Hugo Boss is stable (+1% for the quarter), but profits disappoint

Hugo Boss è stabile (+1% nel trimestre), ma l’utile delude

Hugo Boss is “stable” but improves the forecasts. The last quarter closed on September 30th, and the German brand sold goods for 720 million euro: +1% at current rates. Yet, net profits fell to 56 million euro, from the 66 million of the previous year, thus disappointing the expectations of analysts, set at 75 million euro (estimate by FactSet). Operating income for the quarter was also disappointing: it dropped 13% (80 million euro), again lower than the expectations.

The Causes

Among the main reasons behind the decrease of sales, Boss cites the North American environment in a note. “It has further deteriorated. Beside from the lower internal demand, sales generated thanks to tourists also decreased in this marketplace”. In the Asia/Pacific region, revenue grew by 2% at current rates. Beijing does well, growing at a “double-digit rate”, and compensated for the decrement in Hong Kong due to the protests. Meanwhile in Europe, the UK environment does well, while the domestic market (Germany) does poorly. The company does highlight the positive performance of its online segment: +36%. Hugo Boss expects its fourth quarter to have “significantly higher sales and operating profits”.

The first 9 months

During the first ¾ of the year, Hugo Boss sold 2.059 billion euro of merchandize: +1% at constant rate and +2% at current rates. In September, the brand with 14,700 employees and over 400 stores, had lowered its forecasts for 2019.

 

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