Fossil posted its first annual profit in two years for 2025, driven by cost cuts and store closures, with modest growth expected in 2026.

Fossil reported a net income of $11 million for Q4 2025 and full-year 2025, its first annual profit in two years, driven by a 20% revenue decline due to store closures and discontinued product lines, improved gross margins, and a 16% drop in SG&A expenses. The company closed 49 stores over three years, reduced inventory by 15% year-over-year, and expects 15 closures in 2026. Revenue for 2026 is forecast to decline 4% to 6% due to closures and a comparison with an extra week in 2025, though fourth-quarter 2026 is expected to return to growth. Full-year 2026 operating margin is projected at 3% to 5%, with break-even free cash flow, and long-term targets include mid-single-digit sales growth and positive free cash flow by 2028.