Hugo Boss sees a fall in operating profit
The German fashion house has flagged persistently weak consumer confidence in distinct European economies
Gdansk — Hugo Boss on March 7 forecast operating profit for 2024 below market expectations, as it flagged persistently weak consumer confidence, in particular in distinct European economies.
The German fashion house estimates earnings before interest and taxes (Ebit) of €430m to €475m, below analysts’ estimate of €490m ($534.1m) in a company-provided poll.
Hugo Boss continued reaping the fruits of its 2022 brand revamp in 2023, which brought in new customers in Asia and helped it maintain sales momentum despite weakening demand in Europe.
However, unfavourable currency effects coupled with an increasingly promotional market dampened margin improvement at the end of 2023, the company said.
The luxury and apparel sector had to discount products in the last months of the year, as companies aimed to cut down their inventories amid slowing demand.
Hugo Boss forecast sales growth of between 3% and 6% in 2024 to about €4.30bn to €4.45bn, also below an estimate of €4.56 bn in a company-provided poll, and a marked slowdown compared to a 18% rise in sales in 2023.
The company confirmed its preliminary figure for an operating profit of €410m in 2023.
Reuters