Hello and welcome to Fossil Group Q1 2026 Earnings Conference Call. Just a few reminders that all lines have been placed on mute to prevent any background noise. That this call is being recorded. This call may not be reproduced in whole or in part without the company's permission. I will now be passing the call over to the presenters. You may begin. 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 the fossilgroup.com. With that, I'll now turn the call over to Franco to begin. Good afternoon. Thank you, Christine, and welcome everyone. We're pleased to begin the year with strong financial performance. Our turnaround pillars are delivering results today while advancing our path to long-term profitable growth. I want to recognize our exceptional global teams. Their commitment, creativity, and disciplined execution are driving tremendous progress in our turnaround. In the first quarter, we delivered net sales of $280 million, healthy gross margin of 59.7% and strict expense control, which drove another quarter of positive adjusted operating income totaling $10 million. Topline results were better than we expected, led by strong performance in wholesale, core brands, and key geographies, as well as notable strength in traditional watches. Looking at the balance of the year, strong first quarter performance combined with continuing industry tailwinds is enabling us to confidently reiterate our full year guidance despite the dynamic macro environment. Importantly, our teams remain laser-focused on our three strategic turnaround pillars, returning to profitable growth, optimizing our operating model, and building shareholder value. We're executing several initiatives across these pillars. I will now turn to sharing updates on our progress and plans. First, returning to profitable growth. We're strengthening the Fossil brand platform through action to fuel innovation, deepen consumer engagement, grow the traditional watch business, and reinvigorate our jewelry and leather categories. Our creative teams are delivering compelling innovation to consumer through a blend of creativity and logic that leverage our unique heritage to build the brand heat. The quarter was highlighted by the return of Fossil's Big Tic, which reflects our creative evolution as we draw from Fossil rich archives. The storytelling around Big Tic has generated tremendous visibility from global lifestyle media and leading watch industry publication. Experiential seedings of the product drove a nostalgic excitement and placed Big Tic in the hands of media, influencers, and celebrities early on. In fact, Y2K media resonate with younger males, driving social engagement and online conversion among Gen Z and Millennial consumers. We will be carrying this momentum forward with additional Big Tic animation launching throughout the year. In Q2, we introduced a limited edition Big Tic World Flags collection, which leverages engaged fan base and excitement around global sports moments such as the FIFA World Cup and Olympics. More recently, we released our latest Star Wars collaboration on May 4th. The new Mandalorian plus Grogu collection is garnering attention from Star Wars super fan, sci-fi, and watch enthusiasts. Next up, we have exciting new collaboration with Marvel rolling out in Q3. Great storytelling remains a hallmark of the Fossil brand. Our market investments are helping us drive brand heat and new customer acquisition. We're amplifying our messaging around important times of the year. Our recent Mother's Day campaign focused on our icon product offerings and double down on minis, which drove excitement around the well-loved collection such as Arlo and Raquel. Next month, we will be in the market with Father's Day messaging and local events. Moving now to our omni-channel initiatives, which are focused on modernizing our brand expression wholesale, improving our e-commerce business, and optimizing our Fossil store portfolio. Our focus on full price integrity, channel discipline, and operational excellence is building traction in key areas of the business. During Q1, wholesale grew mid-single digits with our core brand traditional watch sales up high single digits in the channel. Performance was strong with both our long-term wholesale partners as well as a specialty and energy ret ailers, a new channel that is helping us build brand awareness and create excitement among a younger demographic. From a regional standpoint, in Q1, we saw broad-based strength in both the U.S. and India. Additionally, we were pleased to see improved performance in key Asia Pacific markets such as Japan and Australia in the quarter. The results are a testament to new leadership that is advancing our commercial strategy across the region. From a high level perspective, our wholesale partner relationships are strengthening as we continue to walk the walk on full price selling and deliver compelling product assortments. In fact, our order books are building earlier, and we're beginning to develop longer term plans together, demonstrating the confidence of our partners have in our brand. Our direct-to-consumer model keeps us close to consumer, providing a deeper understanding of customer needs and fostering more relevant brand building. On the e-commerce front, we're continuing to drive channel profitability on a smaller sales base through two key focus areas. One, our commitment to full price selling, and two, initiative to strengthen the online customer journey. This includes continuous improvement to our new Fossil brand platform with fresh content and functional updates that enable us to showcase a more cohesive brand presentation, drive customer engagement, and strengthen brand perception as we aim to build scale. A great example of this is the recent launch of a new navigation across our Fossil e-commerce site globally. This enables richer brand storytelling within the navigation experience and sharpened focus on our collection, making it easier for customers to discover and shop key product stories. The enhancement reduce friction points across the browsing journey and empower our merchandising team with greater flexibility to respond quickly to trends and key commercial moments. In the retail channel, we closed seven stores in Q1 and remain on track to close approximately 15 locations in 2026. It is worth noting that we have significantly scaled back our plans to downsize the portfolio as a result of improving performance in our full price stores. It is clear that our initiative to deliver more engaging customer experience are bearing fruit. In Q1, comp performance was particularly strong in our full price stores. In the near term, we're further advancing our store of the future strategy by rolling out an expanded suite of selling tools that equip our associates with the skills needed to maximize full price sales. Longer term, we plan to test and learn to build a refined store model that generates compelling returns and presents an opportunity for major expansion. Moving now to our core license brands, where we're seeing growth across the spectrum, including Armani Group, Diesel and Michael Kors. I will start with the Michael Kors brand, where we were pleased to see year-over-year growth in Q1. Productivity and newness fueled momentum in the wholesale channel, further supported by the ongoing work being done by the Michael Kors team to drive brand heat. Additionally, the shift toward a more competitive pricing architecture in jewelry is driving increased AUR and improved brand positioning. In Emporio Armani, the brand achieved a strong sell-through across channels, driven by elevated assortment, a shift toward premium offerings, and compelling high-visibility marketing campaigns. In Armani Exchange brand, healthy performance is attributable to higher full price sales, strength in women's, and product newness. Looking now at India, where we're successfully scaling a proven growth engine. During Q1, we executed against the key initiatives we outlined on our last earning call. Specifically, we broadened our reach with the addition of more than 70 new wholesale doors. We drove a premium position with new price points, resulting in a higher mix of full price sales as well as a higher average unit at retail. We implemented new e-commerce platform and CRM integration tool to enhance our omni-channel capabilities. We continue to leverage our market leadership position and build brand heat through stronger distribution across Fossil, Armani, Diesel and Kors. Moving to our second turnaround pillar, optimizing our operating model. Our teams are actioning a number of initiatives to strengthen our go-to-market execution, including both operational investment and infrastructure improvement. Simplification across the organization continue as we further streamline operation, rationalize our investment, and consolidate our IT stack. This includes the ongoing simplification of our analytics platform, which has reduced cost and enhanced our capabilities, establishing the data architecture required for agentic AI. As part of our broader strategy to build a more competitive and profitable model in smaller international geographies, subsequent to a quarter end, we signed an agreement to transition another international market to a distributor model, aligning with a best-in-class partner in South Africa. This strategy enable us to leverage the local knowledge and the expertise of regional distributors while lowering our operating expenses, driving strong flow-through of gross profit to the bottom line. I will now turn to our third and final pillar, building shareholder value. Ongoing progress across the business is setting the stage for us to continue to drive improved profitability and deliver positive free cash flow. Our strong start to 2026 reinforced the effectiveness and durability of our turnaround plan. The impact of simplification and focus is clear. Our brand-led, consumer-focused model is enabling us to build a smaller, more profitable business that is positioned to return to growth in the fourth quarter of this year. The progress and momentum we saw throughout 2025 carried into the first quarter of 2026. With only one quarter of the year delivered, we are holding our guidance in light of the geopolitical climate and its potential impact on the consumer. We continue to have strong conviction in the trajectory of the business, and am I committed to building long-term shareholder value. Now, I will turn the call to Randy to discuss the financials. Thank you, Franco. We delivered another strong quarter across the P&L, reflecting the strength of our brand portfolio and continued traction within our turnaround pillars. While our top-line outperformance was primarily driven by better than expected wholesale results, including the shift of some receipts previously anticipated in Q2 moving into Q1, we continue to make progress towards strengthening our D2C channel. In fact, every facet of our business is contributing to the success of our turnaround. Net sales in Q1 totaled $218 million. That's down 6% from last year. Looking deeper, the comparison versus last year includes 7 points of unfavorable impact as we lacked the extra week in last year's first quarter, as well as another 280 basis points related to the net impact of our store closure program and our smartwatch exit. Taking these factors into account, we are clearly demonstrating that the business is stabilizing and poised to return to top-line growth. First quarter gross margin came in at 69.7%, down 160 basis points year-over-year, reflecting both strong product margins and our ongoing focus on full price selling. Similar to revenue, there's quite a bit to unpack as it relates to the inputs to our results. First, we incurred higher tariff expenses this year versus Q1 of 2025. While prevailing tariff rates at present remain lower than they were before this year's court ruling, they are still elevated as compared to where they were prior to Liberation Day, which you will recall was a Q2 2025 event. Next, we recognized a portion of our anticipated full-year minimum royalty shortfall in the quarter. As a reminder, in recent years, the GMR true-up was recognized in our second half, with the majority of it being booked in Q3. Concurrent with negotiating more favorable license agreement terms for 2026 last year, we are now amortizing the shortfall throughout all four quarters. It bears reminding that the quantum amount of shortfall is forecast to be materially lower than in recent years and should result in much more consistent quarterly gross margin, which we continue to anticipate being in the mid to upper 50% range. These two impacts, higher tariff expense and licensed brand minimum royalties, were partially offset by the recognition of a tariff refund claim during the quarter. Of the total $5.9 million claim, $4 million was recognized as reduction to cost of sales, $900,000 was recognized as a reduction to SG&A, and the remaining $1 million was recorded as a reduction to inventory on the balance sheet. The majority of the $4 million cost of goods benefit is related to costs incurred in 2025, and therefore, has been adjusted out of our operating income. Net net, our Q1 gross margin is very healthy and reflects not only the power of our portfolio of brands, but also the strength of our robust supply chain. Importantly, we remain confident that we can maintain this margin profile throughout the balance of the year. It's also worth noting that we have not embedded any further refunds into our 2026 outlook. Turning now to operating expenses, we lowered SG&A dollars by 13%, which exceeded our sales decline and drove expense leverage in the quarter. The improvement is attributable to 27 fewer stores in operation versus a year ago, as well as lower compensation and administrative expenses. During Q1, we closed 7 stores and expect to close up to 15 in total this year. This would put us at 185 locations globally at the end of 2026. As you heard from Franco, we are continuing to focus on optimizing our operating model by capturing efficiencies and rationalizing investments across key areas of the business, including go-to-market and information technology. I will also point out that restructuring costs have come down considerably, totaling just $2 million in Q1 of 2026 versus $16 million a year ago. The leverage we achieved in SG&A, with costs coming out in excess of our sales decline, is a tangible example of the discipline that underpins all of the efforts of the group today. Subsequent to quarter end, we've continued to fine-tune the operating model, including, as Franco mentioned, signing the agreement to transition our South Africa subsidiary to a distributor during Q2. The combination of healthy gross margins and expense control absolutely translated to the bottom line, where we delivered another quarter of profitability. Q1 adjusted operating income came in at $10 million versus $9 million a year ago. Turning to the balance sheet, we ended the quarter with $81 million of cash and cash equivalents and $28 million of availability under our asset-based revolver, reflecting our seasonal working capital cadence. Additionally, as of quarter end, we had no utilization under our ATM program. Inventory at quarter end totaled $156 million, down 14% versus last year, which is in line with our expectations to increase turns even as we lean into more full-price selling. In Q1 of this year, our cash used in operations reduced by over 50% from the same period last year, reflecting our strengthening profitability and improved working capital management. Moving now to guidance, strong execution against our turnaround pillars is enabling us to reiterate our outlook for the full year 2026. While results to date are in fact ahead of expectations, we believe this is prudent given the uncertainty that exists in the geopolitical environment and the potential effects on input costs and consumer behavior. We continue to expect worldwide net sales to decline in the range of 4%-6%. Of note, the net impact of store closures and the extra week in 2025 are worth about 360 basis points. Further, we continue to anticipate that 2026 will be second half-weighted and will be punctuated by an expected return to top-line growth in the fourth quarter as we continue to harness the compounding benefits of our turnaround initiatives. On the bottom line, we continue to expect adjusted operating margin in the range of 3%-5%. Lastly, we continue to expect to achieve breakeven free cash flow on a full-year basis. I'll ask the operator to open the call to Q&A. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, kindly press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask question and are listening via loudspeaker on your device, please speak up your handset and ensure that your phone is not on mute when you are asking a question. Your question comes from the line, Thomas Forte from Maxim Group. Please go ahead. Great. Thanks. First off, Franco and Randy, congratulations on super impressive performance. I have one question and one follow-up. I'll go one at a time. I think you commented, Franco, in your prepared remarks that you had a return to top-line growth in traditional watches, which I believe is the first time in years. How should we think about the sustainability of that performance? Tom, thank you very much. Look, we're excited. We're 1 quarter in. In particular, we're excited about the performances across the traditional watches in the wholesale channel, where we've been performing very well. We're still doing a lot of work from our DTC, in particular with closing stores and reducing some of the sales we were doing on e-com, that were You know, at the beginning of 2025, we still had a lot of inventory that was old and bought prior I joined the company. The greatest thing is, not only we're making progress with the wholesale accounts, but also we're seeing we're selling at a higher AUR, driving better gross margin. Overall, we're very encouraged. I mentioned a lot of work we've done at the beginning when I joined the company, only got to market towards the end of 2024. The pipeline in 2025, sorry, go to the market at the end of 2025, in particular, the Nick Jonas collection. We have a Big Tic now in 2026, we have a full pipeline ready to go as we enter later this year, the second half, we're working on 2027. A lot of work we've done has been into turning around our traditional watch categories. We were very excited. This is honestly combined with a tailwind in the industry, in particular in the America region, where we're seeing a lot of younger consumer coming back to the space, which is very encouraging for all of us. Randy, anything? The only thing that I would add is the combined power of not only having the traditional watch category perform, in a, in a manner or strength that it hasn't in some time, but coupling that with full price selling, you really see that flow through the gross margin. This is a quarter where we've demonstrated the ability to translate that gross margin through to the bottom line. It's a, it's a tangible proof point of the strategy coming together. Excellent. For my follow-up, Franco, you used the words agentic commerce, which is something I've heard a lot from Amazon, really from all the big mega cap technology companies. What are your thoughts on how you're preparing for Fossil for agentic commerce and what it could mean for you in the future? It's a great question. We're absolutely focused on driving, generally speaking, AI as an opportunity for the company, in particular, agentic AI. We're making great progress. We're at the beginning of a journey where a lot of areas in the company from marketing, e-com, supply chain, where we're applying AI already. We got a great vision for the company, we're just at the beginning of the journey. It is shaping the way we work. We are definitely better. You know, this is a different company from what we used to do. Right now, we're focusing into execution. Agentic AI is an opportunity for us to improve our execution of the plan as we progress forward. When we created the current version of the pillars that we're using that power this phase of our turnaround strategy, AI was at the heart, not just of growth, which is where you started this question, Tom, but also very much within pillar 2, which is the optimization of the operating model. We already have a number of use cases that drive efficiency and/or remove cost. I think like a lot of companies, we recognize that we're just scratching the surface. We're at the very beginning of this journey, but important to know that we're on it alongside many of our other competitors and other companies out there. Thank you, Franco. Thank you, Randy. Thank you very much, Tom. Your question comes from Owen Rickert with Northland Capital Markets. Please go ahead. Hey, guys. Congrats on a great quarter, and thanks for taking my questions here. Firstly, on Big Tic, sounds like the initial launch has been great and that the rollout is gonna be over a few quarters here. Where are we in that rollout right now? You know, how many doors is it in today versus the eventual target? Secondly, on Big Tic, are you seeing any evidence of a halo effect on the broader Fossil brand at accounts that are carrying Big Tic? Thank you very much for the question. Look, we're excited because Big Tic, in particularly Y2K, has been really well covered from the press. We're seeing great sell out. We have chosen a strategy of a very key distribution, in particular with energy retailers, our DTC and stores that we feel like they're driving brand heat and brand demand. Initially, the strategy was to use our incredible archives to drive consumer back into our brand as we've been moving off the, you know, really the promotional activity into a full price selling model, and this is paying off. We will release, we have the Big Tic World Flags coming out now, which is really celebrating some of the big sports moments. In particular, think about the FIFA World Cup or, you know, other events related to countries, which are very exciting. We also have additional movement on Big Tic coming out later this year. This has a 2 effects, continue to drive consumer towards the archives of the brand, and we have a unique history and heritage, but also drives a positive effect around the what we call the icons because it drive a brand heat, drive a brand momentum, and that's really always the goal has always been to build a Big Tic as the brand story, which drive consequently sales across all our icons, and it's paying off. Got it. Thanks. And secondly for me, you know, it sounds like Signature is launching later this year. What does the initial retail door plan look like for Signature? How selective will distribution be? How are you thinking about in-inventory risk at a price point that Fossil's really never operated in before? Great question. Look, we're excited. This is gonna be a limited launch. We're working with strategy of scarcity, we're driving brand heat, we're driving brand demand. We started to show to some of our partners our product. They are excited about the quality of the product. So to your point, we will be very much measured on the inventory we're gonna produce. We will create scarcity. We will make sure that the presence and the way we come up at retail is unique and differentiated. We want this to be the pinnacle with the brand, with the ultimate goal to drive the brand heat credibility in the watch industry as we are a watch company with more than 40 years of history, but also drive sales on our icons. If I can add one thing. While it is a step up from where we're currently selling the majority of our Fossil time pieces, it's worth reminding that we've got a number of other brands, and many of those brands participate at price points significantly higher than where we're aiming to launch Signature. Which suggests that we've got the right supply chain in place to make sure that we're mitigating any sort of risk, buying appropriately. We won't lose the discipline that you can already see on the balance sheet, Owen, with respect to turn. We'll buy it smart, and to Franco's point, scarcity allows us to do that, also drives consumer demand, and is again, a haloing effect for all of the partners that will launch, that will carry it. Great. Super helpful. Lastly for me, you guys previously called out India as, you know, the closest thing to a vertically integrated operation Fossil really has anywhere globally. Can you just give us a sense about how you're feeling about the India business right now, just given some of the ongoing macro concerns in the region? Well, I've got to say, our India business is, one of our strongest assets. We're very pleased with our performances. We called it out as a pillar. We remain not only a leader in the region, but we're very well-performing. We're excited about the opportunities. I think I spent a lot of time down in India. It's a growing industry, and the watch category is very strong, and we have a leading position. Not concerned from our side. We're not immune from what is happening in the world, but we know our business, and we have a competitive advantage there with probably one of the best team in the industry, and we've seen great momentum. Awesome. Thanks for taking my questions, guys. Thank you, Owen. Thank you very much. Thank you. There are no further questions at this time, so I will now turn the call back to management for the closing comments. Please go ahead. Thank you everyone for joining today. We're pleased with our turnaround progress, and we look forward to updating everyone on our Q2 earnings call. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.