S&P trims Fossil Group

S&P said it lowered its ratings for Fossil Group Inc. and its senior unsecured notes to CCC+ from B-. The recovery rating on the notes remains 4.

“The downgrade reflects continuing sales declines, depressed profitability, and higher-than-expected cash burn, which has led to very high leverage. Fossil's results have been weaker than expected as significant declining sales continue to strain profitability and cash flow generation. Global sales decreased 13% in its second quarter ended July 1, 2023, with declines across all major geographical regions and product categories,” the agency said in a press release.

S&P noted that Fossil’s S&P Global Ratings-adjusted EBITDA was negative for the second consecutive quarter.

The outlook is negative.

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