily includes sales to customers based in Canada, Latin America and the United States. The Europe segment primarily includes sales to customers based in European countries, the Middle East and Africa. The Asia segment primarily includes sales to customers based in Australia, greater China (including mainland China, Hong Kong, Macau and Taiwan), India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea and Thailand. Each reportable operating segment provides similar products and services. The Company evaluates the performance of its reportable segments based on net sales and operating income (loss). Net sales for geographic segments are based on the location of the selling entity. Operating income (loss) for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributable to the segment. Corporate includes peripheral revenue generating activities from factories and intellectual property and general corporate expenses, including certain administrative, legal, accounting, technology support costs, equity compensation costs, payroll costs attributable to executive management, brand management, product development, art, creative/product design, marketing, strategy, compliance and back office supply chain expenses that are not allocated to the various segments because they are managed at the corporate level internally. The Company does not include intercompany transfers between segments for management reporting purposes. Summary information by operating segment was as follows (in thousands):
The following table reflects net sales for each class of similar products in the periods presented (in thousands, except percentage data):
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DERIVATIVES AND RISK MANAGEMENT |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES AND RISK MANAGEMENT | DERIVATIVES AND RISK MANAGEMENT Cash Flow Hedges. The primary risks managed by using derivative instruments are the fluctuations in global currencies that will ultimately be used by non-U.S. dollar functional currency subsidiaries to settle future payments of intercompany inventory transactions denominated in U.S. dollars. Specifically, the Company projects future intercompany purchases by its non-U.S. dollar functional currency subsidiaries generally over a period of up to 24 months. The Company enters into forward contracts, generally for up to 85% of the forecasted purchases, to manage fluctuations in global currencies that will ultimately be used to settle such U.S. dollar denominated inventory purchases. Additionally, the Company enters into forward contracts to manage fluctuations in Japanese yen exchange rates that will be used to settle future third-party inventory component purchases by a U.S. dollar functional currency subsidiary. Forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon settlement date and exchange rate. These forward contracts are designated as single cash flow hedges. Fluctuations in exchange rates will either increase or decrease the Company’s U.S. dollar equivalent cash flows from these inventory transactions, which will affect the Company’s U.S. dollar earnings. Gains or losses on the forward contracts are expected to offset these fluctuations to the extent the cash flows are hedged by the forward contracts. For a derivative instrument that is designated and qualifies as a cash flow hedge, the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (loss), net of taxes and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As of June 29, 2024, the Company had the following outstanding forward contracts designated as cash flow hedges that were entered into to hedge future payments of inventory transactions (in millions):
Non-designated Hedges. The Company also periodically enters into forward contracts to manage exchange rate risks associated with certain intercompany transactions and for which the Company does not elect hedge accounting treatment. As of June 29, 2024, the Company had non-designated forward contracts of $0.9 million on 16.6 million rand associated with a South African rand-denominated foreign subsidiary. Changes in the fair value of derivatives not designated as hedging instruments are recognized in earnings when they occur. The gains and losses on cash flow hedges that were recognized in other comprehensive income (loss), net of taxes are set forth below (in thousands):
The following tables disclose the gains and losses on derivative instruments recorded in accumulated other comprehensive income (loss), net of taxes during the term of the hedging relationship and reclassified into earnings, and gains and losses on derivatives not designated as hedging instruments recorded directly to earnings (in thousands):
The following table discloses the fair value amounts for the Company’s derivative instruments as separate asset and liability values, presents the fair value of derivative instruments on a gross basis, and identifies the line items in the condensed consolidated balance sheets in which the fair value amounts for these categories of derivative instruments are included (in thousands):
The following tables summarize the effects of the Company's derivative instruments on earnings (in thousands):
At the end of the Second Quarter, the Company had forward contracts designated as cash flow hedges with maturities extending through March 2025. As of June 29, 2024, a $1.1 million gain is expected to be reclassified into earnings within the next twelve months at prevailing foreign currency exchange rates.
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement and Disclosures (“ASC 820”), establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: •Level 1 — Quoted prices in active markets for identical assets or liabilities. •Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. •Level 3 — Unobservable inputs based on the Company’s assumptions. ASC 820 requires the use of observable market data if such data is available without undue cost and effort. The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June 29, 2024 (in thousands):
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 30, 2023 (in thousands):
The fair values of the Company’s forward contracts are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates. See Note 10—Derivatives and Risk Management, for additional disclosures about the forward contracts. As of June 29, 2024, the Company's Notes (as defined in Note 15— Debt Activity), excluding unamortized debt issuance costs, were recorded at cost and had a carrying value of $150.0 million and had a fair value of approximately $75.0 million. The fair value of the Company's Notes was based on Level 1 inputs. The Company's Revolving Facility (as defined in Note 15—Debt Activity) was recorded at cost and had a carrying value of $10.7 million and a fair value of approximately $8.1 million. The fair value of the Company's Revolving Facility was based on Level 2 inputs. During the Year to Date Period, operating lease right-of-use ("ROU") assets with a carrying amount of $2.5 million and property, plant and equipment-net with a carrying value of $0.3 million were written down to a fair value of $1.7 million and $0.1 million, respectively, resulting in impairment charges of $1.0 million. During the Prior Year YTD Period, ROU assets with a carrying amount of $0.8 million were written down to a fair value of $0.6 million, resulting in impairment charges of $0.2 million. The fair values of operating lease ROU assets and fixed assets related to retail stores were determined using Level 3 inputs, including forecasted cash flows and discount rates. Of the $1.0 million impairment expense in the Year to Date Period, $0.8 million and $0.2 million was recorded in other long-lived asset impairments in the Asia and Europe segments, respectively. Of the $0.2 million impairment expense in the Prior Year YTD Period, $0.1 million was recorded in other long-lived asset impairments in both the Americas and Europe segments.
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INTANGIBLE AND OTHER ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE AND OTHER ASSETS | INTANGIBLE AND OTHER ASSETS The following table summarizes intangible and other assets (in thousands):
Amortization expense for intangible assets was $0.2 million and $0.2 million for the Second Quarter and the Prior Year Quarter, respectively, and $0.5 million and $0.5 million for the Year To Date Period and Prior Year YTD Period, respectively. Estimated aggregate future amortization expense by fiscal year for intangible assets is as follows (in thousands):
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COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
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Jun. 29, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESLitigation. The Company is occasionally subject to litigation or other legal proceedings in the normal course of its business. The Company does not believe that the outcome of any currently pending legal matters, individually or collectively, will have a material effect on the business or financial condition of the Company. |
LEASES |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company's leases consist primarily of retail space, offices, warehouses, distribution centers, equipment and vehicles. The Company determines if an agreement contains a lease at inception based on the Company's right to the economic benefits of the leased assets and its right to direct the use of the leased asset. ROU assets represent the Company's right to use an underlying asset, and ROU liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at the commencement date adjusted for the lease term and lease country to determine the present value of the lease payments. Some leases include one or more options to renew at the Company's discretion, with renewal terms that can extend the lease from approximately to additional years. The renewal options are not included in the measurement of ROU assets and ROU liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Short-term leases are leases having a term of twelve months or less at inception. The Company does not record a related lease asset or liability for short-term leases. The Company has certain leases containing lease and non-lease components which are accounted for as a single lease component. The Company has certain lease agreements where lease payments are based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The variable portion of these lease payments is not included in the Company's lease liabilities. The Company's lease agreements do not contain any significant restrictions or covenants other than those that are customary in such arrangements. The components of lease expense were as follows (in thousands):
_______________________________________________ (1) Includes sublease income, which was immaterial. The following table discloses supplemental balance sheet information for the Company’s leases (in thousands):
The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases:
Future minimum lease payments by year as of June 29, 2024 were as follows (in thousands):
Supplemental cash flow information related to leases was as follows (in thousands):
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LEASES | LEASES The Company's leases consist primarily of retail space, offices, warehouses, distribution centers, equipment and vehicles. The Company determines if an agreement contains a lease at inception based on the Company's right to the economic benefits of the leased assets and its right to direct the use of the leased asset. ROU assets represent the Company's right to use an underlying asset, and ROU liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at the commencement date adjusted for the lease term and lease country to determine the present value of the lease payments. Some leases include one or more options to renew at the Company's discretion, with renewal terms that can extend the lease from approximately to additional years. The renewal options are not included in the measurement of ROU assets and ROU liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Short-term leases are leases having a term of twelve months or less at inception. The Company does not record a related lease asset or liability for short-term leases. The Company has certain leases containing lease and non-lease components which are accounted for as a single lease component. The Company has certain lease agreements where lease payments are based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. The variable portion of these lease payments is not included in the Company's lease liabilities. The Company's lease agreements do not contain any significant restrictions or covenants other than those that are customary in such arrangements. The components of lease expense were as follows (in thousands):
_______________________________________________ (1) Includes sublease income, which was immaterial. The following table discloses supplemental balance sheet information for the Company’s leases (in thousands):
The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases:
Future minimum lease payments by year as of June 29, 2024 were as follows (in thousands):
Supplemental cash flow information related to leases was as follows (in thousands):
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DEBT ACTIVITY |
6 Months Ended |
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Jun. 29, 2024 | |
Debt Disclosure [Abstract] | |
DEBT ACTIVITY | DEBT ACTIVITY On September 26, 2019, the Company and Fossil Partners L.P., as the U.S. borrowers, and Fossil Group Europe GmbH, Fossil Asia Pacific Limited, Fossil (Europe) GmbH, Fossil (UK) Limited and Fossil Canada Inc., as the non-U.S. borrowers, certain other subsidiaries of the Company from time to time party thereto designated as borrowers, and certain subsidiaries of the Company from time to time party thereto as guarantors, entered into a $275.0 million secured asset-based revolving credit agreement (the “Revolving Facility”) with JPMorgan Chase Bank, N.A. as administrative agent (the "ABL Agent"), J.P. Morgan AG, as French collateral agent, JPMorgan Chase Bank, N.A., Citizens Bank, N.A. and Wells Fargo Bank, National Association as joint bookrunners and joint lead arrangers, and Citizens Bank, N.A. and Wells Fargo Bank, National Association, as co-syndication agents and each of the lenders from time to time party thereto (the "ABL Lenders"). On November 8, 2022, the Company entered into Amendment No. 4 (the "Amendment") to the Revolving Facility. The Amendment, among other things, (i) extended the maturity date of the credit facility to November 8, 2027 (provided, that if the Company has any indebtedness in an amount in excess of $35 million that matures prior to November 8, 2027, the maturity date of the credit facility shall be the 91st day prior to the maturity date of such other indebtedness) and (ii) changed the calculation methodology of the borrowing base to include the value of certain of the Company’s intellectual property in such methodology and to provide for seasonal increases to certain advance rates. In November 2021, the Company sold $150.0 million aggregate principal amount of 7.00% senior notes due 2026 (the “Notes”), generating net proceeds of approximately $141.7 million. The Notes were issued pursuant to an indenture (the "Base Indenture") and a first supplemental indenture (the "First Supplemental Indenture" and, together with the Base Indenture, the "Indenture") with The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). The Notes are general unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness, and will rank senior in right of payment to the Company’s future subordinated indebtedness, if any. The Notes are effectively subordinated to all of the Company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, and the Notes are structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries (excluding any amounts owed by such subsidiaries to the Company). The Notes bear interest at the rate of 7.00% per annum. Interest on the Notes is payable quarterly in arrears on February 28, May 31, August 31 and November 30 of each year. The Notes mature on November 30, 2026. The Company may redeem the Notes for cash in whole or in part at any time at its option. On and after November 30, 2023, the Company may redeem the Notes at the following prices: (i) on or after November 30, 2023 and prior to November 30, 2024, at a price equal to $25.50 per $25.00 principal amount of Notes, (ii) on or after November 30, 2024 and prior to November 30, 2025, at a price equal to $25.25 per $25.00 principal amount of Notes and (iii) on or after November 30, 2025, at a price equal to $25.00 per $25.00 principal amount of Notes, plus (in each case noted above) accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Indenture contains customary events of default and cure provisions. If an event of default (other than an event of default of the type described in the following sentence) occurs and is continuing with respect to the Notes, the Trustee may, and at the direction of the registered holders of at least 25% in aggregate principal amount of the outstanding debt securities of the Notes shall, declare the principal amount plus accrued and unpaid interest, premium and additional amounts, if any, on the Notes to be due and payable immediately. If an event of default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal amount plus accrued and unpaid interest, and premium, if any, on the Notes will become immediately due and payable without any action on the part of the Trustee or any holder of the Notes. The Revolving Facility provides that the ABL Lenders may extend revolving loans in an aggregate principal amount not to exceed $225.0 million at any time outstanding (the “Revolving Credit Commitment”), of which up to $125.0 million is available under a U.S. facility, an aggregate of $80.0 million is available under a European facility, $10.0 million is available under a Hong Kong facility, $5.0 million is available under a French facility, and $5.0 million is available under a Canadian facility, in each case, subject to the borrowing base availability limitations described below. The Revolving Facility also includes an up to $45.0 million subfacility for the issuance of letters of credit (the “Letters of Credit”). The French facility includes a $1.0 million subfacility for swingline loans, and the European facility includes a $7.0 million subfacility for swingline loans. The Revolving Facility is subject to a line cap equal to the lesser of the total Revolving Credit Commitment and the aggregate borrowing bases under the U.S. facility, the European facility, the Hong Kong facility, the French facility and the Canadian facility. Loans under the Revolving Facility may be made in U.S. dollars, Canadian dollars, euros, Hong Kong dollars or pounds sterling. The Revolving Facility is an asset-based facility, in which borrowing availability is subject to a borrowing base equal to:(a) with respect to the Company, the sum of (i) the lesser of (x) 90% of the appraised net orderly liquidation value of eligible U.S. finished goods inventory and (y) 65% of the lower of cost or market value of eligible U.S. finished goods inventory, plus (ii) 85% of the eligible U.S. accounts receivable, plus (iii) 90% of eligible U.S. credit card accounts receivable, plus (iv) the lesser of (x) 40% of the appraised net orderly liquidation value of eligible U.S. intellectual property and (y) $20.0 million, minus (v) the aggregate amount of reserves, if any, established by the ABL Agent; (b) with respect to each non-U.S. borrower (except for the French Borrower), the sum of (i) the lesser of (x) 90% of the appraised net orderly liquidation value of eligible foreign finished goods inventory of such non-U.S. borrower and (y) 65% of the lower of cost or market value of eligible foreign finished goods inventory of such non-U.S. borrower, plus (ii) 85% of the eligible foreign accounts receivable of such non-U.S. borrower, minus (iii) the aggregate amount of reserves, if any, established by the ABL Agent; and (c) with respect to the French Borrower, (i) 85% of eligible French accounts receivable minus (ii) the aggregate amount of reserves, if any, established by the ABL Agent. Not more than 60% of the aggregate borrowing base under the Revolving Facility may consist of the non-U.S. borrowing bases. The above advance rates (other than the advance rates with respect to intellectual property) are seasonally increased by 5% (e.g. from 90% to 95%) during the period commencing on the date of delivery of the borrowing base certificate with respect to the second fiscal month of the Company and ending on the last day of the period covered by the borrowing base certificate delivered with respect to the fifth fiscal month of the Company. The Revolving Facility also includes a commitment fee, payable quarterly in arrears, of 0.250% or 0.375% determined by reference to the average daily unused portion of the overall commitment under the Revolving Facility. The ABL Borrowers will pay the ABL Agent, on the account of the issuing ABL Lenders, an issuance fee of 0.125% for any issued Letters of Credit. The ABL Borrowers have the right to request an increase to the commitments under the Revolving Facility or any subfacility in an aggregate principal amount not to exceed $75.0 million in increments no less than $10.0 million, subject to certain terms and conditions as defined in the Revolving Facility. The Revolving Facility is secured by guarantees by the Company and certain of its domestic subsidiaries. Additionally, the Company and such subsidiaries have granted liens on all or substantially all of their assets in order to secure the obligations under the Revolving Facility. In addition, the Swiss Borrower, the Hong Kong Borrower, the French Borrower, the German Borrower and the Canadian Borrower, and the other non-U.S. borrowers from time to time party to the Revolving Facility are required to enter into security instruments with respect to all or substantially all of their assets that can be pledged under applicable local law, and certain of their respective subsidiaries may guarantee the respective non-U.S. obligations under the Revolving Facility. The Revolving Facility contains customary affirmative and negative covenants and events of default, such as compliance with annual audited and quarterly unaudited financial statements disclosures. Upon an event of default, the ABL Agent will have the right to declare the revolving loans and other obligations outstanding immediately due and payable and all commitments immediately terminated or reduced, subject to cure periods and grace periods set forth in the Revolving Facility. As of June 29, 2024, the Company had $150.0 million and $10.7 million outstanding under the Notes and Revolving Facility, respectively. The Company had net payments of $46.8 million and $51.3 million under the Revolving Facility during the Second Quarter and Year To Date Period, respectively. Amounts available under the Revolving Facility were reduced by any amounts outstanding under standby Letters of Credit. As of June 29, 2024, the Company had available borrowing capacity of $50.8 million under the Revolving Facility. As of June 29, 2024, the Company had unamortized debt issuance costs of $4.2 million recorded in long-term debt and $2.2 million recorded in intangible and other assets-net on the Company's consolidated balance sheets. The Company incurred $2.6 million and $5.2 million of interest expense related to the Notes during the Second Quarter and Year To Date Period, respectively. The Company incurred $0.3 million and $1.3 million of interest expense related to the Revolving Facility during the Second Quarter and Year To Date Period, respectively. The Company incurred $0.6 million and $1.2 million of interest expense related to the amortization of debt issuance costs during the Second Quarter and Year To Date Period, respectively. At June 29, 2024, the Company was in compliance with all debt covenants related to its credit facilities.
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RESTRUCTURING |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING | RESTRUCTURING In fiscal year 2023, the Company announced its Transform and Grow strategy ("TAG") designed to reduce operating costs, improve operating margins, and advance the Company’s commitment to profitable growth. The Company expanded the scope and duration of TAG to focus on a more comprehensive review of its global business operations. The expansion of TAG will put greater emphasis on initiatives to exit or minimize certain product offerings, brands and distribution, and to strengthen gross margin and increase the level of operating expense efficiencies. TAG is estimated to generate approximately $300 million of annualized operating benefits by the end of 2025. The Company estimates approximately $100 million to $120 million in total charges over the duration of TAG, with approximately $40 million in fiscal year 2024. Aided by these measures, the Company's long-term goal is to achieve adjusted gross margins in the low to mid 50% range and adjusted operating margins of approximately 10%. The following table shows a summary of TAG plan charges (in thousands):
The following table shows a rollforward of the accrued liability related to the Company’s TAG plan (in thousands):
TAG plan restructuring charges by operating segment were as follows (in thousands):
In fiscal year 2022, the Company completed its New World Fossil 2.0 ("NWF 2.0”) restructuring program it launched in 2019. The following table shows a rollforward of the accrued liability related to the Company’s NWF 2.0 restructuring plan (in thousands):
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Insider Trading Arrangements |
3 Months Ended |
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Jun. 29, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
FINANCIAL STATEMENT POLICIES (Policies) |
6 Months Ended |
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Jun. 29, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation. The condensed consolidated financial statements include the accounts of Fossil Group, Inc., a Delaware corporation, and its wholly and majority-owned subsidiaries (the “Company”). The information presented herein includes the thirteen-week period ended June 29, 2024 (“Second Quarter”) as compared to the thirteen-week period ended July 1, 2023 (“Prior Year Quarter”), and the twenty-six week period ended June 29, 2024 ("Year To Date Period") as compared to the twenty-six week period ended July 1, 2023 ("Prior Year YTD Period"). The condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s financial position as of June 29, 2024, and the results of operations for the Second Quarter, Prior Year Quarter, Year To Date Period and Prior Year YTD Period. All adjustments are of a normal, recurring nature. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K filed by the Company pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the fiscal year ended December 30, 2023, as amended (the “2023 Form 10-K”). Operating results for the Second Quarter are not necessarily indicative of the results to be achieved for the full fiscal year. Effective during the third quarter of fiscal year 2023, the Company made a change to the presentation of its available borrowing capacity under its Revolving Facility (as defined in Note 15 - Debt Activity) to exclude available borrowings that would trigger a contingent covenant. The Company's historical disclosures have been recast to be consistent with its current presentation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods reported. We base our estimates on the information available at the time and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. The Company has not made any changes in its significant accounting policies from those disclosed in the 2023 Form 10-K.
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Business | Business. The Company is a global design, marketing and distribution company that specializes in consumer fashion accessories. Its principal offerings include an extensive line of men's and women's fashion watches and jewelry, handbags, small leather goods, belts and sunglasses. In the watch and jewelry product categories, the Company has a diverse portfolio of globally recognized owned and licensed brand names under which its products are marketed. The Company's products are distributed globally through various distribution channels, including wholesale in countries where it has a physical presence, direct to the consumer through its retail stores and commercial websites and through third-party distributors in countries where the Company does not maintain a physical presence. The Company's products are offered at varying price points to meet the needs of its customers, whether they are value-conscious or luxury oriented. Based on its extensive range of accessory products, brands, distribution channels and price points, the Company is able to target style-conscious consumers across a wide age spectrum on a global basis.
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Operating Expenses | Operating Expenses. Operating expenses include selling, general and administrative ("SG&A"), other long-lived asset impairments and restructuring charges. SG&A expenses include selling and distribution expenses primarily consisting of sales and distribution labor costs, sales distribution center and warehouse facility costs, depreciation expense related to sales distribution and warehouse facilities, the four-wall operating costs of the Company's retail stores, point-of-sale expenses, advertising expenses and art, and design and product development labor costs. SG&A also includes general and administrative expenses primarily consisting of administrative support labor and support costs such as treasury, legal, information services, accounting, internal audit, human resources, executive management costs and costs associated with stock-based compensation. Restructuring charges include costs to reduce and optimize the Company’s infrastructure and store closures. See Note 16— Restructuring for additional information on the Company’s restructuring plan.
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Earnings (Loss) Per Share ("EPS") | Earnings (Loss) Per Share (“EPS”). Basic EPS is based on the weighted average number of common shares outstanding during each period. Diluted EPS adjusts basic EPS for the effects of dilutive common stock equivalents outstanding during each period using the treasury stock method.
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Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash. Restricted cash included in intangible and other-assets net was comprised primarily of pledged collateral to secure bank guarantees for the purpose of obtaining retail space. |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU"), 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its financial statement disclosures. In November 2023, FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The amendments in this update will require public entities to disclose significant segment expenses that are regularly provided to the Company's chief operating decision maker and included within segment profit and loss, an amount and description of its composition for other segment items, and expanded interim disclosures. This guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its financial statement disclosures. In October 2023, FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06"). The amendments in ASU 2023-06 modify the disclosure or presentation requirements of a variety of topics in the FASB Accounting Standards Codification (the "Codification"), with the intention of clarifying or improving them and to align the requirements in the Codification with the regulations of the U.S. Securities and Exchange Commission (the "SEC"). The effective date for ASU 2023-06 varies and is determined for each individual disclosure based on the effective date of the SEC's removal of the related disclosure. ASU 2023-06 will not have an impact on the Company's financial position or results of operations. The Organization for Economic Cooperation and Development ("OECD") and over 140 countries have agreed to enact a two-pillar solution to reform the international tax rules to address the challenges arising from the globalization and digitalization of the economy. "The Pillar Two Global Anti-Base Erosion (GloBE) Rules" provide a coordinated system to ensure that multinational enterprises with revenues above 750 million euro pay a minimum effective tax rate of 15% tax on the income arising in each of the jurisdictions in which they operate. Many aspects of Pillar Two will be effective for tax years beginning in January 2024, with certain remaining impacts to be effective in 2025. Each country must enact its own legislation to apply the Pillar Two rules. The Company does not expect Pillar Two to have a material impact on its financial results, including its annual estimated effective tax rate or liquidity for 2024, but will continue to monitor future developments.
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Fair Value Measurements | The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC 820, Fair Value Measurement and Disclosures (“ASC 820”), establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: •Level 1 — Quoted prices in active markets for identical assets or liabilities. •Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. •Level 3 — Unobservable inputs based on the Company’s assumptions. ASC 820 requires the use of observable market data if such data is available without undue cost and effort. The fair values of the Company’s forward contracts are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates.
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FINANCIAL STATEMENT POLICIES (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the numerators and denominators used in the computations of both basic and diluted EPS (in thousands, except per share data):
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Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of June 29, 2024 and July 1, 2023 that are presented in the condensed consolidated statement of cash flows (in thousands):
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Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of June 29, 2024 and July 1, 2023 that are presented in the condensed consolidated statement of cash flows (in thousands):
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REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of revenue | The Company's revenue disaggregated by major product category and timing of revenue recognition was as follows (in thousands):
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INVENTORIES (Tables) |
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Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consisted of the following (in thousands):
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WARRANTY LIABILITIES (Tables) |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Warranty Liability Activity | Warranty liability activity consisted of the following (in thousands):
_______________________________________________ (1) Changes in cost estimates related to preexisting warranties are aggregated with accruals for new standard warranties issued and foreign currency changes.
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INCOME TAXES (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Tax Expense and Related Effective Rate | The Company’s income tax (benefit) expense and related effective rates were as follows (in thousands, except percentage data):
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EMPLOYEE BENEFIT PLANS (Tables) |
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Schedule of Restricted Stock, Restricted Stock Units and Performance Restricted Stock Units Activity | The following table summarizes restricted stock unit and performance restricted stock unit activity during the Second Quarter:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
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Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables disclose changes in the balances of each component of accumulated other comprehensive income (loss), net of taxes (in thousands):
See Note—10 Derivatives and Risk Management for additional disclosures about the Company’s use of derivatives.
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SEGMENT INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Information by Operating Segment | Summary information by operating segment was as follows (in thousands):
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Schedule of Net Sales for each Class of Similar Products | The following table reflects net sales for each class of similar products in the periods presented (in thousands, except percentage data):
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DERIVATIVES AND RISK MANAGEMENT (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Forward Contracts | As of June 29, 2024, the Company had the following outstanding forward contracts designated as cash flow hedges that were entered into to hedge future payments of inventory transactions (in millions):
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Schedule of Effective Portion of Gains and Losses on Derivative Instruments Recognized In Other Comprehensive Income (loss), Net of Taxes | The gains and losses on cash flow hedges that were recognized in other comprehensive income (loss), net of taxes are set forth below (in thousands):
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Schedule of Effective Portion of Gains and Losses on Derivative Instruments Recognized In Other Comprehensive Income (loss), Net of Taxes Reclassified into Earnings and Derivatives Not Designated As Hedging Instruments Recorded Directly to Earnings | The following tables disclose the gains and losses on derivative instruments recorded in accumulated other comprehensive income (loss), net of taxes during the term of the hedging relationship and reclassified into earnings, and gains and losses on derivatives not designated as hedging instruments recorded directly to earnings (in thousands):
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Schedule of Fair Value Amounts for Derivative Instruments As Separate Asset and Liability Values on a Gross Basis and their Location on Condensed Consolidated Balance Sheets | The following table discloses the fair value amounts for the Company’s derivative instruments as separate asset and liability values, presents the fair value of derivative instruments on a gross basis, and identifies the line items in the condensed consolidated balance sheets in which the fair value amounts for these categories of derivative instruments are included (in thousands):
The following tables summarize the effects of the Company's derivative instruments on earnings (in thousands):
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FAIR VALUE MEASUREMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Fair Value Hierarchy of Assets and Liabilities Measured at Fair Value on A Recurring Basis | The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June 29, 2024 (in thousands):
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 30, 2023 (in thousands):
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INTANGIBLE AND OTHER ASSETS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible and Other Assets-net | The following table summarizes intangible and other assets (in thousands):
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Schedule of Estimated Aggregate Future Amortization Expense by Fiscal Year for Intangible Assets | Estimated aggregate future amortization expense by fiscal year for intangible assets is as follows (in thousands):
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LEASES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Leases | The components of lease expense were as follows (in thousands):
_______________________________________________ (1) Includes sublease income, which was immaterial. The following table discloses supplemental balance sheet information for the Company’s leases (in thousands):
The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases:
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Schedule of Finance Lease, Liability, to be Paid, Maturity | Future minimum lease payments by year as of June 29, 2024 were as follows (in thousands):
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Schedule of Lessee, Operating Lease, Liability, to be Paid, Maturity | Future minimum lease payments by year as of June 29, 2024 were as follows (in thousands):
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Schedule of Supplemental Cash Flow Information | Supplemental cash flow information related to leases was as follows (in thousands):
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RESTRUCTURING (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Charges by Operating Segment | The following table shows a summary of TAG plan charges (in thousands):
TAG plan restructuring charges by operating segment were as follows (in thousands):
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Schedule of Liability Incurred On Restructuring Plan | The following table shows a rollforward of the accrued liability related to the Company’s TAG plan (in thousands):
|
FINANCIAL STATEMENT POLICIES - Schedule Of Cash And Restricted Cash Equivalents (Details) - USD ($) $ in Thousands |
Jun. 29, 2024 |
Dec. 30, 2023 |
Jul. 01, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 104,906 | $ 117,197 | $ 132,107 | |
Restricted cash included in prepaid expenses and other current assets | 625 | 107 | ||
Restricted cash included in intangible and other assets-net | 3,550 | 4,722 | ||
Cash, cash equivalents and restricted cash | $ 109,081 | $ 121,583 | $ 136,936 | $ 204,075 |
REVENUE - Contract Balances (Details) - USD ($) |
Jun. 29, 2024 |
Dec. 30, 2023 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 0 | |
Deferred contract costs | 0 | |
Licensing Income | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 0 | $ 0 |
Wearable technology | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 1,200,000 | 1,700,000 |
Gift Cards | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 2,200,000 | $ 2,700,000 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Jun. 29, 2024 |
Dec. 30, 2023 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Components and parts | $ 17,817 | $ 18,931 |
Work-in-process | 261 | 0 |
Finished goods | 184,050 | 233,903 |
Inventories | $ 202,128 | $ 252,834 |
WARRANTY LIABILITIES (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Warranty liability activity | ||
Beginning balance | $ 10,122 | $ 13,623 |
Settlements in cash or kind | (2,390) | (3,766) |
Warranties issued and adjustments to preexisting warranties | 35 | 2,403 |
Ending balance | $ 7,767 | $ 12,260 |
INCOME TAXES - Schedule of Income Tax Expense and Related Effective Rate (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ 2,208 | $ (7,198) | $ (3,908) | $ (5,595) |
Effective tax rate | (6.00%) | 21.50% | 5.80% | 7.70% |
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 6 Months Ended | |
---|---|---|---|---|
Apr. 30, 2024 |
Jun. 29, 2024 |
Mar. 30, 2024 |
Jun. 29, 2024 |
|
Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefits, excluding interest and penalties | $ 17.5 | $ 17.5 | ||
Unrecognized tax benefits, excluding interest and penalties, amount that would favorably impact effective tax rate in future periods | 17.5 | 17.5 | ||
Income tax refunds | $ 57.3 | |||
Uncertain tax position release | 0.9 | $ 8.8 | ||
Unrecognized tax benefits that would favorably impact effective tax rate in future periods | 14.5 | 14.5 | ||
Penalties and interest accrued | 2.0 | 2.0 | ||
Income tax related interest expense | 6.6 | |||
Accrued income tax-related interest | $ 4.6 | $ 4.6 |
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
Jun. 29, 2024 |
Dec. 30, 2023 |
---|---|---|
Stockholders' Equity Note [Abstract] | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 53,099,052 | 52,487,020 |
Common stock, shares outstanding (in shares) | 53,099,052 | 52,487,020 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Repurchase agreement, authorizations remaining | $ 20.0 |
EMPLOYEE BENEFIT PLANS - Schedule of Restricted Stock, Restricted Stock Units and Performance Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands |
3 Months Ended |
---|---|
Jun. 29, 2024
$ / shares
shares
| |
Number of Shares | |
Nonvested (in shares) | shares | 1,834 |
Granted (in shares) | shares | 700 |
Vested (in shares) | shares | (817) |
Forfeited (in shares) | shares | (367) |
Nonvested (in shares) | shares | 1,350 |
Weighted-Average Grant Date Fair Value Per Share | |
Nonvested (in dollars per share) | $ / shares | $ 6.09 |
Granted (in dollars per share) | $ / shares | 0.88 |
Vested (in dollars per share) | $ / shares | 6.35 |
Forfeited (in dollars per share) | $ / shares | 6.08 |
Nonvested (in dollars per share) | $ / shares | $ 3.17 |
EMPLOYEE BENEFIT PLANS - Narrative (Details) - Restricted Stock Units (RSUs) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 29, 2024 |
Jun. 29, 2024 |
|
Stock-based compensation plans disclosures | ||
Fair value of restricted stock units vested | $ 800 | |
Non Employee Director | ||
Stock-based compensation plans disclosures | ||
Fair value of restricted stock units vested | $ 130 | |
Vesting percentage of awards granted | 100.00% |
SEGMENT INFORMATION - Schedule of Information by Operating Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Summary information by operating segment | ||||
Net sales | $ 259,991 | $ 321,966 | $ 514,874 | $ 647,002 |
Operating Income (Loss) | (34,003) | (35,313) | (63,209) | (72,621) |
Operating Segments | Americas | ||||
Summary information by operating segment | ||||
Net sales | 119,584 | 146,651 | 229,601 | 284,583 |
Operating Income (Loss) | 14,604 | 23,444 | 23,359 | 36,000 |
Operating Segments | Europe | ||||
Summary information by operating segment | ||||
Net sales | 74,852 | 88,279 | 153,572 | 193,952 |
Operating Income (Loss) | 9,958 | (688) | 17,352 | 6,282 |
Operating Segments | Asia | ||||
Summary information by operating segment | ||||
Net sales | 65,199 | 84,123 | 130,736 | 164,259 |
Operating Income (Loss) | 6,024 | 7,404 | 11,826 | 14,604 |
Corporate | ||||
Summary information by operating segment | ||||
Net sales | 356 | 2,913 | 965 | 4,208 |
Operating Income (Loss) | $ (64,589) | $ (65,473) | $ (115,746) | $ (129,507) |
DERIVATIVES AND RISK MANAGEMENT - Cash Flow Hedges (Details) |
6 Months Ended |
---|---|
Jun. 29, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Foreign currency cash flow hedge maximum length of projection term | 24 months |
Forecasted purchases to manage fluctuations (as a percent) (up to) | 85.00% |
DERIVATIVES AND RISK MANAGEMENT - Schedule of Outstanding Forward Contracts (Details) - Jun. 29, 2024 - Forward Contracts - Designated as Cash Flow Hedges € in Millions, ¥ in Millions, £ in Millions, $ in Millions, $ in Millions, $ in Millions |
EUR (€) |
USD ($) |
CAD ($) |
GBP (£) |
JPY (¥) |
AUD ($) |
---|---|---|---|---|---|---|
Euro | ||||||
Derivative [Line Items] | ||||||
Notional amount | € 20.6 | $ 23.1 | ||||
Canadian dollar | ||||||
Derivative [Line Items] | ||||||
Notional amount | 6.9 | $ 9.2 | ||||
British pound | ||||||
Derivative [Line Items] | ||||||
Notional amount | 2.4 | £ 1.9 | ||||
Japanese yen | ||||||
Derivative [Line Items] | ||||||
Notional amount | 0.9 | ¥ 119.0 | ||||
Australian dollar | ||||||
Derivative [Line Items] | ||||||
Notional amount | 0.6 | $ 0.9 | ||||
U.S. dollar | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 0.7 | ¥ 90.0 |
DERIVATIVES AND RISK MANAGEMENT - Non-designated Hedges (Details) - Jun. 29, 2024 - Forward Contracts - Not designated as hedging instruments R in Millions, $ in Millions |
USD ($) |
ZAR (R) |
---|---|---|
Derivative [Line Items] | ||
Fair value of designated forward contracts | $ | $ 0.9 | |
Hedged amount | R | R 16.6 |
DERIVATIVES AND RISK MANAGEMENT - Schedule of Derivative Instruments Recognized in Other Comprehensive Income (Loss) (Details) - Cash flow hedges - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Derivative [Line Items] | ||||
Total gain (loss) recognized in other comprehensive income (loss), net of taxes | $ 370 | $ (442) | $ 1,120 | $ (3,123) |
Forward Contracts | ||||
Derivative [Line Items] | ||||
Total gain (loss) recognized in other comprehensive income (loss), net of taxes | $ 370 | $ (442) | $ 1,120 | $ (3,123) |
FAIR VALUE MEASUREMENTS - Schedule of Fair Value Hierarchy of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value Measurement, Recurring Basis - USD ($) $ in Thousands |
Jun. 29, 2024 |
Dec. 30, 2023 |
---|---|---|
Assets: | ||
Forward contracts | $ 1,231 | $ 359 |
Total | 1,231 | 359 |
Liabilities: | ||
Contingent consideration | 586 | |
Forward contracts | 118 | 1,079 |
Total | 118 | 1,665 |
Level 1 | ||
Assets: | ||
Forward contracts | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | |
Forward contracts | 0 | 0 |
Total | 0 | 0 |
Level 2 | ||
Assets: | ||
Forward contracts | 1,231 | 359 |
Total | 1,231 | 359 |
Liabilities: | ||
Contingent consideration | 0 | |
Forward contracts | 118 | 1,079 |
Total | 118 | 1,079 |
Level 3 | ||
Assets: | ||
Forward contracts | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Contingent consideration | 586 | |
Forward contracts | 0 | 0 |
Total | $ 0 | $ 586 |
INTANGIBLE AND OTHER ASSETS - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for intangible assets | $ 0.2 | $ 0.2 | $ 0.5 | $ 0.5 |
INTANGIBLE AND OTHER ASSETS - Schedule of Estimated Aggregate Future Amortization Expense by Fiscal Year for Intangible Assets (Details) $ in Thousands |
Jun. 29, 2024
USD ($)
|
---|---|
Amortization Expense | |
2024 (remaining) | $ 458 |
2025 | 726 |
2026 | 138 |
2027 | 120 |
2028 | 114 |
Thereafter | $ 431 |
LEASES - Narrative (Details) |
Jun. 29, 2024
option
|
---|---|
Lessee, Lease, Description [Line Items] | |
Number of renewals (or more) | 1 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 10 years |
LEASES - Schedule of Components of Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 15,869 | $ 18,614 | $ 32,178 | $ 36,491 |
Short-term lease cost | 240 | 295 | 526 | 510 |
Variable lease cost | $ 5,285 | $ 5,534 | $ 10,638 | $ 11,653 |
LEASES - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Jun. 29, 2024 |
Dec. 30, 2023 |
---|---|---|
Assets | ||
Operating lease right-of-use assets | $ 140,168 | $ 151,000 |
Current: | ||
Current operating lease liabilities | 39,689 | 43,565 |
Noncurrent: | ||
Long-term operating lease liabilities | $ 125,360 | $ 137,644 |
LEASES - Schedule of Weighted-Average Remaining Lease Term and Discount Rate (Details) |
Jun. 29, 2024 |
Dec. 30, 2023 |
---|---|---|
Weighted-average remaining lease term: | ||
Operating leases | 6 years 3 months 18 days | 6 years 4 months 24 days |
Weighted-average discount rate: | ||
Operating leases | 15.00% | 14.90% |
LEASES - Schedule of Future Minimum Lease Payments (Details) $ in Thousands |
Jun. 29, 2024
USD ($)
|
---|---|
Operating Leases | |
2023 (remaining) | $ 34,997 |
2025 | 54,544 |
2026 | 41,148 |
2027 | 29,042 |
2028 | 18,375 |
Thereafter | 87,018 |
Total lease payments | 265,124 |
Less: Interest | 100,075 |
Total lease obligations | $ 165,049 |
LEASES - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 38,818 | $ 43,774 |
Leased assets obtained in exchange for new operating lease liabilities | $ 12,809 | $ 18,570 |
RESTRUCTURING - Narrative (Details) - Forecast - TAG Plan - USD ($) $ in Millions |
Dec. 27, 2025 |
Dec. 28, 2024 |
---|---|---|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, annualized benefits cost | $ 300 | |
Expected restructuring charges | $ 40 | |
Adjusted gross margins achievement percentage | 50.00% | |
Adjusted operating margins achievement percentage | 10.00% | |
Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring charges | $ 100 | |
Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring charges | $ 120 |
RESTRUCTURING - Schedule of TAG Plan charges (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | $ 16,673 | $ 4,632 | $ 26,726 | $ 11,729 |
TAG Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 16,673 | 7,543 | 26,485 | 19,903 |
Cost of sales | TAG Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 0 | 2,911 | (241) | 8,174 |
Selling, general and administrative expenses | TAG Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | $ 16,673 | $ 4,632 | $ 26,726 | $ 11,729 |
RESTRUCTURING - Schedule of Restructuring Charges by Operating Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 29, 2024 |
Jul. 01, 2023 |
Jun. 29, 2024 |
Jul. 01, 2023 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 16,673 | $ 4,632 | $ 26,726 | $ 11,729 |
TAG Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 16,673 | 7,543 | 26,485 | 19,903 |
TAG Plan | Operating Segments | Americas | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 262 | 1,535 | 626 | 4,493 |
TAG Plan | Operating Segments | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 1,869 | 3,386 | 5,426 | 7,342 |
TAG Plan | Operating Segments | Asia | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 93 | 1,686 | 1,056 | 5,953 |
TAG Plan | Corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 14,449 | $ 936 | $ 19,377 | $ 2,115 |
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