While the brand earnings fell a massive 23%, it remains upbeat about holiday season sales. WGSN Senior Editor Petah Marian reports
Hugo Boss is banking on a stronger Christmas trading quarter with the German fashion house saying Tuesday that a slowdown in China and the US hurt its Q3 earnings. They fell a massive 23%.
Hugo Boss based its upbeat outlook on the assumption that sales at its own stores would remain stable or increase following October improvements that saw womenswear sales continue to impress under the direction of Jason Wu.
Last month Hugo Boss cut its 2015 sales and profit outlook due to weakness in China. It stood by that outlook Tuesday, saying it expects sales and core profit to each rise 3-5% on a currency-neutral basis.
In Q3, net profit fell to €88.5m/€1.28 a share from €114.7m/€1.67 a year earlier. Ebitda fell 8% to €168m, in line with the preliminary figures.
Revenue increased 4% to €744m, but declined 1%, currency adjusted. Sales from its own stores rose 6% in local currencies and were stable currency neutral, helped by 20% currency-adjusted growth in online sales. By contrast, wholesale revenues fell 7%.
Womenswear sales rose 6% in Q3 in local currencies, while menswear fell 1%. Gross profit margins also lifted in Q3
Hugo Boss has been investing heavily in expanding its own retail network, opening 64 new stores in the first nine months to take its total to 1,105.
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