Fossil Group, Inc. (FOSL) Q3 2026 Earnings Call Transcript

Operator: Good afternoon, ladies and gentlemen, and welcome to the Fossil Group Third Quarter 26 Earnings Call. At this time, all parties are in listen-only mode. This conference call is being recorded and may not be reproduced in whole or in part without written permission from the company. Now I will turn the call over to Christine Greany of Blueshirt Group to begin.

Christine Greany: Hello, everyone, and thank you for joining us. With me on the call today is Franco Fogliato, Chief Executive Officer and Randy J. Greben, chief financial officer. Before we begin, I would like to remind you that information made available during this conference call contains forward-looking information and actual results could differ materially from those that will be discussed during this call. Fossil Group's policy on forward-looking statements and additional information concerning a number of factors that could cause actual results to differ materially from such statements is readily available in the company's Form 8-K, 10-Q, and 10-K reports filed with the SEC. In addition, Fossil assumes no obligation to publicly update or revise any forward-looking statements. Whether as a result of new information, future events or otherwise, except as required by law. During today's call, we will refer to constant currency results. As well as certain non-GAAP financial measures. Please note that you can find a reconciliation of actual results to constant currency results and other information regarding non-GAAP financial measures discussed on this call. In Fossil's earnings release, which was filed today on Form 8-K and is available in the Investors section of fossilgroup.com. With that, I will now turn the call over to Franco to begin.

Franco Fogliato: Good afternoon, everyone, and thank you for joining us today. We are pleased to report standout Q3 results and raise our full year guidance. The business delivered top line growth in the quarter driven by strong momentum across brands, channels and geographies. Our year to date performance reflects the compounding benefits of our turnaround plan underpinned by disciplined execution from our teams around the world. Third quarter results exceeded our expectation in all of our key metrics. Net sales grew 2% to $276 million. Gross margin expanded to 59.9% and adjusted operating income grew to $30 million a $45 million increase versus a year ago. Strong consumer response to our product innovation and storytelling all marks of the quarter. We are incredibly proud that our namesake Fossil brand grew 14% year over year. Additionally, traditional watch sales across all brands increased 6% as we continue to invest in the product, people, and capabilities to drive our path forward We also saw ongoing momentum in our key markets. The US posted another quarter of growth and India continued to deliver exceptional performance. In the EMEA region, top line trends improved considerably compared to the first half of the year. We are deploying greater resources to this important region, and recently appointed a new general manager with deep brand and commercial expertise to help drive a return to growth. Looking now at our channel performance in Q3, we are pleased to have delivered strong results in both wholesale and direct to consumer and to see continued momentum into the fourth quarter. 9 months into the year, 2026 is shaping up to be a defining year for the positive group. And we believe that we are just getting started. In addition to the financial momentum being driven by our turnaround plan, we also announced the 2 important business developments today. We are particularly pleased to have extended our licensing partnership with Diesel through 2032. Diesel is a storied brand with a nearly 50-year history. Our long standing relationship with the esteemed diesel teams spans decades and are of tremendous value for Fossil Group. We are excited to be moving forward together and are confident we will build lasting growth into the future. Another significant development for us is the signing of a new contract with Nick Jonas as our global fossil brand ambassador. We are thrilled to be continuing our partnership with Nick who has become an important member of the Fossil family since the start of our relationship 2 years ago. Nick's campaigns have generated billions of impressions, and the exclusive watch collections we have created together have been standout performers, helping to bring younger consumer to the Fossil brand and driving higher average unit retail. I also want to highlight that we recently strengthened our board of directors. We brought in 2 highly seasoned executives with decades of expertise in global retail, enterprise technology, digital, and omnichannel commerce. We are confident that their valuable insights into our operation and growth plans will help us shape the future of fossil and drive long term shareholder value. As we continue to advance our turnaround plan, our brand led consumer focused operating model is only continuing to strengthen. We are delivering innovation, great storytelling and value to consumer. All of which is extending our competitive advantage and driving durable profitable growth. All 3 pillars of our turnaround plan are delivering. Pillar number 1 is returning to profitable growth. Our success is the result of 4 key drivers. Reason and product innovation supported by compelling storytelling, the ongoing optimization of our direct to consumer businesses, key initiatives that are strengthening licensed brand performance, and the rapid scaling of our India business. Looking at our Fossil brand platform, everything we do is in service to the customer, and that starts with great product. In the first half of 2026, we accelerated our product road map with exciting productions like Big Tic, and World Flags. A continuous flow of innovation from our icons and a fresh collaboration with high profile franchises. In the second half of the year, we are fast following this pipeline with a drumbeat of innovation that is reinforcing fossil industry leadership position, shaping our premiumization strategy, and broadening our consumer reach through expanded offering and price point. The Q3 introduction of Machine X1 has performed extremely well. Demonstrating our ability to build upon fossil heritage, as a democratic brand while introducing higher price points. In fact, the X1 has been selling ahead of our expectation globally and generating a great deal of media attention and social buzz. We also delivered another quarter of successful high profile collaboration that positioned Fossil at the center of culture and broaden our appeal to multiple fan bases. During Q3, limited edition collaboration included Minecraft, Big Tick Mickey and Donald, Spider Man, and Incredible Hulk. The major highlight of our second half innovation pipeline is the launch of Signature, our new Swiss made collection which marks the debut of Fossil premium traditional watch platform. Building on our rich 40 year heritage, signature combined fossil distinct design with elevated material precision engineering, and Swiss watchmaking. Consumer response has been exceptional with initial sales strength exceeding our expectation. We premiered the collection in mid-October. At New York Watch Week, we created incremental buzz from watch industry press and influences. Immediately following the launch, special events were held in key cities globally, including New York, Paris, Berlin, and Sydney. In India, our global ambassador for the signature collection hosted a 1 of a kind celebration at his palace for international media and influencers. All of these signature events were widely covered. Generating excitement around the collection and increased visibility for the fossil brand. As we see our investment demand creation pay dividends we are continuing to lean into our key marketing and storytelling initiative. This include the social media, influencers, and events that are helping us build further cultural relevance. Our renewed global partnership with Nick Jonas is a strong example of this commitment. In 2027, we will further expand partnership to a global campaign and a new Nick Jonas design watch collection with product launching in the second half of the year. Turning to our omnichannel initiative across the brand portfolio. In the wholesale channel, we have built stronger momentum by strengthening our relationship with our partners and creating a more modern expression of our brands, through point-of-sale investments. In Q3, sales in the wholesale channel increased 4% globally, led by the Fossil brand. Growth is being led by the expanded distribution with our existing partners as well as entry into new specialty chains and emerging retailers. Looking now at our direct to consumer business, we delivered growth in the Fossil.com channel and positive comp sales in our Fossil stores. It is gratifying to see all of our initiative coming together and paying dividends. Earlier this year, we brought in new team members in the America region to lead our retail and wholesale businesses and they are already producing results. Great product, great storytelling, a superior customer experience, and discipline around full price selling are all driving tangible change. As we expanded the breadth of our product offerings, and entered new distributions, we are leaning into our competitive advantage to reach new consumer and grow our market share. The Fossil brand has broad appeal to multiple demographics, a balanced assortment for both women and men, and the proven ability to play in both democratic and premium price point. Our initiative across product, distribution, marketing, and events are bringing more customer into the funnel, and the growing number of Gen Z consumer are connecting with the Fossil brand. Moving now to our core licensed brands. In the Michael Kors brand, we are building momentum globally. With notable strength in the U.S. wholesale in Q3. In the quarter, traditional watches continued to anchor the business through core platform strength and compelling line extensions. The Lexington Collection remain our number 1 global franchise. After launching a new iteration in our new iteration of that, platform Chelsea made an immediate impact becoming 1 of our top women's platform. This core watch momentum was complement by strong product elevation in jewelry, where our full price category repositioning North America drove a strong boutique demand and improved performance with key wholesale partners. We are pleased to see the Michael Kors' jewelry business accelerating as we continue to invest in the category through point of sales enhancement and new leadership. Looking now at the Armani Group. Product innovation, global campaigns, and events are driving excitement and visibility around the brand. Emporio Armani recently named its first ever watch ambassador in India. Farhan Akhtar is an actor, filmmaker, producer, a singer who resonates strongly with Gen Z. The campaign launched last month across leading business and fashion publications, including Fortune, GQ, and Esquire, as well as major international art books. The partnership highlights several key timepieces from our fall lineup. Including the launch of our latest evolution of Archetipo, 1 of the brand's most iconic collection. At Armani Exchange, the brand is riding success with youthful urban consumers and meeting them where they are through social media, influencers, and events. Last month, we partnered with the legendary Ibiza nightclub, Amnesia, sponsoring a 50th anniversary event that attracted a sold out crowd and global media attention. Armani Exchange recently renewed its partnership with Kartik Aaryan as a brand ambassador in India. 1 of the country's most popular actors with a strong following in fashion and lifestyle, Aaryan is the face of our fall holiday campaign which blend sport influences, music-inspired details, and modern functionality. The campaign coincide with the September launch of our new base platform, which incorporate design elements inspired by music and DJ culture and have met with strong consumer response. Turning now to our fast growing India market. We had an exceptional quarter driven by ongoing momentum in all brands and channel. there is a great deal of excitement and buzz around the ambassadorship for the Armani brands and fossil signature. As well as our latest product introduction and marketing campaigns. We are particularly excited to see the road map to premiumization proving out. During the quarter, Local consumer response to the Machine X1 was outstanding. And served as an important stepping stone to signature, which has met equally strong response in the initial weeks since launch. This momentum is especially significant during the seasonally important Q4 period, which began in The Netherlands last month with the festivity leading up to Diwali. We are also driving momentum under the hood in India with ongoing operational and supply chain initiative to ensure we are delivering strong execution across the board for our brand, our partners, and our customers. Moving to our second pillar, optimizing the operating model. We are building a leaner, more agile organization that can capture meaningful operating leverage as the top line improves. And we are pleased to have made continuous progress in Q3. Looking at our supply chain in The US, we completed the transition to a new distribution center in the Dallas area, which is right sized for today's business with room to grow. In India, we have expanded our manufacturing capacity at our factory in Chandigarh and have brought in new leadership at the facility to support ongoing momentum. Because we design and assemble in India for India, we have a unique understanding of this important market and what local consumer want. We believe this provide us with a distinctive competitive advantage as we continue to drive growth and scale. Globally, we are continuing to strengthen our go to market execution with enhanced capabilities that are already benefiting the business. We expect to continue to drive improvement in forecasting, demand planning, and inventory management into 2027 and beyond. Technology is increasingly driving our operational efficiency, We are building capabilities to simplify and modernize our infrastructure. Bringing automation to key functions. Example of this include a more efficient design and campaign creation, continued improvement in site search, and navigation, on our own digital platform, as well as scaling the Agentic AI across our back office. Looking at our third pillar, building shareholder value. As we continue on our long term growth journey, we are focused on supercharging the top line across all of our brands globally. Importantly, we are maintaining healthy gross margin in driving and accelerating profitability, providing us with greater optionality to invest in demand creation and build value for all of our stakeholders. Better than expected performance across the business, is enabling us to raise our full year outlook We now expect full year net sales to be in the range of $980 million to $990 million. And adjusted operating margin in the range of 5.5% to 6.5%. And we continue to expect to generate positive free cash flow. Entering the final month of the year, we are laser focused on execution during the important holiday season. We have high conviction that the strength of the watch category, the power of our brand, and our proven operating model position us to drive durable, profitable growth and long-term shareholder value. Now I will turn the call to Randy to discuss the financials in more detail.

Randy J. Greben: Thank you, Franco. Incredibly pleased to see the business deliver on all fronts. As the top line strengthens our healthy gross margin profile, combined with an increasingly optimized and disciplined cost structure, is driving a step change in our earnings power. Net sales in Q3 totaled $276 million up 2% versus last year, and includes approximately 190 basis points of impact related to our store closure program as well as a timing shift of approximately $10 million related to wholesale shipments from Q4 into Q3. You will recall that we had signaled the business' return to growth being projected for the fourth quarter. Notwithstanding the wholesale timing that shifted that growth into Q3, results were better than expected and reflect improving trends across brands, channels, and geographies as we continue to advance our turnaround plan. Moving down the P and L, we continue to drive healthy gross margin expansion. Delivering Q3 gross margin of 59.9%, up 10.9 points versus last year. The increase is attributable to 2 primary factors. First, you will recall that we agreed to substantial reductions to minimum royalty guarantees for the full year 2026 with some of our key licensors. Q3 gross margin expansion versus a year ago reflects both the impact of those lower guarantees and our decision to amortize any expected shortfall across all 4 fiscal quarters versus in the third and fourth quarters only as we did in previous years. Second, Fossil Group's product margins continue to benefit from our focus on driving full price sales ongoing supply chain optimization, and lower prevailing tariff rates versus last year. Importantly, we continue to expect these drivers to support a healthy gross margin profile in the upper 50s for the full year. Looking at operating expenses, SG&A totaled $135 million down $12 million or 8% versus prior year. Primarily reflecting fewer stores in operation, lower compensation and administrative expenses, and the timing of demand creating marketing investments. As a percentage of sales, SG&A leveraged by 540 basis points coming in at 48.9%. Although SG&A rate in the third quarter was slightly better than our long term target of less than 50%, we anticipate that Q4 will be in the low 50s. Reflecting strong operational discipline balanced with the continued investment in demand generation to support our product innovation pipeline, all while driving improved profitability. We ended Q3 with 2 fewer stores, putting us at 174 locations globally. With our store optimization program essentially completed, we are advancing our store of the future strategy to drive increased productivity. We continue to see brick and mortar as an essential part of our omnichannel strategy and believe there is a longer term opportunity to evolve and elevate our existing store concept and ultimately drive more powerful unit economics. Turning to earnings, we delivered another quarter of strong flow through to the bottom line. With Q3 adjusted operating income of $30 million and an adjusted operating margin of 11%. We were net income positive on a reported currency basis delivering $12 million on the bottom line or $0.19 per diluted share. On a year to date basis, reported currency net income was approximately breakeven. We expect that top line improvement and strong flow through will enable us to achieve positive reported net income and EPS for the full year 2020, reflecting a substantial comeback from the losses of recent years. Looking at the balance sheet, we ended the quarter in solid financial condition, with $77 million of cash and cash equivalents, and $35 million of ABL availability with no utilization under our ATM program. Inventory at quarter end totaled $189 million, up 13% versus a year ago, and in support of our seasonal expectations and growth plans. Given our strong operating momentum and confidence in the business outlook, we intend to continue to invest for growth, while maintaining discipline and balance. Moving now to guidance. We are raising our full year outlook as follows. Worldwide net sales are now expected to be in the range of $980 million to $990 million which compares to prior guidance of down 3% to 5% or $955 million to $975 million Adjusted operating margin is now expected to be in the range of 5.5% to 6.5%. Up from prior guidance of 4% to 6%. As we deliver meaningful flow through on sales to the bottom line, we continue to expect the business to generate positive free cash flow. it is worth noting that our implied guidance for the fourth quarter takes into account the wholesale timing shift of approximately $10 million I mentioned earlier. it is particularly gratifying to see our initiatives begin to deliver across the p and l. Our results reflect the hard work of our teams globally, and demonstrate a significantly improved operating model. Now I will ask the operator to open the call up for Q&A.

Operator: Thank you. Telephone and wait for your name to be announced. To withdraw your question, please press Our first question comes from the line of Thomas Forte with Maxim Group LLC. Your line is now open.

Thomas Forte: Great. So first off, Franco, on the performance, outstanding job executing the turnaround. I have 3 questions. I will join 2 together, and then I will ask 1 separately. So the first 2, on the physical store base, are we at a point now where we could think about future openings in addition to any potential closures? And then, Randy, were there any refunds from tariffs in the quarter?

Franco Fogliato: Hey, Tom. Thank you very much. This is Franco Look. Let me pick up on the physical store. We have done. We think the work is now behind us. We are still, you know, comping some closure in 2026. Generally speaking, we remain very opportunistic about openings. Going forward. We have seen improving performances with our stores that are very encouraging. And in particular, we are very encouraged about the performances of our full price stores with the Fossil brand. So Look, it is very encouraging. So the Fossil brand has shown a very strong momentum in Q3.

Randy J. Greben: And then, Tom, with respect to your second question, no, there were no refunds from tariffs in the quarter.

Thomas Forte: Okay. Thank you. And then my follow-up question, and I apologize if I am a little early on this 1. But looking ahead, can you talk about your capital allocation plans when you start generating free cash flow including paying down debt, and any other things you would like to highlight?

Franco Fogliato: Yeah. Look. If I will take the lead, but Randy is definitely the person who complemented it. Look. We wanna grow the company. And we are very pleased to see the company returning to positive EPS and we are very pleased with the really, the positive free cash flow. Growth is a company priority, but Randy, you may want to add to that.

Randy J. Greben: We have not spoken about capital allocation but we have been consistent in saying that our priority has been returning the company to growth And for the period of time that we have been executing the turnaround, our belief has continued to be the highest and best use of the next dollar has been towards growth. We will continue to evaluate that. Generating free cash flow gives us options. Be it investing in growth or thinking about capital allocation differently. We are proud of the fact that the business has gotten to the point where it is expected to deliver positive free cash flow. Giving us those options that we are excited about putting to use.

Thomas Forte: Excellent. Bravo. Great job.

Franco Fogliato: Thank you, Tom. Appreciate it.

Randy J. Greben: Thank you.

Operator: Our next question comes from the line of Jeremy Hamblin with Craig Hallum Capital Group. Your line is now open.

Jeremy Hamblin: Thanks. And I will add my congratulations on the job well done and the momentum in the business. If we look at the geographic markets and how you are seeing that kind of transform here? You have got clearly momentum in Asia, building momentum in The US. Can you talk a little bit about what you are starting to see in Europe and in terms of, obviously, the Middle East conflict is has clearly had some dampening effect on the business. But can you talk about, you know, are you starting to see seeds of kind of improvement in Europe? And how are you thinking about it here in Q4? From a geographic perspective?

Franco Fogliato: Thank you, Jeremy. Look. We have seen positive trends, in particular in quarter 3 compared to the first half of the year. We always mention that Europe repositioning was really related to, the war but also the change of some of our markets into distributors, which we thought was better for a long term growth of the company. And we knew it was something that hurt us in the short term from a top line perspective, but eventually, we will drive a more profitable company with the right partner in the country. The combination of those together with, obviously, have led to pretty difficult time in Europe. We are seeing a better trends there We expect the market to continue to improve We believe it is a very important market for us and we are bringing in new talent dedicated to the market, to return the market to growth. As we go forward.

Jeremy Hamblin: Got it. And then switching to brands, right? So you talked about the Fossil brand. Really seeing momentum, up almost 14% constant currency in Q3. Can you just discuss with us, are there other brands where you are seeing momentum, maybe Kors or Armani? And you know, within that, what are you seeing in terms of price points As it looks like the market is really starting to see momentum in kind of the sub, you know, 500 and maybe even sub-$300 price point is maybe the strongest part of the traditional watch market.

Franco Fogliato: Yeah. For sure. We see very encouraging trends in the traditional watch market led by Gen Z consumer coming into the space. Now those younger consumer, they are not really looking at the luxury market. They are looking at the sub-$500 and they are looking at those watches as everyday accessories. We are well positioned to really drive and grow with that trend. We got great brands, very relevant. Michael Kors is a world class brand that sees growing momentum. Armani does not need a presentation, is very strong in across the globe. But we are very encouraged about being positioned to capture that growth, and we are particularly very pleased not only with the I would say, the innovation of the product, but the improving go to market, the presentation in the store with our world class wholesale partners that are pleased to see a strong comeback of the Fossil Group.

Jeremy Hamblin: Great. And then I wanted to ask congratulations on getting the diesel extension in place. That certainly is a good lead in to ask about your other large licensing agreements. Can you discuss progress that you might have made on those long term extensions and, when do you expect to have a deal in place? You know, is. Do you have confidence in getting those deals done? And then Yeah. When do you think you can update us?

Franco Fogliato: Thank you, Jeremy. Yes. We are in advanced conversation. We are very pleased that we have long term relationship with all our partners. We signed diesel and we continue to make progress, and it is, I would call, a work in progress in advanced conversation. We will update our stakeholders as we go forward. But, you know, those relationships, they are very important to us. And we have a long term relationship with both Armani and Michael Kors.

Randy J. Greben: Jeremy, just to add, our confidence level remains high at the ability to get to acceptable long term extensions with the remaining large licensors.

Jeremy Hamblin: And then, Randy, as a follow-up on that, you know, in terms of thinking about some of the guarantees and the shortfall payments that you have had over the last several years, Those have obviously been big impediments in terms of your gross margin. Do you have a sense for, you know, what type of, you know, the new agreements that you have in place what those shortfall payments might look like as we get into next year? I mean, it seems like this year is clearly less than you know, $15 million to $20 million versus last year. Maybe it was something more like $50 million. Any color you might be able to share with us at this point now with the company seeing, you know, significantly better sales run rates?

Randy J. Greben: If you look at the gross margin performance in the quarter, again, in the very high upper 50s, We are really proud of the way the full price model has delivered What you do not see this year is the impact of shortfalls like you saw in prior Q3s when we think about the ongoing negotiations with our licensed partners, maintaining continuity of that gross margin rate through the year so not having meaningful shortfalls is clearly an objective of ours.

Jeremy Hamblin: Got it. Thanks. I will hop out of the queue. Congratulations.

Operator: Our next question comes from the line of Ryan Myers with Lake Street Capital Markets. Your line is now open.

Analyst: Hey, guys. Thanks for taking my questions. Congrats on the awesome quarter and progress here. First question for me. And Randy, I think you kind of talked a little bit in your prepared remarks, but just can you revisit this and just sort of help bridge the gap between where the operating margin came in during the quarter and what you are expecting in Q4. It sounded like you are expecting some reinvestment, but just wanted to make sure I fully understood that.

Randy J. Greben: Yeah. The point that we were making with respect margin, and thanks for the question, Ryan, was similar to the point that I was just making, which is we have, in years past, seen fairly significant divots in the third quarter from the recognition of that royalty shortfall. The fact that the margin maintained in relative terms from Q2 to Q3 versus the significant reduction last year. You can largely attribute that improvement to the change in royalty shortfall. there is a small amount that has impacted both Q1 and Q2 because of our decision to amortize it. But the easiest way to think about it is that divot that existed in Q3 last year, which is gone away in Q3 this year, represents in broad strokes the recovery of that shortfall.

Analyst: Okay. Got it. Makes sense. And then just, you know, a question on the wholesale business. Maybe just update us on, you know, what you are seeing in terms of, you know, door expansion there, if you have been able to expand in any other retailers or if a lot of the momentum you have seen has just been with existing partners.

Franco Fogliato: Yeah. Look. We are we are excited, Ryan. I think we are seeing, particularly in The US, growing trend with Gen Z new retailers coming on board, including what we call energy specialty retailers, specialty stores. We are growing with existing distribution Europe has been a little softer in general from a retail perspective. Obviously, there were combination between the war and recent happenings in several countries have been-- The March-- That trend in the watch industry is, we believe, is gonna soon get to Europe. Stronger momentum in India continuing. And we have seen some better momentum with watches coming back in Asia. Our wholesale partners are very supportive of the strategy of the company. We are building. We will continue to build a long term relationship. I spend a lot of time out there talking to them, and they are very pleased with the performances of the group, and we are excited about the opportunity going into the future. Got it. Thanks for taking my questions. Thank you, Diane.

Randy J. Greben: Thank you.

Operator: Our next question comes from the line of Owen Rickert with Northland Capital Markets. Your line is now open.

Owen Rickert: Hey, guys. Thanks for taking my questions here and unreal quarter. Awesome to see. First for me, I know it is still pretty early since the recent launch of the Collection. And per your prepared remarks, it sounds like performance has been really strong since launch. But can you just comment on how you are feeling about your first entrance into this new price point And maybe how should we expect this collection to expand throughout 2027 and beyond?

Franco Fogliato: Thanks, Owen. We are excited. Look, I think I have been always positive about the launch of our signature Swiss made range. Remember having this conversation when I joined the company. I do not think anyone believed in it at that time. We are seeing stronger momentum beyond our expectation. Look. Ultimately, this is never gonna be the biggest area. We remain a democratic brand focused to Gen Z consumer in a lower price point. But the credibility we are building with simply great product is fantastic for the Fossil brand. And we are seeing so strong momentum to the point where yeah, the coverage has been beyond anyone expectation.

Owen Rickert: Awesome. Awesome. Great to hear. And then lastly for me, the Nick Jonas partnership expansion, through 2027 and 2028 is great to see as well. Can you just give us a sense of maybe the marketing spend commitment tied to this deal and how you are measuring ROI on other ambassador partnerships like this 1. Maybe relative to more traditional media spend?

Franco Fogliato: Yeah. Look. it is it is very exciting to see what Nick and Fossil have done together. I think Nick has helped to transform the brand, shape, the character of the brand. he is he is been passionate beyond the agreement. He has been a part of the family He has been going beyond the agreement of what he needed to do he is a great singer, actor, you know, investor. he is part of the fossil family. he is he is really done a great job. We have seen the evolution of the brand over time. Now sometimes it is difficult to have a precise ROI in this investment. But ultimately, I think the performances of the Fossil brand returning to growth and in particular growing double digit on the quarter 3 are just a way to indicate what the opportunity is going forward. So we are we are so excited about him continuing with us.

Owen Rickert: Thanks, guys. Appreciate it.

Franco Fogliato: Thank you. Thank you, Owen.

Operator: And I am currently showing no further questions at this time. I would now like to hand the call back over to management for closing remarks.

Franco Fogliato: Thank you, everyone, for listening today. We wish everyone good health during the upcoming holiday season. Thank you.

Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.