Hugo Boss said muted consumer sentiment was having an effect on its business in this quarter as it forecast 2025 sales broadly in line with last year’s level on Thursday.
The upmarket fashion company has sought to boost the popularity of its brand through selected marketing investments, while increasing profits by limiting costs, despite weakening consumer demand and a polarisation of consumer preferences towards either high-end luxury or cheaper fast-fashion offers.
It sees annual sales development between a 2% decline and a 2% increase, to a range of €4.2bn-€4.4bn, after 3% growth to €4.3bn in 2024.
“Macroeconomic and geopolitical volatility remains high, weighing on consumer sentiment and impacting our business performance since the beginning of the year,” CEO Daniel Grieder said in a statement.
Analysts had estimated annual sales of €4.26bn for 2024 and €4.44bn for 2025, a company poll showed.
The Hugo Boss shares were up 3.8% in early Frankfurt trade despite the cautious comments, with Baader Helvea analyst Volker Bosse pointing to a solid outlook for operating profit.
The company expects full-year earnings before interest and taxes (ebit) to rise 5%-22%, coming in at €380m-€440m, compared with a 12% decline to €361m last year.
At its midpoint, the guidance would imply ebit of €410m against analysts’ estimate of €414m.
The company also said sales growth was “particularly robust” in the last three months of 2024, boosted by a successful holiday season.
Group sales were €1.25bn in the fourth quarter, beating analysts' expectations of €1.20bn, with currency-adjusted sales in the Americas region rising 8% helped by a high single-digit percent uptick in the US market.
“Sales in China remained below the prior year level, reflecting overall muted local consumer demand,” it said.
Reuters
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