 RICHARDSON, Texas, Aug. 12, 2020 GLOBE NEWSWIRE -- Fossil Group, Inc. NASDAQ: FOSL today announced financial results for the second quarter ended July 4, 2020. Second Quarter Summary Worldwide net sales of 259 million decreased 48 on a reported basis and 47 in constant currency. The year-over-year decline primarily reflects COVID-19 related impacts on a global basis, including retail and wholesale closures, throughout much of the quarter. On a constant currency basis, sales from the Companys owned e-commerce websites increased 138 and third party marketplace e-commerce sales increased 20 compared to prior year. Gross margin of 54.3, representing 140 basis points of expansion compared to the second quarter of 2019. The Company reduced operating expenses by 86 million, or 33, on a year-over-year basis, due to both its New World Fossil 2.0 - Transform to Grow program NWF 2.0 and immediate cost reduction efforts. Operating loss of 37 million compared to operating income of 2 million a year ago, primarily due to COVID-19 impacts on sales. Cash and cash equivalents of 278 million, and total debt of 269 million as of July 4, 2020.Our second quarter results were impacted by broad-based global store closures due to COVID-19 throughout much of the quarter, stated Kosta Kartsotis, Chairman and CEO. Our teams have responded quickly and executed well in the face of significant COVID-19 impacts. In navigating this challenging environment, we have taken aggressive actions to increase liquidity and reduce costs, and further engaged with our consumers through digital initiatives and product innovation. Importantly, we are maintaining our focus on the strategic priorities we outlined at the beginning of 2020, including the acceleration of our cost reduction actions through NWF 2.0 and the expansion of our digital capabilities to help drive continued growth in the e-commerce channel.COVID-19 UpdateThe Company is continuing to closely manage liquidity, expenses and inventory to navigate macro uncertainty and COVID-19 impacts. During the second quarter, the Company: Amended its credit facility, resulting in increased covenant flexibility; Reduced operating expenses across payroll, marketing, travel, professional fees and contract labor versus prior year; Closely managed working capital by reducing inventory receipts; and Reduced outstanding debt and revolving credit levels by 56 million.As of July 4, 2020, the Company had total liquidity of 311 million, comprised of 278 million of cash and cash equivalents and 33 million of availability under its revolving credit facility. The Company expects to close the third quarter of 2020 with approximately 250 million to 300 million of cash and cash equivalents and approximately 30 million of availability under its revolving credit facility.Second Quarter 2020 Operating ResultsWorldwide net sales totaled 259.0 million, a decrease of 48 on a reported basis and 47 in constant currency compared to 501.4 million in the second quarter of fiscal 2019. The year-over-year decline was primarily due to COVID-19 related retail closures, including both Fossil stores and wholesale doors. Partly offsetting brick-and-mortar sales declines was growth in digital channels, with owned e-commerce websites increasing 138 and dedicated third party marketplaces growing 20, both on a constant currency basis. The following table provides a summary of net sales performance, on both an as reported and constant currency basis, for the second quarter of 2020 compared to the 2019 second quarter in millions, except percentage data. Second Quarter 2020 2019 Growth Decline Amounts as Reported Amounts as Reported Dollars as Reported 1 Constant Currency Dollars 2 Percentage as Reported 1 Percentage Constant Currency 2 Americas106 223 117 117 53 52 Europe80 147 67 66 46 45 Asia69 126 57 55 45 43 Corporate4 5 1 8 8 Total net sales259 501 242 238 48 47 Watches209 413 204 200 49 48 Leathers27 53 26 26 49 49 Jewelry15 21 6 5 27 26 Other8 14 6 7 48 47 Total net sales259 501 242 238 48 47 1 Reported GAAP amounts include impacts from currency. 2 Eliminates the effect of currency changes in fiscal 2020 to give investors a better understanding of the underlying trends within the business. See constant currency financial information at the end of this release for more information.Gross profit totaled 140.6 million compared to 265.1 million in the second quarter of 2019. Gross margin increased 140 basis points to 54.3 versus 52.9 a year ago, primarily reflecting a higher mix of e-commerce sales and reduced minimum licensor royalty costs, partially offset by heightened promotional activity and increased freight and duty costs. Currency favorably impacted the gross profit margin rate in the second quarter of 2020 by approximately 50 basis points.Operating expenses totaled 177.4 million compared to 263.4 million a year ago. Operating expenses in the second quarter of 2020 included 10.5 million of restructuring costs, primarily related to employee costs, professional services and store closures, while operating expenses in the second quarter of 2019 included 7.3 million of restructuring costs. Second quarter selling, general and administrative expenses decreased on a year-over-year basis, reflecting lower compensation, marketing and discretionary costs.Second quarter operating loss was 36.8 million compared to operating income of 1.7 million in the second quarter of 2019. Net loss totaled 22.5 million, or 0.44 per diluted share, compared to net loss of 7.3 million, or 0.15 per diluted share, in the second quarter of 2019. Per share data included restructuring charges of 0.16 per diluted share in the second quarter of 2020 and 0.11 per diluted share in the second quarter of 2019. During the second quarter of fiscal 2020, currencies, including both the translation impact on operating earnings and the impact of foreign currency hedging contracts, favorably affected loss per diluted share by approximately 0.05.New World Fossil 2.0 - Transform to Grow InitiativeDuring 2019, the Company initiated NWF 2.0, which was designed to deliver gross margin benefits and operating expense reductions totaling 200 million over the three-year period from 2019 to 2021. As a result of the unprecedented impact of COVID-19, earlier this year the Company significantly expanded its NWF 2.0 initiative to 250 million to include additional organizational efficiencies and to accelerate digital initiatives. The Company expects to generate 100 million in expense savings in 2020.Balance Sheet SummaryAs of July 4, 2020, the Company had cash and cash equivalents of 278 million and total debt of 269 million, including 170 million of borrowings under its Term Credit Agreement. Inventories at the end of second quarter 2020 totaled 376 million, a decrease of 18 versus a year ago, primarily reflecting accelerated inventory reduction actions, particularly of older generation connected product, and proactive management of inbound receipts to align with reduced consumer demand.2020 OutlookIn light of macro uncertainties and fluid COVID-19 impacts, the Company is not providing full year financial guidance at this time. The Company currently anticipates that third quarter worldwide net sales will decline in the range of 35 to 45, reflecting continued contraction in retail and wholesale, partly offset by ongoing strength in e-commerce channels.Safe HarborCertain statements contained herein that are not historical facts, including multi-year NWF expense reduction estimates, the completion of any amendments to our Term Credit Agreement, future financial estimates as well as estimated impacts from COVID-19, tariffs, the Tax Cuts and Jobs Act, foreign currency translation, amortization expense, foreign tax credits, non-cash impairments and restructuring charges, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: the effect of worldwide economic conditions; the impact of COVID-19; the length and severity of COVID-19; the pace of recovery following COVID-19; the failure to negotiate and enter into an amendment to the Term Credit Agreement; significant changes in consumer spending patterns or preferences; interruptions or delays in the supply of key components; acts of war or acts of terrorism; changes in foreign currency valuations in relation to the U.S. 