Fossil 2Q16 Earnings Call Notes

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Fossil Group (FOSL) Kosta N. Kartsotis on Q2 2016 Results

Wearables launch will be the biggest we’ve ever done

” the wearables launch we’re doing there is one of the biggest launches we’ve ever done. There’s going to be huge amount of awareness, PR, advertising, celebrity input, social media, digital, video. It’s going to be very significant, and we’re expecting that could change the direction pretty quickly.”

The smart watches are going to get better

“One other thing to keep in mind is not only on display smartwatches but on hybrids and also trackers, because the technology is going to get better and better, it’s going to get smaller, more efficient, better battery life. The display smartwatches will get smaller which will enable them to fit on a female brand. They’re going to be untethered at some point, a huge amount of innovation and technology is going to make these products even more compelling to more brands, and it’s a very significant opportunity.”

Gregory A. McKelvey – Executive Vice President, Chief Strategy Officer & Chief Digital Officer

Launching a large number of wearables over the next three months in two waves

“The next three months are really going to amount to unprecedented launch in wearables. So we’ll have eight brands across three product categories, 100 SKUs, 40 countries, 20 languages, all launching in the next three months. You’ll see that in two waves. The first wave will be Fossil and Michael Kors smartwatches on Google’s Android Wear platform. Those will hit the market at the very end of August and early September.”

“Our wave two comes later in September and in October, some early November. And what we’ll see there is hybrid smartwatches and trackers across eight brands, so Fossil, Michael Kors, kate spade new york, Armani, Diesel, Misfit and Chaps by Ralph Lauren. And what we’re doing there is with hybrid smartwatches we’re adding the Misfit technology into traditional watches that people love today. ”