GERMANY: Hugo Boss confirms FY forecast as Q3 slips
- Core Q3 earnings down 7% to EUR165m
- Sales were flat at EUR646m
- Confirms outlook for 2012
German fashion house Hugo Boss today (30 October) said it is confident of meeting its full-year targets, despite booking flat sales and a fall in earnings in its third-quarter.
The company blamed a change in the number of collections it produces for shifting wholesale sales from the third to the fourth quarter.
"This had an adverse impact on our traditionally strong earnings in the third quarter," said CEO Claus-Dietrich Lahrs.
"We shall, however, return to double-digit growth in sales and earnings in the fourth quarter with our winter business."
The group said core earnings before interest, tax, depreciation, amortisation (EBITDA) and special items dropped 7% to EUR165m (US$213.8m), from EUR177m a year ago, as it took a hit from higher costs of retail expansion and marketing.
Sales were flat on a currency-adjusted basis in the third quarter at EUR646m, with a 4% drop in Europe. The US drove growth in the Americas with a gain of 13%, while sales in China rose 5%.
Wholesale sales were down 9% year-on-year in local currencies, and the group's own retail business saw gains of 15% after adjustment for currency effects. On a comparable store basis, the increase amounted to 2%.
Higher retail sales also helped lift gross profit margin by 130 basis points to 60.1%.
Hugo Boss said it expects currency-adjusted sales to grow by up to 10% in the full year, led by double-digit gains in its own retail business.
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