Hugo Boss is upbeat on its full-year

Hugo Boss is upbeat on its full-year

Hugo Boss says it now expects operating profit to reach the upper end of its forecast as the German luxury fashion brand revealed better than expected sales and earnings in its fourth-quarter.

The company is forecasting a drop in adjusted EBITDA of around 17%, compared to its previously guided range of 17-23%.

In a preliminary update, Hugo Boss revealed fourth-quarter sales of EUR725m (US$773.5m), representing a decline of 3% on last year. Adjusted for currency effects, sales fell 1%. For the full year, sales were down 4% to EUR2.69bn. On a currency-adjusted basis, sales were down 2%, meeting the group's target.

The company said group sales and profits improved in the fourth quarter from a year earlier, with progress made in its own retail business in particular, where sales improved 4% on a currency-adjusted basis.

This, however, represented a significantly lower rate compared to earlier in the year, Hugo Boss said. Sales in the wholesale business were 13% below the prior year level in local currencies, with continued efforts to clean up distribution in the US having a material impact on performance.

In Europe, sales were up 2% on a currency-adjusted basis, mainly due to robust growth in the UK. Revenues in Germany were also up, while in the Americas sales dropped 14% in local currencies. The group's Asian business, however, was 5% above the prior level and, in mainland China Hugo Boss achieved a comp store sales increases of close to 20%, adjusted for currency effects.

"Fourth-quarter results underline that we are on the right track", says CEO Mark Langer. "In China, we completed the turnaround in the second half of the year. In Europe, we held up well in a difficult market environment. We will continue to work intensively on implementing our strategic plans presented in November. We are confident that this will enable us to return to sustainable profitable growth."