Hugo Boss lowers full year guidance following slowdown in luxury market
Hugo Boss has lowered its full year guidance after a slowdown in the luxury market impacted its second quarter sales, particularly in the UK and China.
During the period, the luxury brand’s group sales declined by 1% currency-adjusted to €1.015 billion as revenue climbed by 5% in the Americas and declined by 2% and 4% respectively in its EMEA and Asia/Pacific markets.
Revenues fell by 2% at retail stores and by 4% online, although the brand’s bricks-and-mortar wholesale channel saw an increase of 5%.
Meanwhile, EBIT came in at €70 million compared to last year’s €121 million due to the softer sales, increased marketing investment, and higher bricks-and-mortar retail costs.
Revised full year sales and profit guidance
Hugo Boss now expects its full year group sales to come in at between €4.20 billion and €4.35 billion compared to a previous forecast of around €4.30 billion to €4.45 billion.
In addition, EBIT is expected to fall in a range of €350 million to €430 million compared to a prior guidance of €430 million to €475 million after taking into account market volatility.
Daniel Grieder, chief executive officer of Hugo Boss, said: “We are operating in a period of significant global macro uncertainty, which also affected our performance in the second quarter.
“Although the timing of any macro recovery remains uncertain, our strategy of consistently investing in our strong brands, Boss and Hugo gives us confidence in our ability to continue driving above-trend growth and capturing further market share.
“By translating this sales performance and focusing even more on operating effectiveness, we have the ability to return to profitable growth in the second half.”
