• Q3 net income falls 25% to EUR51.5m
  • Quarterly sales tumble 15.5%
  • Sees sales slowdown continuing for FY

German fashion firm Hugo Boss today (2 November) posted a 24.8% drop in third quarter net income amid a continuing slowdown in demand for luxury goods, and said it doesn't expect to see profitable growth until next year.

For the three months to 30 September, profit fell to EUR51.5m (US$76m), from EUR68.5m in the same period last year.

Quarterly sales dropped to EUR450.4m from EUR533.0m, a fall of 15.5%.

However, the company said it has "held its ground well" so far this year, with overall sales down 9% to EUR1.24bn from EUR1.36bn last time.

Cost cuts and reorganisation - including reducing the complexity of its collections to save production and logistics costs, and better materials management - have also helped keep operating profit margin flat with last year's level of 18%.

The Group added that its own retail operations made a positive contribution to nine-month sales whereas wholesale revenues fell.

Regionally, the biggest slowdown was in Europe, where sales fell by 13% to EUR852m in the first nine months of the year.

In the Americas, sales rose 2% to EUR233m, with declines in North America offset by a 32% jump in Central and South America.

Asia/Pacific revenues were flat with last year at EUR122m, although revenues at Hugo Boss' own retail operations in China more than tripled.

Looking ahead the company said: "Due to the extremely weak overall global economic situation, Hugo Boss expects a declining sales development on the level of the first three quarters for the remaining fiscal 2009."

Management also sees adjusted operating margin for the year at last-year's level, and expects a first positive upswing in 2010.