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According to Cnbc, Fossil Group reported a return to profitability and sales growth in its fiscal third quarter, signaling early progress in the watchmaker’s turnaround strategy. The company posted operating income of $25.3 million, compared with an operating loss of $21.7 million a year earlier, while net sales rose 0.4% to $271.2 million.

For the quarter ended Oct. 3, Fossil reported net income of $11.7 million, or 19 cents per share, versus a net loss of $39.9 million, or 76 cents per share, in the prior-year period. Operating expenses declined 11.1% to $137 million. The company last recorded a year-over-year sales increase in the first fiscal quarter of 2022.

Fossil raised its full-year sales outlook to between $980 million and $990 million, after previously forecasting a decline of between 3% and 5%. The new range would still represent a slight decrease from more than $1 billion in net sales in the prior year. The company also said it expects positive free cash flow by year-end.

Chief Executive Franco Fogliato, who joined Fossil in 2024, said the company has focused on shrinking to a sustainable base through store closures, fewer promotions, improved marketing and a broader product range. Direct-to-consumer sales fell 5.9% during the quarter, which he attributed to the company’s aggressive downsizing. Asia was Fossil’s key growth engine, with net sales increasing 15.1%, led in part by India. Traditional watches, which account for about 86% of sales, grew 6.4%, while smartwatch sales were under $1 million.