Warranty Liabilities

12 Months Ended

Dec. 28, 2019

Product Warranties Disclosures [Abstract]

The Company's warranty liabilities are primarily related to watch products and are included in accrued expenses—other in the consolidated balance sheets. The Company's watch products are covered by limited warranties against defects in materials or workmanship. Historically, the Company's FOSSIL^® and RELIC^® watch products sold in the U.S. have been covered for warranty periods of 11 years and 12 years, respectively, and SKAGEN brand watches have been covered by a lifetime warranty. Beginning in 2017, these brands are covered by a two year warranty. Generally, all other products sold in the U.S. and internationally are covered by a comparable one to two year warranty. The Company's warranty liability is estimated using historical warranty repair expense. As changes occur in sales volumes and warranty costs, the warranty accrual is adjusted as necessary. Due to the nature of connected products, their warranty costs are usually more than traditional products. A shift in product mix from traditional to connected products generally results in an increase in the Company's warranty liabilities. Warranty liability activity consisted of the following (in thousands):



Fiscal Year	2019			2018			2017
Beginning balance	$	22,807		$	19,405		$	15,421
Settlements in cash or kind	(18,073		)	(15,197		)	(15,177		)
Warranties issued and adjustments to preexisting warranties⁽¹⁾	18,361			18,599			19,161
Ending balance	$	23,095		$	22,807		$	19,405

____________________________________________

⁽¹⁾

Changes in cost estimates related to preexisting warranties are aggregated with accruals for new standard warranties issued and foreign currency changes.