A woman walks past Hugo Boss store logo on a shopping center at the outlet village Belaya Dacha outside Moscow, Russia, April 23, 2016. REUTERS/Grigory Dukor/File Photo
Hugo Boss Jumps as Clothier’s Profit Guidance Brings Relief
Hugo Boss AG shares climbed the most in almost five years after the German clothier said 2016 operating profit was at the upper end of its forecast range, providing a boost for a company mired in falling sales and earnings. The stock rose as much as 9.7 percent to 60.33 euros, the steepest intraday gain since March 14, 2012 and the biggest advance in the MDAX Index of mid-cap shares. The update means an anticipated decline in full-year operating profit will be nearer 17 percent than 23 percent, a range set by the company in August. After years of struggle, Hugo Boss is seeking to revive under the leadership of Mark Langer, the former finance director who was promoted to the role of chief executive officer in May. In November, Langer said the company won’t return to growth until 2018 as it eliminates brands, slows down store expansion and sells more online. Travel with us, drive with us, eat with us. Get our weekly Pursuits newsletter. Business Your guide to the most important business stories of the day, every day. You will now receive the Business newsletter Politics The latest political news, analysis, charts, and dispatches from Washington. You will now receive the Politics newsletter Markets The most important market news of the day. So you can sleep an extra five minutes. You will now receive the Markets newsletter Technology Insights into what you'll be paying for, downloading and plugging in tomorrow and 10 years from now. You will now receive the Technology newsletter Game Plan The school, work and life hacks you need to get ahead. You will now receive the Game Plan newsletter “While we think Hugo Boss is taking steps in the right direction, we think its new strategy will unlikely yield profit growth until 2018 at the earliest,” Claire Huff, an analyst at RBC Capital Markets, said in a note. “Reintroducing entry price products into retail stores under the Hugo brand should be helpful for volumes, however we still believe that Boss faces a number of structural challenges in regard to its overall brand and price positioning.” The company said full-year sales were about 2.69 billion euros ($2.85 billion), down about 4 percent on 2015, or 2 percent on a currency-adjusted basis. For the fourth quarter, the respective declines were about 1 percent and 3 percent. “Fourth-quarter results underline that we are on the right way,” Langer said in the statement. “In China, we completed the turnaround in the second half of the year. In Europe, we held up well in a difficult market environment.” The final 2016 numbers and an outlook will be published on March 9.
Hugo Boss Asia sales rebound
Rebounding Hugo Boss Asia sales have prompted the German fashion retailer to revise its profit outlook. The company’s stock price soared as much as 10 per cent after management said improved sales in Asia and Britain mean its profit decline will be less than previously predicted in the current financial year. Hugo Boss Asia like-for-like sales soared 20 per cent in the latest quarter, after currency adjustments. Asia accounts for about 20 per cent of Hugo Boss’ global sales and after currency adjustment, regional revenues rose 5 per cent in the fourth quarter – a significant turnaround from the 3 per cent decline of the previous quarter. The increase was aided by adjusting pricing more into line with those of the US and Europe. It is now forecasting an operating profit for 2016 which is better than the previously predicted decline of between 17 and 23 per cent. Final results will be revealed on March 9. Rival fashion retailers Gucci and Louis Vuitton have also recently reported improving sales in Mainland China as consumers open their wallets again, encouraged by government policies aimed at boosting local consumption rather than shopping abroad. CEO Mark Langer said in a statement that fourth-quarter results underline the company is on the right track. Total sales fell 3 per cent to 725 million euros (US$769 million), down 1 per cent on a currency adjusted basis, but a far better result than the third-quarter’s fall of 6 per cent. The damage was done in the US where sales fell 14 per cent on a currency-adjusted basis, partly due to the brand’s decision to stop selling in discount and outlet stores. Sales in Europe rose 2 per cent.
Hugo Boss Jumps as Clothier’s Profit Guidance Brings Relief
Hugo Boss AG shares climbed the most in almost five years after the German clothier said 2016 operating profit was at the upper end of its forecast range, providing a boost for a company mired in falling sales and earnings. The stock rose as much as 9.7 percent to 60.33 euros, the steepest intraday gain since March 14, 2012 and the biggest advance in the MDAX Index of mid-cap shares. The update means an anticipated decline in full-year operating profit will be nearer 17 percent than 23 percent, a range set by the company in August. After years of struggle, Hugo Boss is seeking to revive under the leadership of Mark Langer, the former finance director who was promoted to the role of chief executive officer in May. In November, Langer said the company won’t return to growth until 2018 as it eliminates brands, slows down store expansion and sells more online. Travel with us, drive with us, eat with us. Get our weekly Pursuits newsletter. Business Your guide to the most important business stories of the day, every day. You will now receive the Business newsletter Politics The latest political news, analysis, charts, and dispatches from Washington. You will now receive the Politics newsletter Markets The most important market news of the day. So you can sleep an extra five minutes. You will now receive the Markets newsletter Technology Insights into what you'll be paying for, downloading and plugging in tomorrow and 10 years from now. You will now receive the Technology newsletter Game Plan The school, work and life hacks you need to get ahead. You will now receive the Game Plan newsletter “While we think Hugo Boss is taking steps in the right direction, we think its new strategy will unlikely yield profit growth until 2018 at the earliest,” Claire Huff, an analyst at RBC Capital Markets, said in a note. “Reintroducing entry price products into retail stores under the Hugo brand should be helpful for volumes, however we still believe that Boss faces a number of structural challenges in regard to its overall brand and price positioning.” The company said full-year sales were about 2.69 billion euros ($2.85 billion), down about 4 percent on 2015, or 2 percent on a currency-adjusted basis. For the fourth quarter, the respective declines were about 1 percent and 3 percent. “Fourth-quarter results underline that we are on the right way,” Langer said in the statement. “In China, we completed the turnaround in the second half of the year. In Europe, we held up well in a difficult market environment.” The final 2016 numbers and an outlook will be published on March 9.
Hugo Boss Asia sales rebound
Rebounding Hugo Boss Asia sales have prompted the German fashion retailer to revise its profit outlook. The company’s stock price soared as much as 10 per cent after management said improved sales in Asia and Britain mean its profit decline will be less than previously predicted in the current financial year. Hugo Boss Asia like-for-like sales soared 20 per cent in the latest quarter, after currency adjustments. Asia accounts for about 20 per cent of Hugo Boss’ global sales and after currency adjustment, regional revenues rose 5 per cent in the fourth quarter – a significant turnaround from the 3 per cent decline of the previous quarter. The increase was aided by adjusting pricing more into line with those of the US and Europe. It is now forecasting an operating profit for 2016 which is better than the previously predicted decline of between 17 and 23 per cent. Final results will be revealed on March 9. Rival fashion retailers Gucci and Louis Vuitton have also recently reported improving sales in Mainland China as consumers open their wallets again, encouraged by government policies aimed at boosting local consumption rather than shopping abroad. CEO Mark Langer said in a statement that fourth-quarter results underline the company is on the right track. Total sales fell 3 per cent to 725 million euros (US$769 million), down 1 per cent on a currency adjusted basis, but a far better result than the third-quarter’s fall of 6 per cent. The damage was done in the US where sales fell 14 per cent on a currency-adjusted basis, partly due to the brand’s decision to stop selling in discount and outlet stores. Sales in Europe rose 2 per cent.
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