Hugo Boss downgrades expectations amid China, UK weakness

16th Jul 2024 09:03

(Sharecast News) - Shares in German fashion house Hugo Boss were sliding on Tuesday morning, after the company downgraded its sales and earnings projections for the year amid diminished consumer demand, particularly in China and the UK.

The company said it now anticipated full-year sales to range between €4.2bn and €4.35bn, down from the previously-forecasted €4.3bn to €4.45bn.

It also expects its operating profit to be between €350m euros and €430m, a decrease from the earlier estimate of €430m to €475m.

For 2023, the company had reported an operating profit of €410m.

In the second quarter, Hugo Boss's operating profit reached €70m, which fell short of market expectations by 33% according to Deutsche Bank.

The initial guidance for the year, released in March, had already underwhelmed analysts, Reuters reported.

In May, Hugo Boss highlighted weaker demand in China and potential concerns over US consumer sentiment ahead of the presidential elections.

The announcement came in the wake of similar reports from other luxury brands across Europe.

Swiss watchmaking giant Swatch Group, which owns brands including Omega and Tissot, as well as luxury conglomerate Richemont, had reported sluggish demand in China.

On home shores, Burberry Group shares plunged on Monday after it issued a profit warning and cancelled its dividend payment for the year.

At 1227 CEST, shares in Hugo Boss AG were down -9.12% in Frankfurt at €36.69.

Reporting by Josh White for Sharecast.com.