Hugo Boss AG, the German fashion house whose artistic director has clothed Michelle Obama, lowered its sales and operating profit targets for the year due to a “substantial slowdown” in European demand.
Hugo Boss S/S 2014 men’s campaign | Source: Hugo Boss
FRANKFURT, Germany — Hugo Boss AG, the German fashion house whose artistic director has clothed Michelle Obama, lowered its sales and operating profit targets for the year due to a “substantial slowdown” in European demand.
Revenue this year will rise 6 percent to 8 percent on a currency-adjusted basis, down from a previous forecast for high- single-digit growth, the Metzingen-Germany based company said today in a statement. Operating profit will increase 5 percent to 7 percent, also down from a prior high-single-digit forecast.
“Over the last few weeks, our business has been increasingly feeling the effects of weak performance of the sector in Europe and uncertainties in Asia,” Chief Executive Officer Claus-Dietrich Lahrs said in the statement. “That said, we are still confident of being able to achieve full-year sales and earnings growth and thus, outpace the luxury goods sector as a whole.”
Lahrs is trying to expand sales amid sluggish fashion sales in Europe and social unrest in Hong Kong that’s damping demand. Boss is expanding the number of company-owned stores, holding the line on luxury pricing and making a bigger push into women’s wear.
Sales in China have been weak and Hong Kong “is likely to have deteriorated” given pro-democracy protests this fall, Thomas Chauvet, an analyst at Citigroup, said in an Oct. 16 note to clients.
By: Aaron Ricadela; editors: Kenneth Wong, Thomas Mulier and Celeste Perri.
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