Fossil Group (NASDAQ: FOSL) reported Q2 EPS of ($0.16), $0.41 better than the analyst estimate of ($0.57). Revenue for the quarter came in at $577 million versus the consensus estimate of $561.85 million.

Guidance:

Over the next several years, Fossil Group will continue to transform the Company’s business model to address changes in consumer behaviors and their purchases of traditional watches and connected devices, as well as jewelry and leathers. During the Company’s ongoing transformation project, it believes certain operating metrics are the most appropriate performance measures. These metrics include net sales, gross margin, operating expenses, operating margin, other income (expense), interest expense, income (loss) before income taxes and Adjusted EBITDA.

The Company is providing guidance on a GAAP basis. For comparison purposes, the Company has also provided additional information which quantifies the estimated impact on its operating expenses and operating income for non-operational items impacting operating results for fiscal 2018 and the second quarter of fiscal 2018. The Company expects the following during fiscal 2018:

GAAP GuidanceFor fiscal 2018:• Net sales in the range of (10)% to (6)%, including the estimated negative impact of business exits of approximately (5)% and currency benefits of approximately 1%• Gross margin in the range of 51% to 52%• Operating expenses, including restructuring charges, ranging from $1.25 billion to $1.30 billion• Operating margin in the range of 1% to 3%• Other income (expense) of approximately $(4) million based on prevailing currency rates• Interest expense of approximately $45 million• Income (loss) before income taxes in the range of $(16) million to $18 million

For the third quarter of fiscal 2018:• Net sales in the range of (16)% to (10)%, including the estimated negative impacts of business exits and currency of approximately (6)% and (1)%, respectively• Gross margin in the range of 50% to 52%• Operating expenses, including restructuring charges, ranging from $300 million to $320 million• Operating margin in the range of (1)% to 1%• Other income (expense) of approximately $(2) million based on prevailing currency rates• Interest expense of approximately $12 million• Income (loss) before income taxes in the range of $(20) million to $(8) million

For the fourth quarter of fiscal 2018:• Net sales in the range of (14)% to (8)%, including the estimated negative impacts of business exits and currency of approximately (5)% and (1)%, respectively• Gross margin in the range of 50% to 52%• Operating expenses, including restructuring charges, ranging from $330 million to $350 million• Operating margin in the range of 8% to 10%• Other income (expense) of approximately $1 million based on prevailing currency rates• Interest expense of approximately $12 million• Income (loss) before income taxes in the range of $55 million to $78 million

For earnings history and earnings-related data on Fossil Group (FOSL) click here.