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Hugo Boss stagnated in the third quarter. In particular, the contraction in China cost the German fashion group profits, but major cost reductions should improve matters.
Hugo and Boss forge closer ties
After a weak second quarter, Hugo Boss stabilised in the third quarter. Sales remained at the same level as a year ago, at 1.03 billion euros. The German company is suffering from macroeconomic and geopolitical uncertainties, particularly in China. In the Asia-Pacific region, sales fell by 7%, compared with 1% growth in the EMEA region.
Profits held up less well. Operating profit (EBIT) fell by 7% to 95 million euros, while net profit dropped by 12% to 56 million euros. Nevertheless, Hugo Boss expects the cost-cutting measures it has taken to bear fruit soon. Productivity and efficiency have improved all throughout the company, says CEO Daniel Grieder. He also wants to strengthen the ties between the Hugo and Boss brands.
For the year as a whole, Hugo Boss now expects sales growth of between 1% and 4%. Operating profit will be between 350 and 430 million euros, as the fashion group has already recalculated after a disappointing second quarter.
