A window display is seen at the Boss store in London, Britain, May 30,2024. REUTERS
Nov 4(Reuters) – German fashion group Hugo Boss on Tuesday reported quarterly sales below expectations, citing softer demand in Britain and China.
The company said full-year sales and operating profit would likely come in at the lower end of its guidance, in line with analysts’ forecasts, as “heightened macroeconomic volatility” and adverse currency movements continued to weigh on performance.
The group’s sales fell 4% to 989 million euros ($1.15 billion) in the third quarter, hit by a weaker U.S. dollar. That was below analysts’ forecast of 1.01 billion euros in a company-provided poll,.
Excluding the impact of currency changes, sales fell 1%, dragged by lower revenues in its key markets China and Britain. That weakness outweighed improvements in Germany, France and the U.S., it said.
The group also flagged a sales decline in the brick-and-mortar wholesale business, citing the timing of deliveries.
Its gross margin, however, rose to 61.2% of sales, compared to 60.2% the year before, and above analysts’ expectations of 60.5%, helped by cost cuts and lower global freight rates, the company said.
It expects group sales and earnings before interest and taxation (EBIT) this year to come in at the lower end of its target ranges of between 4.2 billion and 4.4 billion euros for sales and between 380 million and 440 million euros for operating profit.
“The guide (was) lowered less than feared,” analysts at Jefferies wrote in a note to clients.
($1 = 0.8575 euros)
Reporting by Linda Pasquini in Gdansk, editing by Matt Scuffham and Louise Heavens
