Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 30, 2019 | May 02, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | Fossil Group, Inc. | |
Entity Central Index Key | 0000883569 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-28 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 50,411,443 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 271,442 | $ 403,373 |
Accounts receivable - net of allowances of $12,989 and $14,001, respectively | 199,898 | 328,022 |
Inventories | 384,069 | 377,622 |
Prepaid expenses and other current assets | 133,106 | 149,552 |
Total current assets | 988,515 | 1,258,569 |
Property, plant and equipment - net of accumulated depreciation of $455,357 and $453,319, respectively | 172,707 | 183,203 |
Operating lease right-of-use assets | 311,953 | 0 |
Intangible and other assets-net | 116,716 | 133,426 |
Total long-term assets | 601,376 | 316,629 |
Total assets | 1,589,891 | 1,575,198 |
Current liabilities: | ||
Accounts payable | 138,278 | 169,561 |
Short-term and current portion of long-term debt | 65,891 | 126,427 |
Accrued expenses: | ||
Current operating lease liabilities | 69,172 | 0 |
Compensation | 54,020 | 76,467 |
Royalties | 12,029 | 30,582 |
Customer liabilities | 56,573 | 71,252 |
Transaction taxes | 13,333 | 32,438 |
Other | 58,206 | 70,614 |
Income taxes payable | 29,025 | 28,462 |
Total current liabilities | 496,527 | 605,803 |
Long-term income taxes payable | 28,465 | 28,110 |
Deferred income tax liabilities | 2,563 | 2,439 |
Long-term debt | 161,130 | 269,788 |
Long-term operating lease liabilities | 311,618 | 0 |
Other long-term liabilities | 40,362 | 80,427 |
Total long-term liabilities | 544,138 | 380,764 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity: | ||
Common stock, 49,772 and 49,518 shares issued and outstanding at March 30, 2019 and December 28, 2018, respectively | 498 | 495 |
Additional paid-in capital | 273,434 | 268,113 |
Retained earnings | 339,916 | 381,626 |
Accumulated other comprehensive income (loss) | (68,190) | (64,691) |
Total Fossil Group, Inc. stockholders’ equity | 545,658 | 585,543 |
Noncontrolling interests | 3,568 | 3,088 |
Total stockholders’ equity | 549,226 | 588,631 |
Total liabilities and stockholders’ equity | $ 1,589,891 | $ 1,575,198 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 465,268 | $ 569,156 |
Cost of sales | 217,341 | 281,465 |
Gross profit | 247,927 | 287,691 |
Operating expenses: | ||
Selling, general and administrative expenses | 257,684 | 294,654 |
Restructuring charges | 10,187 | 21,318 |
Total operating expenses | 267,871 | 315,972 |
Operating income (loss) | (19,944) | (28,281) |
Interest expense | 8,122 | 10,691 |
Other income (expense) - net | 25,912 | (1,888) |
Income (loss) before income taxes | (2,154) | (40,860) |
Provision for income taxes | 9,608 | 6,645 |
Net income (loss) | (11,762) | (47,505) |
Less: Net income attributable to noncontrolling interests | 480 | 768 |
Net income (loss) attributable to Fossil Group, Inc. | (12,242) | (48,273) |
Other comprehensive income (loss), net of taxes: | ||
Currency translation adjustment | (2,490) | 12,301 |
Cash flow hedges - net change | (1,009) | (1,157) |
Total other comprehensive income (loss) | (3,499) | 11,144 |
Total comprehensive income (loss) | (15,261) | (36,361) |
Less: Comprehensive income attributable to noncontrolling interests | 480 | 768 |
Comprehensive income (loss) attributable to Fossil Group, Inc. | $ (15,741) | $ (37,129) |
Earnings (loss) per share: | ||
Basic (in dollars per share) | $ (0.25) | $ (0.99) |
Diluted (in dollars per share) | $ (0.25) | $ (0.99) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 49,618 | 48,712 |
Diluted (in shares) | 49,618 | 48,712 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable - allowances | $ 12,989 | $ 14,001 |
Property, plant and equipment, accumulated depreciation | $ 455,357 | $ 453,319 |
Common stock, shares issued (in shares) | 49,772 | 49,518 |
Common stock, shares outstanding (in shares) | 49,772 | 49,518 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Fossil Group, Inc. Stockholders’ Equity | Common stock | Additional paid-in capital | Treasury stock | Retained earnings | Accumulated other comprehensive income (loss) | Noncontrolling Interests |
Increase (Decrease) in Shareholders' Equity | ||||||||
Adoption of Accounting Standards Update (ASU) 2014-09 | $ (26,542) | $ (26,542) | $ (26,542) | |||||
Balance at beginning of period (in shares) at Dec. 30, 2017 | 48,643 | |||||||
Beginning balance at Dec. 30, 2017 | 580,947 | 576,133 | $ 486 | $ 242,263 | $ 0 | 409,653 | $ (76,269) | $ 4,814 |
Increase (Decrease) in Shareholders' Equity | ||||||||
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units (in shares) | 324 | |||||||
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units | 0 | $ 4 | (4) | |||||
Acquisition of common stock for employee tax withholding | (855) | (855) | (855) | |||||
Retirement of common stock (in shares) | (67) | |||||||
Retirement of common stock | 0 | $ (1) | (854) | 855 | ||||
Stock-based compensation | (9,799) | (9,799) | (9,799) | |||||
Net Income (loss) | (47,505) | (48,273) | (48,273) | 768 | ||||
Other comprehensive income (loss) | 11,144 | 11,144 | 11,144 | |||||
Distribution of noncontrolling interest earnings and other | (433) | 42 | 42 | (475) | ||||
Balance at end of period (in shares) at Mar. 31, 2018 | 48,900 | |||||||
Ending balance at Mar. 31, 2018 | 526,555 | 521,448 | $ 489 | 251,246 | 0 | 334,838 | (65,125) | 5,107 |
Increase (Decrease) in Shareholders' Equity | ||||||||
Adoption of Accounting Standards Update (ASU) 2014-09 | $ (29,468) | (29,468) | (29,468) | |||||
Balance at beginning of period (in shares) at Dec. 29, 2018 | 49,518 | 49,518 | ||||||
Beginning balance at Dec. 29, 2018 | $ 588,631 | 585,543 | $ 495 | 268,113 | 0 | 381,626 | (64,691) | 3,088 |
Increase (Decrease) in Shareholders' Equity | ||||||||
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units (in shares) | 349 | |||||||
Common stock issued upon exercise of stock options, stock appreciation rights and restricted stock units | 170 | 170 | $ 4 | 166 | ||||
Acquisition of common stock for employee tax withholding | (1,515) | (1,515) | (1,515) | |||||
Retirement of common stock (in shares) | (95) | |||||||
Retirement of common stock | $ (1) | (1,514) | 1,515 | |||||
Stock-based compensation | 6,669 | 6,669 | 6,669 | |||||
Net Income (loss) | (11,762) | (12,242) | (12,242) | 480 | ||||
Other comprehensive income (loss) | $ (3,499) | (3,499) | (3,499) | |||||
Balance at end of period (in shares) at Mar. 30, 2019 | 49,772 | 49,772 | ||||||
Ending balance at Mar. 30, 2019 | $ 549,226 | $ 545,658 | $ 498 | $ 273,434 | $ 0 | $ 339,916 | $ (68,190) | $ 3,568 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Operating Activities: | ||
Net Income (loss) | $ (11,762) | $ (47,505) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation, amortization and accretion | 14,439 | 16,019 |
Non-cash lease expense | 31,136 | 0 |
Stock-based compensation | 4,386 | 4,341 |
Decrease in allowance for returns and markdowns | (9,293) | (7,959) |
Property, plant and equipment and other long-lived asset impairment losses | 880 | 81 |
Non-cash restructuring charges | 4,236 | 7,169 |
Bad debt expense | 994 | 962 |
Loss on extinguishment of debt | 0 | 718 |
Other non-cash items | 1,801 | 4,412 |
Gain on asset divestitures | (23,134) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 128,819 | 175,060 |
Inventories | (7,238) | 18,100 |
Prepaid expenses and other current assets | (9,738) | (14,461) |
Accounts payable | (49,651) | (71,774) |
Accrued expenses | (69,239) | (86,375) |
Income taxes payable | 981 | (3,095) |
Net cash provided by (used in) operating activities | 7,617 | (4,307) |
Investing Activities: | ||
Additions to property, plant and equipment | (6,571) | (3,832) |
Increase in intangible and other assets | (907) | (180) |
Proceeds from the sale of property, plant and equipment | 1,164 | 112 |
Asset divestitures | 41,570 | 0 |
Net cash provided by (used in) investing activities | 35,256 | (3,900) |
Financing Activities: | ||
Acquisition of common stock for employee tax withholding | (1,515) | (855) |
Distribution of noncontrolling interest earnings | 0 | (433) |
Debt borrowings | 1,825 | 764,125 |
Debt payments | (171,871) | (742,497) |
Payment for shares of Fossil Accessories South Africa Pty. Ltd. | (947) | (1,547) |
Debt issuance costs and other | 124 | (6,843) |
Net cash (used in) provided by financing activities | (172,384) | 11,950 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (2,276) | (3,639) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (131,787) | 104 |
Cash, cash equivalents, and restricted cash: | ||
Beginning of period | 410,883 | 231,655 |
End of period | $ 279,096 | $ 231,759 |
FINANCIAL STATEMENT POLICIES
FINANCIAL STATEMENT POLICIES | 3 Months Ended |
Mar. 30, 2019 | |
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 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 March 30, 2019 , and the results of operations for the thirteen-week periods ended March 30, 2019 (“ First Quarter”) and March 31, 2018 (“Prior Year Quarter”), respectively. All adjustments are of a normal, recurring nature. Effective during fiscal year 2018, the Company made changes to the presentation of reportable segments to reflect changes in the way its chief operating decision maker evaluates the performance of its operations, develops strategy, and allocates capital resources. The Company's historical segment disclosures have been recast to be consistent with its current presentation. 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 29, 2018 (the “ 2018 Form 10-K”). Operating results for the First Quarter are not necessarily indicative of the results to be achieved for the full fiscal year. 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. Actual results could differ from those estimates. The Company has not made any changes in its significant accounting policies from those disclosed in the 2018 Form 10-K, other than the adoption of ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification ® ("ASU 2016-02") and ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"). 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 expenses (“SG&A”), trade name impairment 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, design and product development labor costs. SG&A also includes general and administrative expenses primarily consisting of administrative support labor and “back office” or 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 reorganize, refine and optimize the Company’s infrastructure as well as store closure expenses. 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): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Numerator: Net income (loss) attributable to Fossil Group, Inc. $ (12,242 ) $ (48,273 ) Denominator: Basic EPS computation: Basic weighted average common shares outstanding 49,618 48,712 Basic EPS $ (0.25 ) $ (0.99 ) Diluted EPS computation: Basic weighted average common shares outstanding 49,618 48,712 Diluted weighted average common shares outstanding 49,618 48,712 Diluted EPS $ (0.25 ) $ (0.99 ) At the end of the First Quarter, approximately 4.4 million weighted average shares issuable under stock-based awards were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 1.1 million weighted average performance-based shares at the end of the First Quarter. At the end of the Prior Year Quarter, 4.8 million weighted average shares issuable under stock-based awards were not included in the diluted EPS calculation because they were antidilutive. The total antidilutive weighted average shares included 1.2 million weighted average performance-based shares at the end of the Prior Year Quarter. Cash, Cash Equivalents and Restricted Cash. The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of March 30, 2019 and March 31, 2018 that are presented in the condensed consolidated statement of cash flows (in thousands): March 30, 2019 March 31, 2018 Cash and cash equivalents $ 271,442 $ 229,863 Restricted cash included in prepaid expenses and other current assets 31 33 Restricted cash included in intangible and other assets-net 7,623 1,863 Cash, cash equivalents and restricted cash $ 279,096 $ 231,759 Leases. The Company evaluates contractual arrangements at inception to determine if individual agreements are a lease or contain an identifiable lease component as defined by Accounting Standards Codification ("ASC") 842, Leases ("ASC 842"). When evaluating contracts to determine appropriate classification and recognition under ASC 842, significant judgment may be necessary to determine, among other criteria, if an embedded leasing arrangement exists, the length of the term, classification as either an operating or financing lease and whether renewal or termination options are reasonably certain to be exercised. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate, adjusted for the lease term and lease country, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and are reduced by lease incentives. Some lease terms include options to extend or terminate the lease and they are included in the measurement of the lease assets and lease liabilities if the Company is reasonably certain that those options will be exercised. Variable lease payments are generally expensed as incurred and include certain index-based changes in rent and certain non-lease components such as maintenance and other services provided by the lessor to the extent the charges are variable. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term. Lease agreements with lease and non-lease components are combined as a single lease component for all classes of underlying assets. The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) ("ASU 2018-15"). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company does not expect this standard to have a material impact on the Company's consolidated results of operations or financial position. In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14"). ASU 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosures. The guidance is effective for fiscal years ending after December 15, 2020. The Company does not expect this standard to have a material impact on the Company's consolidated results of operations or financial position. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). ASU 2018-13 eliminates certain disclosure requirements related to the fair value hierarchy, adds new disclosure requirements related to the changes in unrealized gains and losses for recurring Level 3 fair value measurements and disclosing the range and weighted average of significant observable inputs used to develop Level 3 fair value measurements and modifies certain disclosure requirements related to measurement uncertainty for fair value measurements. The guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company does not expect this standard to have a material impact on the Company's consolidated results of operations or financial position. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 modifies the measurement of expected credit losses of certain financial instruments, including trade receivables. The estimate of expected credit losses will require the consideration of historical information, current information and reasonable and supportable forecasts. ASU 2016-13 is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company is still evaluating the effect of adopting ASU 2016-13. Recently Adopted Accounting Standards The Company adopted ASU 2016-02 on December 30, 2018, the first day of fiscal 2019, using the modified retrospective approach and accordingly information for periods prior to December 30, 2018 are presented under Accounting Standards Codification ("ASC") 840, Leases ("ASC 840"), the predecessor to ASC 842. The Company has elected to use the transition practical expedient. The transition practical expedient allows Companies to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than the earliest period presented. The Company used the package of practical expedients that allows companies to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Company did not elect to adopt the hindsight practical expedient and therefore maintained the lease terms previously determined under ASC 840. Adoption of ASU 2016-02 resulted in recording right-of-use ("ROU") lease assets of $370.3 million which were written down to $327.3 million as a result of $43.0 million of previous store impairment, excluding taxes, and lease liabilities of $390.6 million as of December 30, 2018. The Company recognized a cumulative-effect adjustment to the opening balance of retained earnings of approximately $29.5 million as of December 30, 2018 as a result of previous store impairment and a previous sale leaseback transaction, net of tax effects. Under ASC 840, the gain on the sale leaseback transaction was deferred over the lease term, however under ASC 842 the gain is recognized at the time of sale. Accordingly, a retained earnings adjustment to recognize the remaining gain was recorded upon the adoption of ASC 842. The standard did not have a material impact on the Company's consolidated results of operations or cash flows. See "Note 14—Leases" for additional lease disclosures. In August 2017, the FASB issued ASU 2017-12. ASU 2017-12 amends and simplifies hedge accounting guidance in order to enable entities to better portray the economics of their risk management activities. The Company adopted ASU 2017-12 on the first day of fiscal year 2019. Adoption resulted in $2.5 million of hedge settlement gains being recorded in cost of sales for the First Quarter which would have been recognized in other income (expense) - net under previous accounting guidance. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 30, 2019 | |
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): For the 13 Weeks Ended March 30, 2019 Americas Europe Asia Corporate Total Product type Watches $ 148,316 $ 116,253 $ 101,606 $ 3 $ 366,178 Leathers 30,752 11,358 11,795 — 53,905 Jewelry 9,176 20,750 1,234 — 31,160 Other 2,125 4,916 2,265 4,719 14,025 Consolidated $ 190,369 $ 153,277 $ 116,900 $ 4,722 $ 465,268 Timing of revenue recognition Revenue recognized at a point in time $ 189,701 $ 152,916 $ 116,708 $ 1,172 $ 460,497 Revenue recognized over time 668 361 192 3,550 4,771 Consolidated $ 190,369 $ 153,277 $ 116,900 $ 4,722 $ 465,268 For the 13 Weeks Ended March 31, 2018 Americas Europe Asia Corporate Total Product type Watches $ 195,677 $ 150,795 $ 101,143 $ — $ 447,615 Leathers 38,330 18,038 12,891 — 69,259 Jewelry 12,024 28,508 1,274 — 41,806 Other 3,036 4,447 2,553 440 10,476 Consolidated $ 249,067 $ 201,788 $ 117,861 $ 440 $ 569,156 Timing of revenue recognition Revenue recognized at a point in time $ 248,610 $ 201,564 $ 117,758 $ 440 $ 568,372 Revenue recognized over time 457 224 103 — 784 Consolidated $ 249,067 $ 201,788 $ 117,861 $ 440 $ 569,156 Contract Balances. As of March 30, 2019 , the Company had no material contract assets on the Company's condensed consolidated balance sheets and no deferred contract costs. The Company had contract liabilities of (i) $20.7 million and $21.8 million as of March 30, 2019 and December 29, 2018 , respectively, related to remaining performance obligations on licensing income, (ii) $5.8 million and $6.2 million as of March 30, 2019 and December 29, 2018 , respectively, primarily related to remaining performance obligations on wearable technology products and (iii) $3.6 million and $3.8 million as of March 30, 2019 and December 29, 2018 , respectively, related to gift cards issued. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following (in thousands): March 30, 2019 December 29, 2018 Components and parts $ 30,190 $ 28,183 Work-in-process 6,100 9,458 Finished goods 347,779 339,981 Inventories $ 384,069 $ 377,622 |
WARRANTY LIABILITIES
WARRANTY LIABILITIES | 3 Months Ended |
Mar. 30, 2019 | |
Product Warranties Disclosures [Abstract] | |
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): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Beginning balance $ 22,807 $ 19,405 Settlements in cash or kind (4,125 ) (3,008 ) Warranties issued and adjustments to preexisting warranties (1) 3,384 3,777 Ending balance $ 22,066 $ 20,174 _______________________________________________ (1) Changes in cost estimates related to preexisting warranties are aggregated with accruals for new standard warranties issued and foreign currency changes. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s income tax expense and related effective rates were as follows (in thousands, except percentage data): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Income tax (benefit) expense $ 9,608 $ 6,645 Effective tax rate (446.1 )% (16.3 )% The higher effective tax rate in the First Quarter as compared to the Prior Year Quarter was primarily due to a higher level of foreign income which increased the tax expense in the numerator and lowered the overall pre-tax loss in the denominator of the effective tax rate computation. Since 2018, no tax benefit has been accrued on the U.S. net operating losses (“NOLs”) due to the Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Cuts and Jobs Act signed into law in 2017, whereby certain foreign income inclusions absorb the U.S. NOL, eliminating the availability of any future tax benefit. As of March 30, 2019 , the Company's total amount of unrecognized tax benefits, excluding interest and penalties, was $39.7 million , which would favorably impact the effective tax rate in future periods, if recognized. The Company is subject to examinations in various state and foreign jurisdictions for its 2011-2018 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 March 30, 2019 , the Company had recorded $17.8 million of 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 March 30, 2019 , the total amount of accrued income tax-related interest and penalties included in the condensed consolidated balance sheets was $4.7 million and $1.0 million , respectively. For the First Quarter, the Company accrued income tax related interest expense of $1.0 million . |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY 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 canceled, the Company accounts for retirements by allocating the repurchase price to common stock, additional paid-in capital and retained 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 Securities Exchange Act of 1934. At March 30, 2019 and December 29, 2018 , all treasury stock had been effectively retired. As of March 30, 2019 , the Company had $30.0 million of repurchase authorizations remaining under its repurchase program. The Company is currently prohibited by the terms of its Credit Agreement (as defined in Note 15) from making open market repurchases of its common stock and did not repurchase any common stock under its authorized stock repurchase plans during the First Quarter or Prior Year Quarter. Controlling and Noncontrolling Interests. The Company has entered into an agreement to purchase the outstanding minority interest shares in Fossil Accessories South Africa Pty. Ltd. (‘‘Fossil South Africa’’), representing the entire noncontrolling interest in the subsidiary. The purchase price is based on variable payments through fiscal year 2021, assuming the put option is exercised by the seller each year. During the First Quarter, the Company made payments of $0.9 million towards the purchase price. The present value of the remaining purchase price is $1.6 million as of March 30, 2019 . The transaction was accounted for as an equity transaction. The Company recorded $0.7 million of the variable consideration in accrued expenses-other and $0.9 million in other long-term liabilities in the consolidated balance sheets at March 30, 2019 . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Stock-Based Compensation Plans. The following table summarizes stock options and stock appreciation rights activity during the First Quarter: Stock Options and Stock Appreciation Rights Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in Thousands) (in Years) (in Thousands) Outstanding at December 29, 2018 1,930 $ 49.25 1.3 $ 37 Granted — — Exercised (12 ) 13.65 18 Forfeited or expired (883 ) 37.21 Outstanding at March 30, 2019 1,035 59.95 2.0 — Exercisable at March 30, 2019 1,019 $ 60.43 1.9 $ — The aggregate intrinsic value shown in the table above is before income taxes and is based on (i) the exercise price for outstanding and exercisable options/rights at March 30, 2019 and (ii) the fair market value of the Company’s common stock on the exercise date for options/rights that were exercised during the First Quarter. Stock Options and Stock Appreciation Rights Outstanding and Exercisable. The following tables summarize information with respect to stock options and stock appreciation rights outstanding and exercisable at March 30, 2019 : Cash Stock Appreciation Rights Outstanding Cash Stock Appreciation Rights Exercisable Number of Weighted- Weighted- Number of Weighted- Average Exercise Price (in Thousands) (in Years) (in Thousands) 20 $ 36.73 0.2 20 $ 36.73 Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Number of Shares Weighted- (in Thousands) (in Years) (in Thousands) $29.49 - $47.99 40 $ 38.40 0.8 40 $ 38.40 $55.04 - $83.83 76 81.37 1.8 76 81.37 $95.91 - $131.46 107 128.00 2.7 107 128.00 Total 223 $ 96.08 2.0 223 $ 96.08 Stock Appreciation Rights Outstanding Stock Appreciation Rights Exercisable Range of Number of Weighted- Weighted- Number of Weighted- (in Thousands) (in Years) (in Thousands) $29.49 - $47.99 625 $ 38.91 1.8 609 $ 39.16 $55.04 - $83.83 96 78.68 3.5 96 78.68 $95.91 - $131.46 71 113.13 2.3 71 113.13 Total 792 $ 50.39 2.0 776 $ 50.82 Restricted Stock Units and Performance Restricted Stock Units. The following table summarizes restricted stock unit and performance restricted stock unit activity during the First Quarter: Restricted Stock Units and Performance Restricted Stock Units Number of Shares Weighted-Average Grant Date Fair Value Per Share (in Thousands) Nonvested at December 29, 2018 3,011 $ 17.86 Granted 2 17.13 Vested (343 ) 21.56 Forfeited (192 ) 29.14 Nonvested at March 30, 2019 2,478 $ 16.48 The total fair value of restricted stock units vested during the First Quarter was approximately $5.4 million . Vesting of performance restricted stock units is based on achievement of operating margin growth and achievement of sales growth and operating margin targets in relation to the performance of a certain identified peer group. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables illustrate changes in the balances of each component of accumulated other comprehensive income (loss), net of taxes (in thousands): For the 13 Weeks Ended March 30, 2019 Currency Translation Adjustments Cash Flow Hedges Forward Contracts Pension Plan Total Beginning balance $ (74,868 ) $ 8,582 $ 1,595 $ (64,691 ) Other comprehensive income (loss) before reclassifications (2,490 ) 1,709 — (781 ) Tax (expense) benefit — (263 ) — (263 ) Amounts reclassed from accumulated other comprehensive income (loss) — 2,655 — 2,655 Tax (expense) benefit — (200 ) — (200 ) Total other comprehensive income (loss) (2,490 ) (1,009 ) — (3,499 ) Ending balance $ (77,358 ) $ 7,573 $ 1,595 $ (68,190 ) For the 13 Weeks Ended March 31, 2018 Currency Translation Adjustments Cash Flow Hedges Forward Contracts Pension Plan Total Beginning balance $ (64,499 ) $ (10,098 ) $ (1,672 ) $ (76,269 ) Other comprehensive income (loss) before reclassifications 12,301 (8,312 ) — 3,989 Tax (expense) benefit — 2,137 — 2,137 Amounts reclassed from accumulated other comprehensive income (loss) — (5,956 ) — (5,956 ) Tax (expense) benefit — 938 — 938 Total other comprehensive income (loss) 12,301 (1,157 ) — 11,144 Ending balance $ (52,198 ) $ (11,255 ) $ (1,672 ) $ (65,125 ) See “Note 10—Derivatives and Risk Management” for additional disclosures about the Company’s use of derivatives. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 30, 2019 | |
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, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan 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. Due to changes in the Company’s reportable segments as discussed in Note 1 to the Condensed Consolidated Financial Statements, segment results for the Prior Year Quarter have been recast to present results on a comparable basis. These changes had no impact on the consolidated net sales or operating income. Summary information by operating segment was as follows (in thousands): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Net Sales Operating Income (Loss) Net Sales Operating Income (Loss) Americas $ 190,369 $ 10,918 $ 249,067 $ 18,078 Europe 153,277 14,280 201,788 26,010 Asia 116,900 21,041 117,861 13,267 Corporate 4,722 (66,183 ) 440 (85,636 ) Consolidated $ 465,268 $ (19,944 ) $ 569,156 $ (28,281 ) March 30, 2019 December 29, 2018 Long-Term Assets Total Assets Long-Term Assets Total Assets Americas $ 195,421 $ 479,486 $ 61,914 $ 393,273 Europe 180,295 371,852 99,253 353,797 Asia 75,914 213,414 29,990 173,666 Corporate 149,746 525,139 125,472 654,462 Total $ 601,376 $ 1,589,891 $ 316,629 $ 1,575,198 The following tables reflect net sales for each class of similar products in the periods presented (in thousands, except percentage data): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Net Sales Percentage of Total Net Sales Percentage of Total Watches $ 366,178 78.7 % $ 447,615 78.7 % Leathers 53,905 11.6 69,259 12.2 Jewelry 31,160 6.7 41,806 7.3 Other 14,025 3.0 10,476 1.8 Total $ 465,268 100.0 % $ 569,156 100.0 % |
DERIVATIVES AND RISK MANAGEMENT
DERIVATIVES AND RISK MANAGEMENT | 3 Months Ended |
Mar. 30, 2019 | |
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 . These forward contracts meet the criteria for hedge accounting, which requires that they represent foreign currency-denominated forecasted transactions in which (i) the operating unit that has the foreign currency exposure is a party to the hedging instrument and (ii) the hedged transaction is denominated in a currency other than the hedging unit’s functional currency. At the inception of each forward contract designated as a cash flow hedge, the hedging relationship is expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk. The Company assesses hedge effectiveness under the critical terms matched method at inception and at least quarterly throughout the life of the hedging relationship. If the critical terms (i.e., amounts, currencies and settlement dates) of the forward contract match the terms of the forecasted transaction, the Company concludes that the hedge is effective. Hedge accounting is discontinued if it is determined that the derivative is not highly effective. 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. All derivative instruments are recognized as either assets or liabilities at fair value in the condensed consolidated balance sheets. The Company records all forward contract hedge assets and liabilities on a gross basis as they do not meet the balance sheet netting criteria because the Company does not have master netting agreements established with the derivative counterparties that would allow for net settlement. Derivatives designated as cash flow hedges are recorded at fair value at each balance sheet date and the change in fair value is recorded to accumulated other comprehensive income (loss) within the equity section of the Company’s condensed consolidated balance sheets until such derivative’s gains or losses become realized or the cash flow hedge relationship is terminated. If the cash flow hedge relationship is terminated, the derivative’s gains or losses that are recorded in accumulated other comprehensive income (loss) are immediately recognized in earnings. There were no gains or losses reclassified into earnings as a result of the discontinuance of cash flow hedges in the First Quarter or Prior Year Quarter. As of March 30, 2019 , the Company had the following outstanding forward contracts designated as cash flow hedges that were entered into to hedge the future payments of inventory transactions (in millions): Functional Currency Contract Currency Type Amount Type Amount Euro 146.0 U.S. dollar 173.9 Canadian dollar 58.3 U.S. dollar 44.6 British pound 22.9 U.S. dollar 30.4 Japanese yen 2,076.3 U.S. dollar 19.2 Mexican peso 391.9 U.S. dollar 19.6 Australian dollar 13.5 U.S. dollar 9.6 U.S. dollar 27.2 Japanese yen 2,950.0 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 March 30, 2019 , the Company had non-designated forward contracts of approximately $0.9 million on 13.3 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 during the First Quarter and Prior Year Quarter are set forth below (in thousands): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Cash flow hedges: Forward contracts $ 1,446 $ (6,175 ) Total gain (loss) recognized in other comprehensive income (loss), net of taxes $ 1,446 $ (6,175 ) The following table illustrates 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 during the First Quarter and Prior Year Quarter (in thousands): Derivative Instruments Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location Effect of Derivative Instruments For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Forward contracts designated as cash flow hedging instruments Cost of sales Total gain (loss) reclassified from accumulated other comprehensive income (loss) $ 2,473 $ — Forward contracts designated as cash flow hedging instruments Other income (expense)-net Total gain (loss) reclassified from accumulated other comprehensive income (loss) $ (18 ) $ (5,018 ) Forward contracts not designated as hedging instruments Other income (expense)-net Total gain (loss) recognized in income $ (13 ) $ 343 Interest rate swap not designated as a cash flow hedging instrument Other income (expense)-net Total gain (loss) recognized in income $ — $ 68 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): Asset Derivatives Liability Derivatives March 30, 2019 December 29, 2018 March 30, 2019 December 29, 2018 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 $ 9,013 Prepaid expenses and other current assets $ 9,217 Accrued expenses- other $ 796 Accrued expenses- other $ 660 Forward contracts not designated as cash flow hedging instruments Prepaid expenses and other current assets 24 Prepaid expenses and other current assets 15 Accrued expenses- other — Accrued expenses- other — Forward contracts designated as cash flow hedging instruments Intangible and other assets-net 350 Intangible and other assets-net 453 Other long-term liabilities 124 Other long-term liabilities 70 Total $ 9,387 $ 9,685 $ 920 $ 730 The following table summarizes the effects of the Company's derivative instruments on earnings (in thousands): Effect of Derivative Instruments For the 13 Weeks Ended March 30, 2019 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 $ 217,341 $ 25,912 Gain (loss) on cash flow hedging relationships: Forward contracts designated as cash flow hedging instruments: Total gain (loss) reclassified from other comprehensive income (loss) 2,473 (18 ) At the end of the First Quarter, the Company had forward contracts designated as cash flow hedges with maturities extending through September 2020. As of March 30, 2019 , an estimated net gain of $7.4 million is expected to be reclassified into earnings within the next twelve months at prevailing foreign currency exchange rates. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 30, 2019 | |
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 March 30, 2019 (in thousands): Fair Value at March 30, 2019 Level 1 Level 2 Level 3 Total Assets: Forward contracts $ — $ 9,387 $ — $ 9,387 Deferred compensation plan assets: Investment in publicly traded mutual funds 4,850 — — 4,850 Total $ 4,850 $ 9,387 $ — $ 14,237 Liabilities: Contingent consideration $ — $ — $ 1,600 $ 1,600 Forward contracts — 920 — 920 Total $ — $ 920 $ 1,600 $ 2,520 The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 29, 2018 (in thousands): Fair Value at December 29, 2018 Level 1 Level 2 Level 3 Total Assets: Forward contracts $ — $ 9,685 $ — $ 9,685 Deferred compensation plan assets: Investment in publicly traded mutual funds 4,442 — — 4,442 Total $ 4,442 $ 9,685 $ — $ 14,127 Liabilities: Contingent consideration $ — $ — $ 2,174 $ 2,174 Forward contracts — 730 — 730 Total $ — $ 730 $ 2,174 $ 2,904 The fair values of the Company’s deferred compensation plan assets are based on quoted prices. The deferred compensation plan assets are recorded in intangible and other assets-net in the Company’s condensed consolidated balance sheets. 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 March 30, 2019 , debt, excluding unamortized debt issuance costs and capital leases, was recorded at cost and had a carrying value of $230.6 million and a fair value of approximately $230.2 million . As of December 29, 2018 , the fair value of the Company's debt approximated its carrying amount. The fair value of debt was based on observable market inputs. In accordance with the provisions of ASC 360, Property, Plant and Equipment , operating lease assets with a carrying amount of $4.3 million and property, plant and equipment-net with a carrying amount of $0.5 million related to retail store leasehold improvements, fixturing and shop-in-shops were written down to a fair value of $2.3 million and $0.3 million , respectively, resulting in impairment charges of $2.2 million during the First Quarter. The fair values of fixed assets related to Company-owned retail stores and operating lease assets were determined using Level 3 inputs. Of the $2.2 million impairment expense, $1.3 million and $0.1 million was recorded in restructuring charges in the Americas and Europe segment, respectively, and $0.8 million was recorded in SG&A in the Europe segment. The fair value of the contingent consideration liability related to Fossil South Africa was determined using Level 3 inputs. See "Note 6—Stockholders' Equity" for additional disclosures about the equity transaction. The contingent consideration is based on Fossil South Africa's projected earnings and dividends through fiscal year 2020 with the final payments expected the following year. A discount rate of 13% was used to calculate the present value of the contingent consideration. The present value of the contingent consideration liability was valued at $1.6 million as of March 30, 2019 . |
INTANGIBLE AND OTHER ASSETS
INTANGIBLE AND OTHER ASSETS | 3 Months Ended |
Mar. 30, 2019 | |
INTANGIBLE AND OTHER ASSETS | |
INTANGIBLE AND OTHER ASSETS | INTANGIBLE AND OTHER ASSETS The following table summarizes intangible and other assets (in thousands): March 30, 2019 December 29, 2018 Useful Gross Accumulated Gross Accumulated Lives Amount Amortization Amount Amortization Intangibles-subject to amortization: Trademarks 10 yrs. $ 4,293 $ 3,902 $ 4,293 $ 3,859 Customer lists 5-10 yrs. 52,471 39,431 52,635 38,028 Patents 3-20 yrs. 2,310 2,162 2,310 2,154 Developed technology 7 yrs. 2,193 137 36,100 15,471 Other 7-20 yrs. 259 248 261 247 Total intangibles-subject to amortization 61,526 45,880 95,599 59,759 Intangibles-not subject to amortization: Trade names 32,422 32,427 Other assets: Other deposits 17,769 19,641 Deferred compensation plan assets 4,850 4,442 Deferred tax asset-net 28,407 23,695 Restricted cash 7,623 7,479 Tax receivable 7,060 7,060 Forward contracts 350 453 Investments 500 500 Other 2,089 1,889 Total other assets 68,648 65,159 Total intangible and other assets $ 162,596 $ 45,880 $ 193,185 $ 59,759 Total intangible and other assets-net $ 116,716 $ 133,426 Amortization expense for intangible assets was approximately $1.7 million and $3.0 million for the First Quarter and Prior Year Quarter, respectively. Estimated aggregate future amortization expense by fiscal year for intangible assets is as follows (in thousands): Fiscal Year Amortization Expense 2019 (remaining) $ 5,115 2020 $ 6,309 2021 $ 2,483 2022 $ 1,629 2023 $ 59 2024 $ 51 On January 16, 2019, the Company sold intellectual property related to a smartwatch technology under development by the Company to Google, Inc. for a cash purchase price of $40.0 million . As a result of the sale, the Company reduced intangible assets by $18.4 million and recorded a gain of $21.6 million in other income (expense) - net in the Company's condensed consolidated statements of income (loss) and comprehensive income (loss). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation. 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
LEASES | 3 Months Ended |
Mar. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company's leases consist primarily of retail space, offices, warehouses, distribution centers 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 one to ten 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. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such 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 leases 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): Lease Cost Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location For the 13 Weeks Ended March 30, 2019 Operating lease cost (1) SG&A $ 30,858 Finance lease cost: Amortization of right-of-use assets SG&A $ 448 Interest on lease liabilities Interest expense $ 9 Short-term lease cost SG&A $ 1,700 Variable lease cost SG&A $ 6,116 _______________________________________________ (1) Includes sublease income, which is immaterial. The following table discloses supplemental balance sheet information for the Company’s leases (in thousands): Leases Condensed Consolidated Balance Sheets Location March 30, 2019 Assets Operating Operating lease right-of-use assets $ 311,953 Finance Property, plant and equipment - net of accumulated depreciation of $4,013 $ 5,905 Liabilities Current: Operating Current operating lease liabilities $ 69,172 Finance Short-term and current portion of long-term debt $ 967 Noncurrent: Operating Long-term operating lease liabilities $ 311,618 Finance Long-term debt $ 2,193 The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases: Lease Term and Discount Rate March 30, 2019 Weighted-average remaining lease term: Operating leases 6.4 years Finance leases 3.0 years Weighted-average discount rate: Operating leases 13.9 % Finance leases 1.2 % Future minimum lease payments by year as of March 30, 2019 were as follows (in thousands): Fiscal Year Operating Leases Finance Leases 2019 (remaining) $ 93,793 $ 753 2020 105,909 987 2021 84,900 985 2022 73,920 492 2023 61,845 — 2024 42,593 — Thereafter 144,044 — Total lease payments $ 607,004 $ 3,217 Less: Interest 226,214 57 Total lease obligations $ 380,790 $ 3,160 Future minimum lease payments by year as of December 29, 2018 were as follows (in thousands): Fiscal Year Operating Leases Finance Leases 2019 $ 135,025 $ 951 2020 105,668 947 2021 84,230 947 2022 73,928 696 2023 61,710 — Thereafter 186,201 — Total lease payments $ 646,762 $ 3,541 Less: Interest 84 Finance lease obligations $ 3,457 Supplemental cash flow information related to leases was as follows (in thousands): For the 13 Weeks Ended March 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20,092 Operating cash flows from finance leases 9 Financing cash flows from finance leases 236 Leased assets obtained in exchange for new operating lease liabilities 5,148 As of March 30, 2019 , the Company did not have any material operating or finance leases that have been signed but not commenced. |
DEBT ACTIVITY
DEBT ACTIVITY | 3 Months Ended |
Mar. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT ACTIVITY | DEBT ACTIVITY On January 29, 2018, the Company, as U.S. borrower, and certain of its foreign subsidiaries, as non-U.S. borrowers, entered into a Second Amended and Restated Credit Agreement (the "Credit Agreement"). The Credit Agreement provides for (i) revolving credit loans in the amount of $325 million , subject to a borrowing base (as described below), (the "Revolving Credit Facility"), with an up to $45.0 million subfacility for letters of credit, and (ii) a term loan made to the Company in the amount of $425 million (the "Term Loan Facility"). The Credit Agreement expires and is due and payable on December 31, 2020. The Credit Agreement amended and restated that certain credit agreement, dated as of March 9, 2015, as amended, which was scheduled to mature on May 17, 2019. Availability under the Revolving Credit Facility and any letters of credit are subject to a borrowing base equal to, (a) with respect to Fossil Group Inc., the sum of (i) 85% of eligible U.S. accounts receivable and 90% of net U.S. credit card receivables (less any dilution reserve), (ii) the lesser of (A) 65% of the lower of cost or market value of eligible U.S. finished good inventory and (B) 85% of the appraised net orderly liquidation value of eligible U.S. finished good inventory, minus (iii) the aggregate amount of reserves, if any, established by the Administrative Agent in good faith and in the exercise of reasonable business judgment from the perspective of a secured asset-based lender; and (b) with respect to each non-U.S. borrower, the sum of (i) 85% of eligible accounts receivable of the non-U.S. borrowers (less any dilution reserve) and (ii) the least of (A) 65% of the lower of cost or market value of eligible foreign finished goods inventory of the non-U.S. borrowers, (B) 85% of the appraised net orderly liquidation value of eligible foreign finished goods inventory of the non-U.S. borrowers, and (C) $185,000,000 minus (iii) the aggregate amount of reserves, if any, established by the Administrative Agent in good faith and in the exercise of reasonable business judgment from the perspective of a secured asset-based lender. In connection with the Credit Agreement, the Company and all of its domestic subsidiaries entered into a Collateral Agreement in favor of the Administrative Agent, pursuant to which the Company and such subsidiaries granted liens on all or substantially all of their assets in order to secure the Company’s obligations under the Credit Agreement and the other loan documents (the “Obligations”). Additionally, all of the Company’s domestic subsidiaries entered into a Guaranty Agreement in favor of the Administrative Agent, pursuant to which such subsidiaries guarantee the payment and performance of the Obligations. Additionally, Fossil Group Europe and the other non-U.S. borrowers from time to time party to the Credit Agreement 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. Amounts outstanding under the Revolving Credit Facility bear interest per annum at the (a) LIBOR rate plus the applicable interest margin, (b) the daily LIBOR rate plus the applicable interest margin or (c) the base rate plus the applicable interest margin. The applicable interest margin varies from 4.00% to 5.00% for LIBOR rate loans and daily LIBOR rate loans and 1.50% to 3.00% for base rate loans and is based on the Company’s average daily excess availability under the Revolving Credit Facility for the most recently ended calendar quarter, which is an amount equal (a) the lesser of (i) $325 million and (ii) the aggregate borrowing base minus (b) the amount of all outstanding borrowings and letter of credit obligations under the Revolving Credit Facility, for each day during the applicable period divided by the number of days in such period. The applicable interest margin will increase by 1% per annum on each anniversary of the closing of the Credit Agreement. The base rate loans under the Revolving Credit Facility are available only to the Company and Fossil Group Europe and loans denominated in U.S. dollars. Amounts outstanding under the Term Loan Facility bear interest at a rate per annum equal to (a) the LIBOR rate plus 7% prior to January 28, 2019 , which increased to the LIBOR rate plus 8% on January 29, 2019 and will increase to the LIBOR rate plus 9% on January 29, 2020 and thereafter or (b) the base rate plus 5.5% prior to January 28, 2019, which increased to the base rate plus 6.5% on January 29, 2019 and will increase to the base rate plus 7.5% on January 29, 2020 and thereafter. The Company is required to repay the outstanding principal balance of the Term Loan Facility in the amount of $64.1 million on March 31, 2020 and the outstanding balance on December 31, 2020. Additionally, loans under the Credit Agreement may be prepaid, in whole or in part, at the option of the Company, in minimum principal amounts of (a) $1.0 million or increments of $1.0 million in excess thereof, with respect to a base rate loan under the Revolving Credit Facility, (b) $5.0 million or increments of $1.0 million in excess thereof, with respect to a LIBOR rate loan or a daily LIBOR rate loan under the Revolving Credit Facility, and (c) $5.0 million or increments of $1.0 million in excess thereof, with respect to the Term Loan Facility. Loans under the Credit Agreement must be repaid with the net cash proceeds of certain asset sales, insurance and condemnation events, certain debt and equity issuances and certain cash dividends received from the Company’s subsidiaries. The Company may permanently reduce the revolving credit commitment at any time, in whole or in part, without premium or penalty, in a minimum aggregate principal amount of not less than $3.0 million or increments of $1.0 million in excess thereof. The Company is required to pay a commitment fee on the unused amounts of the commitments under the Revolving Credit Facility, payable quarterly in arrears, of 0.5% on the average daily unused portion of the overall commitment under the Revolving Credit Facility. The repayment obligation under the Credit Agreement can be accelerated upon the occurrence of an event of default, including the failure to pay principal or interest, a material inaccuracy of a representation or warranty, violation of covenants, cross-default, change in control, bankruptcy events, failure of a loan document provision, certain Employee Retirement Income Security Act events and material judgments. Financial covenants governing the Credit Agreement require the Company to maintain (a) a minimum fixed charge coverage ratio measured quarterly on a rolling twelve-month basis of 1.15 to 1.00 if the Company’s quarter-end balances of cash and cash equivalents plus the excess availability under the Revolving Credit Facility is less than $200 million ; (b) a maximum leverage ratio measured as of the last day of each fiscal quarter for the period of four fiscal quarters ending on such date of (i) 3.75 to 1.0 for each fiscal quarter ending during the period from December 30, 2018 through September 28, 2019 and (ii) 3.5 to 1.0 thereafter; (c) a minimum trailing twelve-month EBITDA tested quarterly of $110 million (beginning with the fiscal quarter ended December 29, 2018); (d) a minimum liquidity covenant of unrestricted cash and cash equivalents plus available and unused capacity under the Revolving Credit Facility equal to $160 million ; and (e) maximum capital expenditures of $35 million per year. Additionally, the Company is restricted from making open market repurchases of its common stock. The Company had net payments of $170.2 million under the Term Loan Facility during the First Quarter. The Company had no borrowings or payments under the Revolving Credit Facility during the First Quarter. Amounts available under the Revolving Credit Facility are reduced by any amounts outstanding under standby letters of credit. As of March 30, 2019 , the Company had available borrowing capacity of $211.1 million under the Revolving Credit Facility. The Company incurred approximately $6.5 million of interest expense related to the Term Loan Facility during the First Quarter. The Company did not incur interest expense related to the Revolving Credit Facility during the First Quarter. The Company incurred approximately $1.0 million of interest expense related to the amortization of debt issuance costs during the First Quarter. |
RESTRUCTURING
RESTRUCTURING | 3 Months Ended |
Mar. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING The Company implemented a multi-year restructuring program that began in fiscal year 2016 called New World Fossil ("NWF 1.0"). As part of NWF 1.0, the Company targets to improve operating profit and support sales growth through a leaner infrastructure and an enhanced business model. The Company is working to achieve greater efficiencies from production to distribution through activities such as organizational changes, reducing its overall product assortment, optimizing its base cost structure and consolidating facilities. The Company also intends to build a quicker and more responsive operating platform. The Company is reducing its retail footprint to reflect the evolving shopping habits of today's consumer, which results in restructuring costs, such as store impairment, lease exit obligations and termination fees and accelerated depreciation. The Company is on track to spend a total estimated $150 million in restructuring charges under its NWF 1.0 program. NWF 1.0 restructuring charges of approximately $9.3 million , $46.6 million and $48.2 million were recorded during the First Quarter, fiscal year 2018 and fiscal year 2017 , respectively. The following table shows a rollforward of the accrued liability related to the Company’s NWF 1.0 restructuring plan (in thousands): For the 13 Weeks Ended March 30, 2019 Liabilities Liabilities December 29, 2018 Charges Cash Payments Non-cash Items March 30, 2019 Store closures $ 2,818 $ 2,664 $ 482 $ 1,953 $ 3,047 Professional services 2,198 485 819 — 1,864 Severance and employee-related benefits 3,011 6,197 3,013 2,283 3,912 Total $ 8,027 $ 9,346 $ 4,314 $ 4,236 $ 8,823 For the 13 Weeks Ended March 31, 2018 Liabilities Liabilities December 30, 2017 Charges Cash Payments Non-cash Items March 31, 2018 Store closures $ 2,973 $ 8,556 $ 5,413 $ 1,711 $ 4,405 Professional services 185 1,158 645 — 698 Severance and employee-related benefits 1,317 11,604 4,128 5,458 3,335 Total $ 4,475 $ 21,318 $ 10,186 $ 7,169 $ 8,438 NWF 1.0 restructuring charges by operating segment were as follows (in thousands): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Americas $ 2,662 $ 8,124 Europe 1,234 3,367 Asia 547 695 Corporate 4,903 9,132 Consolidated $ 9,346 $ 21,318 Additionally, during the First Quarter the Company launched a new restructuring program, New World Fossil 2.0 (“NWF 2.0”), which is focused on optimizing the Company’s structures to be more efficient, with faster decision-making and a more customer-centric focus. In addition to optimizing the way the Company goes to market, the Company is also pursuing additional gross margin expansion opportunities. The Company is taking a zero based budgeting approach to adjust its business model to enable more investment in digital capabilities and marketing, move closer to the consumer and react more quickly to the ever-evolving consumer shopping patterns. The Company recorded restructuring expenses of $0.8 million under this new NWF 2.0 restructuring program during the First Quarter. |
FINANCIAL STATEMENT POLICIES (P
FINANCIAL STATEMENT POLICIES (Policies) | 3 Months Ended |
Mar. 30, 2019 | |
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 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 March 30, 2019 , and the results of operations for the thirteen-week periods ended March 30, 2019 (“ First Quarter”) and March 31, 2018 (“Prior Year Quarter”), respectively. All adjustments are of a normal, recurring nature. Effective during fiscal year 2018, the Company made changes to the presentation of reportable segments to reflect changes in the way its chief operating decision maker evaluates the performance of its operations, develops strategy, and allocates capital resources. The Company's historical segment disclosures have been recast to be consistent with its current presentation. 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 29, 2018 (the “ 2018 Form 10-K”). Operating results for the First Quarter are not necessarily indicative of the results to be achieved for the full fiscal year. 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. Actual results could differ from those estimates. The Company has not made any changes in its significant accounting policies from those disclosed in the 2018 Form 10-K, other than the adoption of ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification ® ("ASU 2016-02") and ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"). |
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. |
Operating Expenses | Operating Expenses. Operating expenses include selling, general and administrative expenses (“SG&A”), trade name impairment 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, design and product development labor costs. SG&A also includes general and administrative expenses primarily consisting of administrative support labor and “back office” or 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 reorganize, refine and optimize the Company’s infrastructure as well as store closure expenses. |
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. |
Leases | Leases. The Company evaluates contractual arrangements at inception to determine if individual agreements are a lease or contain an identifiable lease component as defined by Accounting Standards Codification ("ASC") 842, Leases ("ASC 842"). When evaluating contracts to determine appropriate classification and recognition under ASC 842, significant judgment may be necessary to determine, among other criteria, if an embedded leasing arrangement exists, the length of the term, classification as either an operating or financing lease and whether renewal or termination options are reasonably certain to be exercised. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate, adjusted for the lease term and lease country, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and are reduced by lease incentives. Some lease terms include options to extend or terminate the lease and they are included in the measurement of the lease assets and lease liabilities if the Company is reasonably certain that those options will be exercised. Variable lease payments are generally expensed as incurred and include certain index-based changes in rent and certain non-lease components such as maintenance and other services provided by the lessor to the extent the charges are variable. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term. Lease agreements with lease and non-lease components are combined as a single lease component for all classes of underlying assets. The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. |
Recently Issued and Adopted Accounting Standards | Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) ("ASU 2018-15"). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company does not expect this standard to have a material impact on the Company's consolidated results of operations or financial position. In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14"). ASU 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosures. The guidance is effective for fiscal years ending after December 15, 2020. The Company does not expect this standard to have a material impact on the Company's consolidated results of operations or financial position. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). ASU 2018-13 eliminates certain disclosure requirements related to the fair value hierarchy, adds new disclosure requirements related to the changes in unrealized gains and losses for recurring Level 3 fair value measurements and disclosing the range and weighted average of significant observable inputs used to develop Level 3 fair value measurements and modifies certain disclosure requirements related to measurement uncertainty for fair value measurements. The guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company does not expect this standard to have a material impact on the Company's consolidated results of operations or financial position. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 modifies the measurement of expected credit losses of certain financial instruments, including trade receivables. The estimate of expected credit losses will require the consideration of historical information, current information and reasonable and supportable forecasts. ASU 2016-13 is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company is still evaluating the effect of adopting ASU 2016-13. Recently Adopted Accounting Standards The Company adopted ASU 2016-02 on December 30, 2018, the first day of fiscal 2019, using the modified retrospective approach and accordingly information for periods prior to December 30, 2018 are presented under Accounting Standards Codification ("ASC") 840, Leases ("ASC 840"), the predecessor to ASC 842. The Company has elected to use the transition practical expedient. The transition practical expedient allows Companies to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than the earliest period presented. The Company used the package of practical expedients that allows companies to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Company did not elect to adopt the hindsight practical expedient and therefore maintained the lease terms previously determined under ASC 840. Adoption of ASU 2016-02 resulted in recording right-of-use ("ROU") lease assets of $370.3 million which were written down to $327.3 million as a result of $43.0 million of previous store impairment, excluding taxes, and lease liabilities of $390.6 million as of December 30, 2018. The Company recognized a cumulative-effect adjustment to the opening balance of retained earnings of approximately $29.5 million as of December 30, 2018 as a result of previous store impairment and a previous sale leaseback transaction, net of tax effects. Under ASC 840, the gain on the sale leaseback transaction was deferred over the lease term, however under ASC 842 the gain is recognized at the time of sale. Accordingly, a retained earnings adjustment to recognize the remaining gain was recorded upon the adoption of ASC 842. The standard did not have a material impact on the Company's consolidated results of operations or cash flows. See "Note 14—Leases" for additional lease disclosures. In August 2017, the FASB issued ASU 2017-12. ASU 2017-12 amends and simplifies hedge accounting guidance in order to enable entities to better portray the economics of their risk management activities. The Company adopted ASU 2017-12 on the first day of fiscal year 2019. Adoption resulted in $2.5 million of hedge settlement gains being recorded in cost of sales for the First Quarter which would have been recognized in other income (expense) - net under previous accounting guidance. |
Fair Value Measurements | The fair values of the Company’s deferred compensation plan assets are based on quoted prices. The deferred compensation plan assets are recorded in intangible and other assets-net in the Company’s condensed consolidated balance sheets. 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. 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. |
FINANCIAL STATEMENT POLICIES (T
FINANCIAL STATEMENT POLICIES (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Numerators and denominators used in the computations of both basic and diluted EPS | The following table reconciles the numerators and denominators used in the computations of both basic and diluted EPS (in thousands, except per share data): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Numerator: Net income (loss) attributable to Fossil Group, Inc. $ (12,242 ) $ (48,273 ) Denominator: Basic EPS computation: Basic weighted average common shares outstanding 49,618 48,712 Basic EPS $ (0.25 ) $ (0.99 ) Diluted EPS computation: Basic weighted average common shares outstanding 49,618 48,712 Diluted weighted average common shares outstanding 49,618 48,712 Diluted EPS $ (0.25 ) $ (0.99 ) |
Schedule of cash and cash equivalents | The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of March 30, 2019 and March 31, 2018 that are presented in the condensed consolidated statement of cash flows (in thousands): March 30, 2019 March 31, 2018 Cash and cash equivalents $ 271,442 $ 229,863 Restricted cash included in prepaid expenses and other current assets 31 33 Restricted cash included in intangible and other assets-net 7,623 1,863 Cash, cash equivalents and restricted cash $ 279,096 $ 231,759 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The Company's revenue disaggregated by major product category and timing of revenue recognition was as follows (in thousands): For the 13 Weeks Ended March 30, 2019 Americas Europe Asia Corporate Total Product type Watches $ 148,316 $ 116,253 $ 101,606 $ 3 $ 366,178 Leathers 30,752 11,358 11,795 — 53,905 Jewelry 9,176 20,750 1,234 — 31,160 Other 2,125 4,916 2,265 4,719 14,025 Consolidated $ 190,369 $ 153,277 $ 116,900 $ 4,722 $ 465,268 Timing of revenue recognition Revenue recognized at a point in time $ 189,701 $ 152,916 $ 116,708 $ 1,172 $ 460,497 Revenue recognized over time 668 361 192 3,550 4,771 Consolidated $ 190,369 $ 153,277 $ 116,900 $ 4,722 $ 465,268 For the 13 Weeks Ended March 31, 2018 Americas Europe Asia Corporate Total Product type Watches $ 195,677 $ 150,795 $ 101,143 $ — $ 447,615 Leathers 38,330 18,038 12,891 — 69,259 Jewelry 12,024 28,508 1,274 — 41,806 Other 3,036 4,447 2,553 440 10,476 Consolidated $ 249,067 $ 201,788 $ 117,861 $ 440 $ 569,156 Timing of revenue recognition Revenue recognized at a point in time $ 248,610 $ 201,564 $ 117,758 $ 440 $ 568,372 Revenue recognized over time 457 224 103 — 784 Consolidated $ 249,067 $ 201,788 $ 117,861 $ 440 $ 569,156 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consisted of the following (in thousands): March 30, 2019 December 29, 2018 Components and parts $ 30,190 $ 28,183 Work-in-process 6,100 9,458 Finished goods 347,779 339,981 Inventories $ 384,069 $ 377,622 |
WARRANTY LIABILITIES (Tables)
WARRANTY LIABILITIES (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of warranty liability activity | Warranty liability activity consisted of the following (in thousands): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Beginning balance $ 22,807 $ 19,405 Settlements in cash or kind (4,125 ) (3,008 ) Warranties issued and adjustments to preexisting warranties (1) 3,384 3,777 Ending balance $ 22,066 $ 20,174 _______________________________________________ (1) Changes in cost estimates related to preexisting warranties are aggregated with accruals for new standard warranties issued and foreign currency changes. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense and related effective rate | The Company’s income tax expense and related effective rates were as follows (in thousands, except percentage data): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Income tax (benefit) expense $ 9,608 $ 6,645 Effective tax rate (446.1 )% (16.3 )% |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock options and stock appreciation rights activity | The following table summarizes stock options and stock appreciation rights activity during the First Quarter: Stock Options and Stock Appreciation Rights Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in Thousands) (in Years) (in Thousands) Outstanding at December 29, 2018 1,930 $ 49.25 1.3 $ 37 Granted — — Exercised (12 ) 13.65 18 Forfeited or expired (883 ) 37.21 Outstanding at March 30, 2019 1,035 59.95 2.0 — Exercisable at March 30, 2019 1,019 $ 60.43 1.9 $ — |
Summary of stock options and stock appreciation rights outstanding and exercisable | The following tables summarize information with respect to stock options and stock appreciation rights outstanding and exercisable at March 30, 2019 : Cash Stock Appreciation Rights Outstanding Cash Stock Appreciation Rights Exercisable Number of Weighted- Weighted- Number of Weighted- Average Exercise Price (in Thousands) (in Years) (in Thousands) 20 $ 36.73 0.2 20 $ 36.73 Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Number of Shares Weighted- (in Thousands) (in Years) (in Thousands) $29.49 - $47.99 40 $ 38.40 0.8 40 $ 38.40 $55.04 - $83.83 76 81.37 1.8 76 81.37 $95.91 - $131.46 107 128.00 2.7 107 128.00 Total 223 $ 96.08 2.0 223 $ 96.08 Stock Appreciation Rights Outstanding Stock Appreciation Rights Exercisable Range of Number of Weighted- Weighted- Number of Weighted- (in Thousands) (in Years) (in Thousands) $29.49 - $47.99 625 $ 38.91 1.8 609 $ 39.16 $55.04 - $83.83 96 78.68 3.5 96 78.68 $95.91 - $131.46 71 113.13 2.3 71 113.13 Total 792 $ 50.39 2.0 776 $ 50.82 |
Summary 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 First Quarter: Restricted Stock Units and Performance Restricted Stock Units Number of Shares Weighted-Average Grant Date Fair Value Per Share (in Thousands) Nonvested at December 29, 2018 3,011 $ 17.86 Granted 2 17.13 Vested (343 ) 21.56 Forfeited (192 ) 29.14 Nonvested at March 30, 2019 2,478 $ 16.48 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of changes in the balances of each component of accumulated other comprehensive income (loss), net of taxes | The following tables illustrate changes in the balances of each component of accumulated other comprehensive income (loss), net of taxes (in thousands): For the 13 Weeks Ended March 30, 2019 Currency Translation Adjustments Cash Flow Hedges Forward Contracts Pension Plan Total Beginning balance $ (74,868 ) $ 8,582 $ 1,595 $ (64,691 ) Other comprehensive income (loss) before reclassifications (2,490 ) 1,709 — (781 ) Tax (expense) benefit — (263 ) — (263 ) Amounts reclassed from accumulated other comprehensive income (loss) — 2,655 — 2,655 Tax (expense) benefit — (200 ) — (200 ) Total other comprehensive income (loss) (2,490 ) (1,009 ) — (3,499 ) Ending balance $ (77,358 ) $ 7,573 $ 1,595 $ (68,190 ) For the 13 Weeks Ended March 31, 2018 Currency Translation Adjustments Cash Flow Hedges Forward Contracts Pension Plan Total Beginning balance $ (64,499 ) $ (10,098 ) $ (1,672 ) $ (76,269 ) Other comprehensive income (loss) before reclassifications 12,301 (8,312 ) — 3,989 Tax (expense) benefit — 2,137 — 2,137 Amounts reclassed from accumulated other comprehensive income (loss) — (5,956 ) — (5,956 ) Tax (expense) benefit — 938 — 938 Total other comprehensive income (loss) 12,301 (1,157 ) — 11,144 Ending balance $ (52,198 ) $ (11,255 ) $ (1,672 ) $ (65,125 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary information by operating segment | Summary information by operating segment was as follows (in thousands): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Net Sales Operating Income (Loss) Net Sales Operating Income (Loss) Americas $ 190,369 $ 10,918 $ 249,067 $ 18,078 Europe 153,277 14,280 201,788 26,010 Asia 116,900 21,041 117,861 13,267 Corporate 4,722 (66,183 ) 440 (85,636 ) Consolidated $ 465,268 $ (19,944 ) $ 569,156 $ (28,281 ) March 30, 2019 December 29, 2018 Long-Term Assets Total Assets Long-Term Assets Total Assets Americas $ 195,421 $ 479,486 $ 61,914 $ 393,273 Europe 180,295 371,852 99,253 353,797 Asia 75,914 213,414 29,990 173,666 Corporate 149,746 525,139 125,472 654,462 Total $ 601,376 $ 1,589,891 $ 316,629 $ 1,575,198 |
Schedule of net sales for each class of similar products | The following tables reflect net sales for each class of similar products in the periods presented (in thousands, except percentage data): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Net Sales Percentage of Total Net Sales Percentage of Total Watches $ 366,178 78.7 % $ 447,615 78.7 % Leathers 53,905 11.6 69,259 12.2 Jewelry 31,160 6.7 41,806 7.3 Other 14,025 3.0 10,476 1.8 Total $ 465,268 100.0 % $ 569,156 100.0 % |
DERIVATIVES AND RISK MANAGEME_2
DERIVATIVES AND RISK MANAGEMENT (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of outstanding forward contracts | As of March 30, 2019 , the Company had the following outstanding forward contracts designated as cash flow hedges that were entered into to hedge the future payments of inventory transactions (in millions): Functional Currency Contract Currency Type Amount Type Amount Euro 146.0 U.S. dollar 173.9 Canadian dollar 58.3 U.S. dollar 44.6 British pound 22.9 U.S. dollar 30.4 Japanese yen 2,076.3 U.S. dollar 19.2 Mexican peso 391.9 U.S. dollar 19.6 Australian dollar 13.5 U.S. dollar 9.6 U.S. dollar 27.2 Japanese yen 2,950.0 |
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 during the First Quarter and Prior Year Quarter are set forth below (in thousands): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Cash flow hedges: Forward contracts $ 1,446 $ (6,175 ) Total gain (loss) recognized in other comprehensive income (loss), net of taxes $ 1,446 $ (6,175 ) |
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 table illustrates 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 during the First Quarter and Prior Year Quarter (in thousands): Derivative Instruments Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location Effect of Derivative Instruments For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Forward contracts designated as cash flow hedging instruments Cost of sales Total gain (loss) reclassified from accumulated other comprehensive income (loss) $ 2,473 $ — Forward contracts designated as cash flow hedging instruments Other income (expense)-net Total gain (loss) reclassified from accumulated other comprehensive income (loss) $ (18 ) $ (5,018 ) Forward contracts not designated as hedging instruments Other income (expense)-net Total gain (loss) recognized in income $ (13 ) $ 343 Interest rate swap not designated as a cash flow hedging instrument Other income (expense)-net Total gain (loss) recognized in income $ — $ 68 |
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): Asset Derivatives Liability Derivatives March 30, 2019 December 29, 2018 March 30, 2019 December 29, 2018 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 $ 9,013 Prepaid expenses and other current assets $ 9,217 Accrued expenses- other $ 796 Accrued expenses- other $ 660 Forward contracts not designated as cash flow hedging instruments Prepaid expenses and other current assets 24 Prepaid expenses and other current assets 15 Accrued expenses- other — Accrued expenses- other — Forward contracts designated as cash flow hedging instruments Intangible and other assets-net 350 Intangible and other assets-net 453 Other long-term liabilities 124 Other long-term liabilities 70 Total $ 9,387 $ 9,685 $ 920 $ 730 The following table summarizes the effects of the Company's derivative instruments on earnings (in thousands): Effect of Derivative Instruments For the 13 Weeks Ended March 30, 2019 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 $ 217,341 $ 25,912 Gain (loss) on cash flow hedging relationships: Forward contracts designated as cash flow hedging instruments: Total gain (loss) reclassified from other comprehensive income (loss) 2,473 (18 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
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 March 30, 2019 (in thousands): Fair Value at March 30, 2019 Level 1 Level 2 Level 3 Total Assets: Forward contracts $ — $ 9,387 $ — $ 9,387 Deferred compensation plan assets: Investment in publicly traded mutual funds 4,850 — — 4,850 Total $ 4,850 $ 9,387 $ — $ 14,237 Liabilities: Contingent consideration $ — $ — $ 1,600 $ 1,600 Forward contracts — 920 — 920 Total $ — $ 920 $ 1,600 $ 2,520 The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 29, 2018 (in thousands): Fair Value at December 29, 2018 Level 1 Level 2 Level 3 Total Assets: Forward contracts $ — $ 9,685 $ — $ 9,685 Deferred compensation plan assets: Investment in publicly traded mutual funds 4,442 — — 4,442 Total $ 4,442 $ 9,685 $ — $ 14,127 Liabilities: Contingent consideration $ — $ — $ 2,174 $ 2,174 Forward contracts — 730 — 730 Total $ — $ 730 $ 2,174 $ 2,904 |
INTANGIBLE AND OTHER ASSETS (Ta
INTANGIBLE AND OTHER ASSETS (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
INTANGIBLE AND OTHER ASSETS | |
Schedule of intangible and other assets-net | The following table summarizes intangible and other assets (in thousands): March 30, 2019 December 29, 2018 Useful Gross Accumulated Gross Accumulated Lives Amount Amortization Amount Amortization Intangibles-subject to amortization: Trademarks 10 yrs. $ 4,293 $ 3,902 $ 4,293 $ 3,859 Customer lists 5-10 yrs. 52,471 39,431 52,635 38,028 Patents 3-20 yrs. 2,310 2,162 2,310 2,154 Developed technology 7 yrs. 2,193 137 36,100 15,471 Other 7-20 yrs. 259 248 261 247 Total intangibles-subject to amortization 61,526 45,880 95,599 59,759 Intangibles-not subject to amortization: Trade names 32,422 32,427 Other assets: Other deposits 17,769 19,641 Deferred compensation plan assets 4,850 4,442 Deferred tax asset-net 28,407 23,695 Restricted cash 7,623 7,479 Tax receivable 7,060 7,060 Forward contracts 350 453 Investments 500 500 Other 2,089 1,889 Total other assets 68,648 65,159 Total intangible and other assets $ 162,596 $ 45,880 $ 193,185 $ 59,759 Total intangible and other assets-net $ 116,716 $ 133,426 |
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): Fiscal Year Amortization Expense 2019 (remaining) $ 5,115 2020 $ 6,309 2021 $ 2,483 2022 $ 1,629 2023 $ 59 2024 $ 51 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Leases [Abstract] | |
Components of leases | The components of lease expense were as follows (in thousands): Lease Cost Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location For the 13 Weeks Ended March 30, 2019 Operating lease cost (1) SG&A $ 30,858 Finance lease cost: Amortization of right-of-use assets SG&A $ 448 Interest on lease liabilities Interest expense $ 9 Short-term lease cost SG&A $ 1,700 Variable lease cost SG&A $ 6,116 _______________________________________________ (1) Includes sublease income, which is immaterial. The following table discloses supplemental balance sheet information for the Company’s leases (in thousands): Leases Condensed Consolidated Balance Sheets Location March 30, 2019 Assets Operating Operating lease right-of-use assets $ 311,953 Finance Property, plant and equipment - net of accumulated depreciation of $4,013 $ 5,905 Liabilities Current: Operating Current operating lease liabilities $ 69,172 Finance Short-term and current portion of long-term debt $ 967 Noncurrent: Operating Long-term operating lease liabilities $ 311,618 Finance Long-term debt $ 2,193 The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company's leases: Lease Term and Discount Rate March 30, 2019 Weighted-average remaining lease term: Operating leases 6.4 years Finance leases 3.0 years Weighted-average discount rate: Operating leases 13.9 % Finance leases 1.2 % |
Maturity of lease liabilities | Future minimum lease payments by year as of March 30, 2019 were as follows (in thousands): Fiscal Year Operating Leases Finance Leases 2019 (remaining) $ 93,793 $ 753 2020 105,909 987 2021 84,900 985 2022 73,920 492 2023 61,845 — 2024 42,593 — Thereafter 144,044 — Total lease payments $ 607,004 $ 3,217 Less: Interest 226,214 57 Total lease obligations $ 380,790 $ 3,160 |
Maturity of lease liabilities | Future minimum lease payments by year as of March 30, 2019 were as follows (in thousands): Fiscal Year Operating Leases Finance Leases 2019 (remaining) $ 93,793 $ 753 2020 105,909 987 2021 84,900 985 2022 73,920 492 2023 61,845 — 2024 42,593 — Thereafter 144,044 — Total lease payments $ 607,004 $ 3,217 Less: Interest 226,214 57 Total lease obligations $ 380,790 $ 3,160 |
Maturity of lease liabilities, prior year | Future minimum lease payments by year as of December 29, 2018 were as follows (in thousands): Fiscal Year Operating Leases Finance Leases 2019 $ 135,025 $ 951 2020 105,668 947 2021 84,230 947 2022 73,928 696 2023 61,710 — Thereafter 186,201 — Total lease payments $ 646,762 $ 3,541 Less: Interest 84 Finance lease obligations $ 3,457 |
Maturity of lease liabilities, prior year | Future minimum lease payments by year as of December 29, 2018 were as follows (in thousands): Fiscal Year Operating Leases Finance Leases 2019 $ 135,025 $ 951 2020 105,668 947 2021 84,230 947 2022 73,928 696 2023 61,710 — Thereafter 186,201 — Total lease payments $ 646,762 $ 3,541 Less: Interest 84 Finance lease obligations $ 3,457 |
Supplemental cash flow information | Supplemental cash flow information related to leases was as follows (in thousands): For the 13 Weeks Ended March 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20,092 Operating cash flows from finance leases 9 Financing cash flows from finance leases 236 Leased assets obtained in exchange for new operating lease liabilities 5,148 |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Rollforward of liability incurred on restructuring plan | The following table shows a rollforward of the accrued liability related to the Company’s NWF 1.0 restructuring plan (in thousands): For the 13 Weeks Ended March 30, 2019 Liabilities Liabilities December 29, 2018 Charges Cash Payments Non-cash Items March 30, 2019 Store closures $ 2,818 $ 2,664 $ 482 $ 1,953 $ 3,047 Professional services 2,198 485 819 — 1,864 Severance and employee-related benefits 3,011 6,197 3,013 2,283 3,912 Total $ 8,027 $ 9,346 $ 4,314 $ 4,236 $ 8,823 For the 13 Weeks Ended March 31, 2018 Liabilities Liabilities December 30, 2017 Charges Cash Payments Non-cash Items March 31, 2018 Store closures $ 2,973 $ 8,556 $ 5,413 $ 1,711 $ 4,405 Professional services 185 1,158 645 — 698 Severance and employee-related benefits 1,317 11,604 4,128 5,458 3,335 Total $ 4,475 $ 21,318 $ 10,186 $ 7,169 $ 8,438 |
Schedule of restructuring charges by operating segment | NWF 1.0 restructuring charges by operating segment were as follows (in thousands): For the 13 Weeks Ended March 30, 2019 For the 13 Weeks Ended March 31, 2018 Americas $ 2,662 $ 8,124 Europe 1,234 3,367 Asia 547 695 Corporate 4,903 9,132 Consolidated $ 9,346 $ 21,318 |
FINANCIAL STATEMENT POLICIES (E
FINANCIAL STATEMENT POLICIES (Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income (loss) attributable to Fossil Group, Inc. | $ (12,242) | $ (48,273) |
Denominator: | ||
Basic weighted average common shares outstanding (in shares) | 49,618 | 48,712 |
Basic EPS (in dollars per share) | $ (0.25) | $ (0.99) |
Diluted EPS computation: | ||
Basic weighted average common shares outstanding (in shares) | 49,618 | 48,712 |
Diluted weighted average common shares outstanding (in shares) | 49,618 | 48,712 |
Diluted EPS (in dollars per share) | $ (0.25) | $ (0.99) |
Stock Compensation Plan | ||
Diluted EPS computation: | ||
Weighted shares issuable under stock-based awards not included in the diluted EPS calculation (in shares) | 4,400 | 4,800 |
Performance Shares | ||
Diluted EPS computation: | ||
Weighted shares issuable under stock-based awards not included in the diluted EPS calculation (in shares) | 1,100 | 1,200 |
FINANCIAL STATEMENT POLICIES (S
FINANCIAL STATEMENT POLICIES (Schedule Of Cash And Restricted Cash Equivalents) (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 | Mar. 31, 2018 | Dec. 30, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 271,442 | $ 403,373 | $ 229,863 | |
Restricted cash included in prepaid expenses and other current assets | 31 | 33 | ||
Restricted cash included in intangible and other assets-net | 7,623 | 1,863 | ||
Cash, cash equivalents and restricted cash | $ 279,096 | $ 410,883 | $ 231,759 | $ 231,655 |
FINANCIAL STATEMENT POLICIES (R
FINANCIAL STATEMENT POLICIES (Recently Adopted Accounting Standards) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 30, 2019 | Dec. 30, 2018 | Dec. 29, 2018 | Dec. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 311,953 | $ 0 | ||
Store impairment | 43,000 | |||
Lease liabilities | $ 380,790 | |||
Adoption of Accounting Standards Update (ASU) 2014-09 | (29,468) | $ (26,542) | ||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease right-of-use assets | $ 327,300 | 370,300 | ||
Lease liabilities | $ 390,600 | |||
Retained earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Adoption of Accounting Standards Update (ASU) 2014-09 | $ (29,468) | $ (26,542) |
REVENUE (Disaggregation Of Reve
REVENUE (Disaggregation Of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 465,268 | $ 569,156 |
Watches | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 366,178 | 447,615 |
Leathers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 53,905 | 69,259 |
Jewelry | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 31,160 | 41,806 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 14,025 | 10,476 |
Revenue recognized at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 460,497 | 568,372 |
Revenue recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,771 | 784 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 190,369 | 249,067 |
Americas | Watches | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 148,316 | 195,677 |
Americas | Leathers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 30,752 | 38,330 |
Americas | Jewelry | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 9,176 | 12,024 |
Americas | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,125 | 3,036 |
Americas | Revenue recognized at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 189,701 | 248,610 |
Americas | Revenue recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 668 | 457 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 153,277 | 201,788 |
Europe | Watches | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 116,253 | 150,795 |
Europe | Leathers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 11,358 | 18,038 |
Europe | Jewelry | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 20,750 | 28,508 |
Europe | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,916 | 4,447 |
Europe | Revenue recognized at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 152,916 | 201,564 |
Europe | Revenue recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 361 | 224 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 116,900 | 117,861 |
Asia | Watches | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 101,606 | 101,143 |
Asia | Leathers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 11,795 | 12,891 |
Asia | Jewelry | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,234 | 1,274 |
Asia | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,265 | 2,553 |
Asia | Revenue recognized at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 116,708 | 117,758 |
Asia | Revenue recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 192 | 103 |
Corporate | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,722 | 440 |
Corporate | Watches | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 3 | 0 |
Corporate | Leathers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
Corporate | Jewelry | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
Corporate | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,719 | 440 |
Corporate | Revenue recognized at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,172 | 440 |
Corporate | Revenue recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 3,550 | $ 0 |
REVENUE (Narrative) (Details)
REVENUE (Narrative) (Details) - USD ($) | Mar. 30, 2019 | Dec. 29, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract assets | $ 0 | |
Deferred contract costs | 0 | |
Licensing Income | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | 20,700,000 | $ 21,800,000 |
Wearable Technology | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | 5,800,000 | 6,200,000 |
Gift Cards | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | $ 3,600,000 | $ 3,800,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Inventory Disclosure [Abstract] | ||
Components and parts | $ 30,190 | $ 28,183 |
Work-in-process | 6,100 | 9,458 |
Finished goods | 347,779 | 339,981 |
Inventories | $ 384,069 | $ 377,622 |
WARRANTY LIABILITIES (Details)
WARRANTY LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Warranty liability activity [Roll Forward] | ||
Beginning balance | $ 22,807 | $ 19,405 |
Settlements in cash or kind | (4,125) | (3,008) |
Warranties issued and adjustments to preexisting warranties | 3,384 | 3,777 |
Ending balance | $ 22,066 | $ 20,174 |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Expense and Related Effective Rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) expense | $ 9,608 | $ 6,645 |
Effective tax rate | (446.10%) | (16.30%) |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) $ in Millions | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits | $ 39.7 |
Unrecognized tax benefits, excluding interest and penalties, that are expected to be settled within the next 12 months | 17.8 |
Accrued income-tax related interest and penalties | 4.7 |
Accrued income tax penalties | 1 |
Income-tax related interest expense | $ 1 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | ||
Authorizations remaining | $ 30,000 | |
Payments to noncontrolling interests | 947 | $ 1,547 |
Present value of purchase price | 1,600 | |
Variable consideration in accrued expenses | 700 | |
Variable consideration in other long-term liabilities | $ 900 |
EMPLOYEE BENEFIT PLANS (Summary
EMPLOYEE BENEFIT PLANS (Summary of Stock Options and Stock Appreciation Rights Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 30, 2019 | Dec. 29, 2018 | |
Shares | ||
Outstanding at beginning of period (in shares) | 1,930 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (12) | |
Forfeited or expired (in shares) | (883) | |
Outstanding at end of period (in shares) | 1,035 | 1,930 |
Exercisable at end of period (in shares) | 1,019 | |
Weighted- Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 49.25 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 13.65 | |
Forfeited or expired (in dollars per share) | 37.21 | |
Outstanding at end of period (in dollars per share) | 59.95 | $ 49.25 |
Exercisable at end of period (in dollars per share) | $ 60.43 | |
Weighted- Average Remaining Contractual Term | ||
Outstanding | 2 years | 1 year 3 months 19 days |
Exercisable at end of period | 1 year 10 months 25 days | |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value outstanding | $ 0 | $ 37 |
Exercised | 18 | |
Exercisable at end of period | $ 0 |
EMPLOYEE BENEFIT PLANS (Summa_2
EMPLOYEE BENEFIT PLANS (Summary of Stock Options and Stock Appreciation Rights Outstanding and Exercisable) (Details) shares in Thousands | 3 Months Ended |
Mar. 30, 2019$ / sharesshares | |
Stock options | |
Stock-based compensation plans disclosures | |
Stock options outstanding, number of shares (in shares) | shares | 223 |
Stock options outstanding, weighted- average exercise price (in dollars per share) | $ 96.08 |
Stock options outstanding, weighted- average remaining contractual term | 2 years |
Stock options exercisable, number of shares (in shares) | shares | 223 |
Stock options exercisable, weighted- average exercise price (in dollars per share) | $ 96.08 |
Stock appreciation rights | |
Stock-based compensation plans disclosures | |
Equity instruments other than options outstanding, number of shares (in shares) | shares | 792 |
Equity instruments other than options outstanding, weighted- average exercise price (in dollars per share) | $ 50.39 |
Equity instruments other than options outstanding, weighted- average remaining contractual term | 2 years |
Equity instruments other than options exercisable, number of shares (in shares) | shares | 776 |
Equity instruments other than options exercisable, weighted- average exercise price (in dollars per share) | $ 50.82 |
$29.49 - $47.99 | Stock options | |
Stock-based compensation plans disclosures | |
Stock options outstanding, lower range (in dollars per share) | 29.49 |
Stock options outstanding, upper range (in dollars per share) | $ 47.99 |
Stock options outstanding, number of shares (in shares) | shares | 40 |
Stock options outstanding, weighted- average exercise price (in dollars per share) | $ 38.40 |
Stock options outstanding, weighted- average remaining contractual term | 9 months 18 days |
Stock options exercisable, number of shares (in shares) | shares | 40 |
Stock options exercisable, weighted- average exercise price (in dollars per share) | $ 38.40 |
$29.49 - $47.99 | Stock appreciation rights | |
Stock-based compensation plans disclosures | |
Equity instruments other than options outstanding, lower range (in dollars per share) | 29.49 |
Equity instruments other than options outstanding, upper range (in dollars per share) | $ 47.99 |
Equity instruments other than options outstanding, number of shares (in shares) | shares | 625 |
Equity instruments other than options outstanding, weighted- average exercise price (in dollars per share) | $ 38.91 |
Equity instruments other than options outstanding, weighted- average remaining contractual term | 1 year 9 months 18 days |
Equity instruments other than options exercisable, number of shares (in shares) | shares | 609 |
Equity instruments other than options exercisable, weighted- average exercise price (in dollars per share) | $ 39.16 |
$55.04 - $83.83 | Cash Stock Appreciation Rights | |
Stock-based compensation plans disclosures | |
Equity instruments other than options outstanding, number of shares (in shares) | shares | 20 |
Equity instruments other than options outstanding, weighted- average exercise price (in dollars per share) | $ 36.73 |
Equity instruments other than options outstanding, weighted- average remaining contractual term | 2 months 12 days |
Equity instruments other than options exercisable, number of shares (in shares) | shares | 20 |
Equity instruments other than options exercisable, weighted- average exercise price (in dollars per share) | $ 36.73 |
$55.04 - $83.83 | Stock options | |
Stock-based compensation plans disclosures | |
Stock options outstanding, lower range (in dollars per share) | 55.04 |
Stock options outstanding, upper range (in dollars per share) | $ 83.83 |
Stock options outstanding, number of shares (in shares) | shares | 76 |
Stock options outstanding, weighted- average exercise price (in dollars per share) | $ 81.37 |
Stock options outstanding, weighted- average remaining contractual term | 1 year 9 months 18 days |
Stock options exercisable, number of shares (in shares) | shares | 76 |
Stock options exercisable, weighted- average exercise price (in dollars per share) | $ 81.37 |
$55.04 - $83.83 | Stock appreciation rights | |
Stock-based compensation plans disclosures | |
Equity instruments other than options outstanding, lower range (in dollars per share) | 55.04 |
Equity instruments other than options outstanding, upper range (in dollars per share) | $ 83.83 |
Equity instruments other than options outstanding, number of shares (in shares) | shares | 96 |
Equity instruments other than options outstanding, weighted- average exercise price (in dollars per share) | $ 78.68 |
Equity instruments other than options outstanding, weighted- average remaining contractual term | 3 years 6 months |
Equity instruments other than options exercisable, number of shares (in shares) | shares | 96 |
Equity instruments other than options exercisable, weighted- average exercise price (in dollars per share) | $ 78.68 |
$95.91 - $131.46 | Stock options | |
Stock-based compensation plans disclosures | |
Stock options outstanding, lower range (in dollars per share) | 95.91 |
Stock options outstanding, upper range (in dollars per share) | $ 131.46 |
Stock options outstanding, number of shares (in shares) | shares | 107 |
Stock options outstanding, weighted- average exercise price (in dollars per share) | $ 128 |
Stock options outstanding, weighted- average remaining contractual term | 2 years 8 months 12 days |
Stock options exercisable, number of shares (in shares) | shares | 107 |
Stock options exercisable, weighted- average exercise price (in dollars per share) | $ 128 |
$95.91 - $131.46 | Stock appreciation rights | |
Stock-based compensation plans disclosures | |
Equity instruments other than options outstanding, lower range (in dollars per share) | 95.91 |
Equity instruments other than options outstanding, upper range (in dollars per share) | $ 131.46 |
Equity instruments other than options outstanding, number of shares (in shares) | shares | 71 |
Equity instruments other than options outstanding, weighted- average exercise price (in dollars per share) | $ 113.13 |
Equity instruments other than options outstanding, weighted- average remaining contractual term | 2 years 3 months 19 days |
Equity instruments other than options exercisable, number of shares (in shares) | shares | 71 |
Equity instruments other than options exercisable, weighted- average exercise price (in dollars per share) | $ 113.13 |
EMPLOYEE BENEFIT PLANS (Summa_3
EMPLOYEE BENEFIT PLANS (Summary of Restricted Stock Units and Performance Restricted Stock Units Activity) (Details) - Restricted Stock Units (RSUs) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended |
Mar. 30, 2019USD ($)$ / sharesshares | |
Number of Shares | |
Nonvested at beginning of period (in shares) | shares | 3,011 |
Granted (in shares) | shares | 2 |
Vested (in shares) | shares | (343) |
Forfeited (in shares) | shares | (192) |
Nonvested at end of period (in shares) | shares | 2,478 |
Weighted-Average Grant Date Fair Value Per Share | |
Nonvested at beginning of period (in dollars per share) | $ / shares | $ 17.86 |
Granted (in dollars per share) | $ / shares | 17.13 |
Vested (in dollars per share) | $ / shares | 21.56 |
Forfeited (in dollars per share) | $ / shares | 29.14 |
Nonvested at end of period (in dollars per share) | $ / shares | $ 16.48 |
Fair value of restricted stock and restricted stock units vested | $ | $ 5.4 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | $ 588,631 | $ 580,947 |
Other comprehensive income (loss) before reclassifications | (781) | 3,989 |
Tax (expense) benefit | (263) | 2,137 |
Amounts reclassed from accumulated other comprehensive income (loss) | 2,655 | (5,956) |
Tax (expense) benefit | (200) | 938 |
Total other comprehensive income (loss) | (3,499) | 11,144 |
Ending balance | 549,226 | 526,555 |
Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | (74,868) | (64,499) |
Other comprehensive income (loss) before reclassifications | (2,490) | 12,301 |
Tax (expense) benefit | 0 | 0 |
Amounts reclassed from accumulated other comprehensive income (loss) | 0 | 0 |
Tax (expense) benefit | 0 | 0 |
Total other comprehensive income (loss) | (2,490) | 12,301 |
Ending balance | (77,358) | (52,198) |
Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 8,582 | (10,098) |
Other comprehensive income (loss) before reclassifications | 1,709 | (8,312) |
Tax (expense) benefit | (263) | 2,137 |
Amounts reclassed from accumulated other comprehensive income (loss) | 2,655 | (5,956) |
Tax (expense) benefit | (200) | 938 |
Total other comprehensive income (loss) | (1,009) | (1,157) |
Ending balance | 7,573 | (11,255) |
Pension Plan | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | 1,595 | (1,672) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Tax (expense) benefit | 0 | 0 |
Amounts reclassed from accumulated other comprehensive income (loss) | 0 | 0 |
Tax (expense) benefit | 0 | 0 |
Total other comprehensive income (loss) | 0 | 0 |
Ending balance | 1,595 | (1,672) |
Total | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | ||
Beginning balance | (64,691) | (76,269) |
Total other comprehensive income (loss) | (3,499) | 11,144 |
Ending balance | $ (68,190) | $ (65,125) |
SEGMENT INFORMATION (Summary In
SEGMENT INFORMATION (Summary Information by Operating Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | |
Summary information by operating segment | |||
Net sales | $ 465,268 | $ 569,156 | |
Operating Income (Loss) | (19,944) | (28,281) | |
Long-Term Assets | 601,376 | $ 316,629 | |
Total Assets | 1,589,891 | 1,575,198 | |
Americas | |||
Summary information by operating segment | |||
Net sales | 190,369 | 249,067 | |
Europe | |||
Summary information by operating segment | |||
Net sales | 153,277 | 201,788 | |
Asia | |||
Summary information by operating segment | |||
Net sales | 116,900 | 117,861 | |
Operating segments | Americas | |||
Summary information by operating segment | |||
Net sales | 190,369 | 249,067 | |
Operating Income (Loss) | 10,918 | 18,078 | |
Long-Term Assets | 195,421 | 61,914 | |
Total Assets | 479,486 | 393,273 | |
Operating segments | Europe | |||
Summary information by operating segment | |||
Net sales | 153,277 | 201,788 | |
Operating Income (Loss) | 14,280 | 26,010 | |
Long-Term Assets | 180,295 | 99,253 | |
Total Assets | 371,852 | 353,797 | |
Operating segments | Asia | |||
Summary information by operating segment | |||
Net sales | 116,900 | 117,861 | |
Operating Income (Loss) | 21,041 | 13,267 | |
Long-Term Assets | 75,914 | 29,990 | |
Total Assets | 213,414 | 173,666 | |
Corporate | |||
Summary information by operating segment | |||
Net sales | 4,722 | 440 | |
Operating Income (Loss) | (66,183) | $ (85,636) | |
Long-Term Assets | 149,746 | 125,472 | |
Total Assets | $ 525,139 | $ 654,462 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Net Sales for Each Class of Similar Products) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Net sales for each class of similar products | ||
Net sales | $ 465,268 | $ 569,156 |
Percentage of Total | 100.00% | 100.00% |
Watches | ||
Net sales for each class of similar products | ||
Net sales | $ 366,178 | $ 447,615 |
Percentage of Total | 78.70% | 78.70% |
Leathers | ||
Net sales for each class of similar products | ||
Net sales | $ 53,905 | $ 69,259 |
Percentage of Total | 11.60% | 12.20% |
Jewelry | ||
Net sales for each class of similar products | ||
Net sales | $ 31,160 | $ 41,806 |
Percentage of Total | 6.70% | 7.30% |
Other | ||
Net sales for each class of similar products | ||
Net sales | $ 14,025 | $ 10,476 |
Percentage of Total | 3.00% | 1.80% |
DERIVATIVES AND RISK MANAGEME_3
DERIVATIVES AND RISK MANAGEMENT (Cash Flow Hedges) (Details) $ in Thousands, € in Millions, ¥ in Millions, £ in Millions, $ in Millions, $ in Millions, $ in Millions | 3 Months Ended | ||||||||
Mar. 30, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 30, 2019EUR (€) | Mar. 30, 2019USD ($) | Mar. 30, 2019GBP (£) | Mar. 30, 2019AUD ($) | Mar. 30, 2019MXN ($) | Mar. 30, 2019CAD ($) | Mar. 30, 2019JPY (¥) | |
Derivative [Line Items] | |||||||||
Foreign currency cash flow hedge maximum length of projection term | 24 months | ||||||||
Forecasted purchases to manage fluctuations (up to) | 85.00% | 85.00% | 85.00% | 85.00% | 85.00% | 85.00% | 85.00% | ||
Hedges resulted in ineffectiveness | $ 0 | $ 0 | |||||||
Gain (loss) reclassified into earnings | (12,242) | (48,273) | |||||||
Forward Contracts | Designated as cash flow hedges | Euro | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | € 146 | $ 173,900 | |||||||
Forward Contracts | Designated as cash flow hedges | Canadian dollar | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | 44,600 | $ 58.3 | |||||||
Forward Contracts | Designated as cash flow hedges | British pound | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | 30,400 | £ 22.9 | |||||||
Forward Contracts | Designated as cash flow hedges | Japanese yen | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | 19,200 | ¥ 2,076.3 | |||||||
Forward Contracts | Designated as cash flow hedges | Mexican peso | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | 19,600 | $ 391.9 | |||||||
Forward Contracts | Designated as cash flow hedges | Australian dollar | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | 9,600 | $ 13.5 | |||||||
Forward Contracts | Designated as cash flow hedges | U.S. dollar | |||||||||
Derivative [Line Items] | |||||||||
Notional amount | $ 27,200 | ¥ 2,950 | |||||||
Cash Flow Hedges | Amount Reclassified from AOCI | |||||||||
Derivative [Line Items] | |||||||||
Gain (loss) reclassified into earnings | $ 0 | $ 0 |
DERIVATIVES AND RISK MANAGEME_4
DERIVATIVES AND RISK MANAGEMENT (Non-designated Hedges) (Details) - Mar. 30, 2019 - 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 13.3 |
DERIVATIVES AND RISK MANAGEME_5
DERIVATIVES AND RISK MANAGEMENT (Derivative Instruments Recognized in OCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Derivative [Line Items] | ||
Total gain (loss) recognized in other comprehensive income (loss), net of taxes | $ 1,446 | $ (6,175) |
Cash flow hedges | Forward Contracts | ||
Derivative [Line Items] | ||
Total gain (loss) recognized in other comprehensive income (loss), net of taxes | $ 1,446 | $ (6,175) |
DERIVATIVES AND RISK MANAGEME_6
DERIVATIVES AND RISK MANAGEMENT (Derivative Instruments Designated and Qualifying as Cash Flow Hedges) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Cost of sales | Forward Contracts | Designated as cash flow hedges | Cash flow hedges | ||
Effective portion of gains and losses on derivative instruments | ||
Total gain (loss) reclassified from accumulated other comprehensive income (loss) | $ 2,473 | $ 0 |
Other income (expense)-net | Forward Contracts | Designated as cash flow hedges | Cash flow hedges | ||
Effective portion of gains and losses on derivative instruments | ||
Total gain (loss) reclassified from accumulated other comprehensive income (loss) | (18) | (5,018) |
Other income (expense)-net | Forward Contracts | Not designated as hedging instruments | ||
Effective portion of gains and losses on derivative instruments | ||
Total gain (loss) recognized in income | (13) | 343 |
Other income (expense)-net | Interest Rate Swaps | Not designated as hedging instruments | ||
Effective portion of gains and losses on derivative instruments | ||
Total gain (loss) recognized in income | $ 0 | $ 68 |
DERIVATIVES AND RISK MANAGEME_7
DERIVATIVES AND RISK MANAGEMENT (Fair Value Amounts for Derivative Instruments) (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Fair value of derivative instruments | ||
Asset derivatives, fair value | $ 9,387 | $ 9,685 |
Liability derivatives, fair value | 920 | 730 |
Net gain expected to be reclassified into earnings within the next twelve months | 7,400 | |
Forward Contracts | Designated as cash flow hedges | Cash flow hedges | Prepaid expenses and other current assets | ||
Fair value of derivative instruments | ||
Asset derivatives, fair value | 9,013 | 9,217 |
Forward Contracts | Designated as cash flow hedges | Cash flow hedges | Intangible and other assets-net | ||
Fair value of derivative instruments | ||
Asset derivatives, fair value | 350 | 453 |
Forward Contracts | Designated as cash flow hedges | Cash flow hedges | Accrued expenses- other | ||
Fair value of derivative instruments | ||
Liability derivatives, fair value | 796 | 660 |
Forward Contracts | Designated as cash flow hedges | Cash flow hedges | Other long-term liabilities | ||
Fair value of derivative instruments | ||
Liability derivatives, fair value | 124 | 70 |
Forward Contracts | Not designated as hedging instruments | Prepaid expenses and other current assets | ||
Fair value of derivative instruments | ||
Asset derivatives, fair value | 24 | 15 |
Forward Contracts | Not designated as hedging instruments | Accrued expenses- other | ||
Fair value of derivative instruments | ||
Liability derivatives, fair value | $ 0 | $ 0 |
DERIVATIVES AND RISK MANAGEME_8
DERIVATIVES AND RISK MANAGEMENT (Effect of Derivative Instruments on Earnings) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Derivative [Line Items] | ||
Cost of sales | $ 217,341 | $ 281,465 |
Other income (expense) - net | 25,912 | $ (1,888) |
Cash flow hedges | Cost of sales | Forward contracts | ||
Derivative [Line Items] | ||
Total gain (loss) reclassified from accumulated other comprehensive income (loss) | 2,473 | |
Cash flow hedges | Other income (expense)-net | Forward contracts | ||
Derivative [Line Items] | ||
Total gain (loss) reclassified from accumulated other comprehensive income (loss) | $ (18) |
FAIR VALUE MEASUREMENTS (Fair V
FAIR VALUE MEASUREMENTS (Fair Value Hierarchy of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Assets: | ||
Forward contracts | $ 9,387 | $ 9,685 |
Investment in publicly traded mutual funds | 4,850 | 4,442 |
Total | 14,237 | 14,127 |
Liabilities: | ||
Contingent consideration | 1,600 | 2,174 |
Forward contracts | 920 | 730 |
Total | 2,520 | 2,904 |
Level 1 | ||
Assets: | ||
Forward contracts | 0 | 0 |
Investment in publicly traded mutual funds | 4,850 | 4,442 |
Total | 4,850 | 4,442 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Forward contracts | 0 | 0 |
Total | 0 | 0 |
Level 2 | ||
Assets: | ||
Forward contracts | 9,387 | 9,685 |
Investment in publicly traded mutual funds | 0 | 0 |
Total | 9,387 | 9,685 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Forward contracts | 920 | 730 |
Total | 920 | 730 |
Level 3 | ||
Assets: | ||
Forward contracts | 0 | 0 |
Investment in publicly traded mutual funds | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Contingent consideration | 1,600 | 2,174 |
Forward contracts | 0 | 0 |
Total | $ 1,600 | $ 2,174 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | |
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Operating lease right-of-use assets | $ 311,953 | $ 0 | |
Property, plant and equipment - net | 172,707 | 183,203 | |
Impairment of property, plant, and equipment | 880 | $ 81 | |
Contingent consideration | 1,600 | 2,174 | |
Level 3 | |||
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Impairment of property, plant, and equipment | 2,200 | ||
Contingent consideration | 1,600 | $ 2,174 | |
Specific Company Owned Stores | |||
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Operating lease right-of-use assets | 4,300 | ||
Property, plant and equipment - net | 500 | ||
Operating lease assets, fair value | 2,300 | ||
Fair value write-down | 300 | ||
Selling, General and Administrative | Europe | Level 3 | |||
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Impairment of property, plant, and equipment | 800 | ||
Restructuring Charges | Americas | Level 3 | |||
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Impairment of property, plant, and equipment | 1,300 | ||
Restructuring Charges | Europe | Level 3 | |||
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Impairment of property, plant, and equipment | 100 | ||
Carrying Value | |||
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Debt, fair value | 230,600 | ||
Estimate of Fair Value Measurement | |||
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Debt, fair value | $ 230,200 | ||
Discount rate | Level 3 | Contingent Consideration | |||
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | |||
Discount rate | 13.00% |
INTANGIBLE AND OTHER ASSETS (In
INTANGIBLE AND OTHER ASSETS (Intangible and Other Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Dec. 29, 2018 | |
Intangibles-subject to amortization: | ||
Gross Amount | $ 61,526 | $ 95,599 |
Accumulated Amortization | 45,880 | 59,759 |
Intangibles-not subject to amortization: | ||
Trade names | 32,422 | 32,427 |
Other assets: | ||
Gross Amount | 68,648 | 65,159 |
Accumulated Amortization | ||
Gross Amount | 162,596 | 193,185 |
Accumulated Amortization | 45,880 | 59,759 |
Total intangible and other assets-net | 116,716 | 133,426 |
Other deposits | ||
Other assets: | ||
Gross Amount | 17,769 | 19,641 |
Accumulated Amortization | ||
Deferred compensation plan assets | ||
Other assets: | ||
Gross Amount | 4,850 | 4,442 |
Deferred tax asset-net | ||
Other assets: | ||
Gross Amount | 28,407 | 23,695 |
Restricted cash | ||
Other assets: | ||
Gross Amount | 7,623 | 7,479 |
Tax receivable | ||
Other assets: | ||
Gross Amount | 7,060 | 7,060 |
Forward contracts | ||
Other assets: | ||
Gross Amount | 350 | 453 |
Investments | ||
Other assets: | ||
Gross Amount | 500 | 500 |
Other | ||
Other assets: | ||
Gross Amount | $ 2,089 | 1,889 |
Trademarks | ||
Intangibles-subject to amortization: | ||
Useful Lives | 10 years | |
Gross Amount | $ 4,293 | 4,293 |
Accumulated Amortization | 3,902 | 3,859 |
Customer lists | ||
Intangibles-subject to amortization: | ||
Gross Amount | 52,471 | 52,635 |
Accumulated Amortization | $ 39,431 | 38,028 |
Customer lists | Minimum | ||
Intangibles-subject to amortization: | ||
Useful Lives | 5 years | |
Customer lists | Maximum | ||
Intangibles-subject to amortization: | ||
Useful Lives | 10 years | |
Patents | ||
Intangibles-subject to amortization: | ||
Gross Amount | $ 2,310 | 2,310 |
Accumulated Amortization | $ 2,162 | 2,154 |
Patents | Minimum | ||
Intangibles-subject to amortization: | ||
Useful Lives | 3 years | |
Patents | Maximum | ||
Intangibles-subject to amortization: | ||
Useful Lives | 20 years | |
Developed technology | ||
Intangibles-subject to amortization: | ||
Useful Lives | 7 years | |
Gross Amount | $ 2,193 | 36,100 |
Accumulated Amortization | 137 | 15,471 |
Other | ||
Intangibles-subject to amortization: | ||
Gross Amount | 259 | 261 |
Accumulated Amortization | $ 248 | $ 247 |
Other | Minimum | ||
Intangibles-subject to amortization: | ||
Useful Lives | 7 years | |
Other | Maximum | ||
Intangibles-subject to amortization: | ||
Useful Lives | 20 years |
INTANGIBLE AND OTHER ASSETS (Am
INTANGIBLE AND OTHER ASSETS (Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
INTANGIBLE AND OTHER ASSETS | ||
Amortization expense for intangible assets | $ 1,700 | $ 3,000 |
Estimated aggregate future amortization expense by fiscal year | ||
2019 (remaining) | 5,115 | |
2020 | 6,309 | |
2021 | 2,483 | |
2022 | 1,629 | |
2023 | 59 | |
2024 | $ 51 |
INTANGIBLE AND OTHER ASSETS (Na
INTANGIBLE AND OTHER ASSETS (Narrative) (Details) - Google Inc $ in Millions | Jan. 16, 2019USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Cash purchase of intangible assets | $ 40 |
Reduction to intangible assets | 18.4 |
Gain on sale of intellectual property | $ 21.6 |
LEASES (Components of Lease Exp
LEASES (Components of Lease Expense) (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost(1) | $ 30,858 |
Finance lease cost: | |
Amortization of right-of-use assets | 448 |
Interest on lease liabilities | 9 |
Short-term lease cost | 1,700 |
Variable lease cost | $ 6,116 |
LEASES (Supplemental Balance Sh
LEASES (Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Assets | ||
Operating lease right-of-use assets | $ 311,953 | $ 0 |
Finance lease assets, property, plant and equipment - net of accumulated depreciation of $4,013 | 5,905 | |
Accumulated depreciation | 4,103 | |
Current: | ||
Short-term operating lease liabilities | 69,172 | 0 |
Short-term and current portion of long-term debt | 967 | |
Noncurrent: | ||
Long-term operating lease liabilities | 311,618 | $ 0 |
Long-term debt | $ 2,193 |
LEASES (Weighted-Average Remain
LEASES (Weighted-Average Remaining Lease Term and Discount Rate) (Details) | Mar. 30, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term, Operating leases | 6 years 4 months 24 days |
Weighed-average remaining lease term, Finance leases | 3 years |
Weighted-average discount rate, Operating leases | 13.90% |
Weighted-average discount rate, Finance leases | 1.20% |
LEASES (Maturity of Lease Liabi
LEASES (Maturity of Lease Liabilities) (Details) $ in Thousands | Mar. 30, 2019USD ($) |
Operating Leases | |
2019 (remaining) | $ 93,793 |
2020 | 105,909 |
2021 | 84,900 |
2022 | 73,920 |
2023 | 61,845 |
2024 | 42,593 |
Thereafter | 144,044 |
Total lease payments | 607,004 |
Less: Interest | 226,214 |
Total lease obligations | 380,790 |
Finance Leases | |
2019 (remaining) | 753 |
2020 | 987 |
2021 | 985 |
2022 | 492 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total lease payments | 3,217 |
Less: Interest | 57 |
Total lease obligations | $ 3,160 |
LEASES (Maturity of Lease Lia_2
LEASES (Maturity of Lease Liabilities, Prior Year) (Details) $ in Thousands | Dec. 29, 2018USD ($) |
Operating Leases | |
2019 | $ 135,025 |
2020 | 105,668 |
2021 | 84,230 |
2022 | 73,928 |
2023 | 61,710 |
Thereafter | 186,201 |
Total lease payments | 646,762 |
Finance Leases | |
2019 | 951 |
2020 | 947 |
2021 | 947 |
2022 | 696 |
2023 | 0 |
Thereafter | 0 |
Total lease payments | 3,541 |
Less: Interest | 84 |
Finance lease obligations | $ 3,457 |
LEASES (Supplemental Cash Flow
LEASES (Supplemental Cash Flow Information) (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 20,092 |
Operating cash flows from finance leases | 9 |
Financing cash flows from finance leases | 236 |
Leased assets obtained in exchange for new operating lease liabilities | $ 5,148 |
DEBT ACTIVITY (Details)
DEBT ACTIVITY (Details) | Jan. 29, 2018USD ($) | Mar. 30, 2019USD ($) | Mar. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||
Interest expense | $ 8,122,000 | $ 10,691,000 | |
Amortization of debt issuance costs | 1,000,000 | ||
Second A&R Credit Agreement | |||
Debt Instrument [Line Items] | |||
Line of credit, voluntary permanent reduction in revolving credit capacity | $ 3,000,000 | ||
Line of credit, incremental amount in excess of voluntary permanent reduction in revolving credit capacity | 1,000,000 | ||
Debt instrument covenant, minimum trailing twelve month EBITDA | 110,000,000 | ||
Debt instrument covenant, minimum liquidity requirement, cash and cash equivalents including amount available for borrowing | 160,000,000 | ||
Debt instrument covenant, maximum capital expenditures per year | $ 35,000,000 | ||
Second A&R Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument covenant, fixed charge coverage ratio | 115.00% | ||
Debt instrument covenant, cash and cash equivalents including amount available for borrowing | $ 200,000,000 | ||
Second A&R Credit Agreement | Maximum | Debt Covenant Period Five | |||
Debt Instrument [Line Items] | |||
Debt instrument covenant consolidated leverage ratio | 3.75 | ||
Second A&R Credit Agreement | Maximum | Debt Covenant Period Six And Thereafter | |||
Debt Instrument [Line Items] | |||
Debt instrument covenant consolidated leverage ratio | 3.5 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Net borrowings (repayments) of debt | 0 | ||
Line of credit facility, remaining borrowing capacity | 211,100,000 | ||
Revolving Credit Facility | Second A&R Credit Agreement | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 325,000,000 | ||
Line of credit facility, components of borrowing base, percentage of assets, united states receivables | 85.00% | ||
Line of credit facility, components of borrowing base, percentage of assets, credit card receivables | 90.00% | ||
Line of credit facility, components of borrowing base, percentage of assets, foreign borrowers | 85.00% | ||
Line of credit facility, borrowing base, excluding aggregate reserves, amount | $ 185,000,000 | ||
Debt instrument, basis spread on variable rate, increase | 0.01 | ||
Line of credit facility, commitment fee percentage | 0.50% | ||
Revolving Credit Facility | Second A&R Credit Agreement | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Line of credit facility, annual authorized prepayment amount | $ 5,000,000 | ||
Debt instrument increments in excess of minimum principal amount | $ 1,000,000 | ||
Revolving Credit Facility | Second A&R Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 4.00% | ||
Revolving Credit Facility | Second A&R Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 5.00% | ||
Revolving Credit Facility | Second A&R Credit Agreement | Base Rate | |||
Debt Instrument [Line Items] | |||
Line of credit facility, annual authorized prepayment amount | $ 1,000,000 | ||
Debt instrument increments in excess of minimum principal amount | $ 1,000,000 | ||
Revolving Credit Facility | Second A&R Credit Agreement | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.50% | ||
Revolving Credit Facility | Second A&R Credit Agreement | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 3.00% | ||
Revolving Credit Facility | Second A&R Credit Agreement | Lower Of Cost Or Market Value | United States Finished Goods Inventory | |||
Debt Instrument [Line Items] | |||
Line of credit facility, components of borrowing base, percentage of assets | 65.00% | ||
Revolving Credit Facility | Second A&R Credit Agreement | Lower Of Cost Or Market Value | Foreign Finished Goods Inventory | |||
Debt Instrument [Line Items] | |||
Line of credit facility, components of borrowing base, percentage of assets | 65.00% | ||
Revolving Credit Facility | Second A&R Credit Agreement | Net Liquidation Value | United States Finished Goods Inventory | |||
Debt Instrument [Line Items] | |||
Line of credit facility, components of borrowing base, percentage of assets | 85.00% | ||
Revolving Credit Facility | Second A&R Credit Agreement | Net Liquidation Value | Foreign Finished Goods Inventory | |||
Debt Instrument [Line Items] | |||
Line of credit facility, components of borrowing base, percentage of assets | 85.00% | ||
Letter of Credit | Second A&R Credit Agreement | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 45,000,000 | ||
Term Loan Facility | Second A&R Credit Agreement | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 425,000,000 | ||
Long-term debt, maturities, repayments of principal in year three | 64,100,000 | ||
Term Loan Facility | Second A&R Credit Agreement | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Line of credit facility, annual authorized prepayment amount | 5,000,000 | ||
Debt instrument increments in excess of minimum principal amount | $ 1,000,000 | ||
Term Loan Facility | Second A&R Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 7.00% | ||
Term Loan Facility | Second A&R Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | Post Closing, First Anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 8.00% | ||
Term Loan Facility | Second A&R Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | Post Closing, Second Anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 9.00% | ||
Term Loan Facility | Second A&R Credit Agreement | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 5.50% | ||
Term Loan Facility | Second A&R Credit Agreement | Base Rate | Maximum | Post Closing, First Anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 6.50% | ||
Term Loan Facility | Second A&R Credit Agreement | Base Rate | Maximum | Post Closing, Second Anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 7.50% | ||
U.S. term loan | |||
Debt Instrument [Line Items] | |||
Interest expense | $ 6,500,000 |
RESTRUCTURING (Narrative) (Deta
RESTRUCTURING (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 10,187 | $ 21,318 | ||
New World Fossil | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total expected costs to be incurred | 150,000 | |||
Restructuring charges | 9,346 | $ 21,318 | $ 46,600 | $ 48,200 |
New World Fossil 2.0 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Costs | $ 800 |
RESTRUCTURING (Liability Incurr
RESTRUCTURING (Liability Incurred for Restructuring Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | $ 10,187 | $ 21,318 | ||
New World Fossil | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 8,027 | 4,475 | $ 4,475 | |
Restructuring charges | 9,346 | 21,318 | 46,600 | $ 48,200 |
Cash Payments | 4,314 | 10,186 | ||
Non-cash Items | 4,236 | 7,169 | ||
Ending balance | 8,823 | 8,438 | 8,027 | 4,475 |
New World Fossil | Store closures | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 2,818 | 2,973 | 2,973 | |
Restructuring charges | 2,664 | 8,556 | ||
Cash Payments | 482 | 5,413 | ||
Non-cash Items | 1,953 | 1,711 | ||
Ending balance | 3,047 | 4,405 | 2,818 | 2,973 |
New World Fossil | Professional services | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 2,198 | 185 | 185 | |
Restructuring charges | 485 | 1,158 | ||
Cash Payments | 819 | 645 | ||
Non-cash Items | 0 | 0 | ||
Ending balance | 1,864 | 698 | 2,198 | 185 |
New World Fossil | Severance and employee-related benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 3,011 | 1,317 | 1,317 | |
Restructuring charges | 6,197 | 11,604 | ||
Cash Payments | 3,013 | 4,128 | ||
Non-cash Items | 2,283 | 5,458 | ||
Ending balance | $ 3,912 | $ 3,335 | $ 3,011 | $ 1,317 |
RESTRUCTURING (Restructuring Ch
RESTRUCTURING (Restructuring Charges by Operating Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 10,187 | $ 21,318 | ||
New World Fossil | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 9,346 | 21,318 | $ 46,600 | $ 48,200 |
New World Fossil | Operating segments | Americas | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 2,662 | 8,124 | ||
New World Fossil | Operating segments | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 1,234 | 3,367 | ||
New World Fossil | Operating segments | Asia | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 547 | 695 | ||
New World Fossil | Corporate | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 4,903 | $ 9,132 |