Hugo Boss has witnessed a notable decline in its financial performance amid diminishing global consumer demand.
- Operating profits for Hugo Boss plunged by 42% to €70m in the second quarter, attributed to weakening consumer demand.
- Group sales saw a marginal 1% decrease, with significant impacts noted in China and the UK due to macroeconomic and geopolitical challenges.
- The company’s revised annual forecast now anticipates a more modest sales growth of 1% to 4%, down from the previously expected 3% to 6%.
- CEO Daniel Grieder emphasised the challenging global market environment but reaffirmed the company’s commitment to capturing market share and enhancing productivity.
German fashion brand Hugo Boss reported a significant downturn in its operating profits, which fell by 42% to €70 million in the second quarter. This decline arises in the wake of weakened consumer demand, a factor that has compelled the company to adjust its sales and profit outlook for the year.
Group sales experienced a slight reduction of 1% year-on-year, amounting to €1.01 billion. This downturn was majorly influenced by persisting macroeconomic and geopolitical challenges that adversely affected global consumer demand. Key markets, particularly China and the UK, suffered substantial impacts during this period.
While the Americas demonstrated a positive trajectory with a 5% increase in currency-adjusted sales, attributed to Hugo Boss’ strategic lifestyle positioning, this growth was not sufficient to counterbalance declines elsewhere. Notably, sales dropped by 2% in the EMEA region, reflecting a soft consumer sentiment in the UK and a slowdown in Germany and France. Meanwhile, the Asia Pacific region recorded a 4% decrease in sales, largely due to diminished consumer confidence in China.
The company’s revised financial forecast for 2024 now predicts a sales increase of between 1% and 4%, marking a decrease from the previous projection of 3% to 6%. This adjustment translates to anticipated sales of €4.20 billion to €4.35 billion, down from earlier expectations of €4.30 billion to €4.45 billion.
Hugo Boss also revised its EBIT forecast for the full year, now expecting results to fall within a range of -15% to +5%, equating to €350 million to €430 million. This contrasts with earlier projections suggesting an uptick of between 5% and 15% to between €430 million and €475 million. CEO Daniel Grieder commented on the deteriorating global market environment, noting that the slowdown in growth impacted most of the industry. However, he expressed optimism in the company’s potential to surpass market trends by focusing on growth, market share acquisition, and productivity improvements.
Despite the challenging landscape, Hugo Boss remains committed to sustaining growth and enhancing productivity amidst global market pressures.
