Hugo Boss sees results at lower end of guidance as Q3 sales slip

(Sharecast News) - German fashion brand Hugo Boss has said it expected annual sales and profits to be at the lower end of guidance following a softer third-quarter performance as sales slipped compared with last year. Full-year group sales and earnings before interest and tax are now expected be at the bottom end of the €4.2bn-4.4bn and €380m-440m targets due to "heightened macroeconomic volatility and significant currency headwinds", the company said on Tuesday.

Group sales were 4% lower year-on-year in the third quarter at €989m, but would have been down 1% if currency movements are excluded.

BOSS Menswear sales were flat on a FX-adjusted basis at €764m, though the smaller womenswear division experienced a 9% drop to €67m, while the HUGO brand saw a 5% decline to €158m.

In terms of geographic mix, the Americas was the only region to show growth, at 3% on an FX-adjusted basis to €223m. However, the larger EMEA region experienced a 2% decline to €641m, while Asia-Pacific sales fell 4% to €101m.

Nevertheless, a 100-basis point improvement in the gross margin - due to efficiency gains in sourcing and lower freight costs - meant that net profits were 7% higher year-on-year at €60m.

"Despite ongoing global market volatility in Q3, we remained focused on our strategic priorities, emphasising long-term brand strength over short-term gains," said chief executive Daniel Grieder.

Shares were 3.4% lower at €36.60 by 0903 in Frankfurt.