Pedestrians walk in front of a store of German luxury fashion house Hugo Boss at Shenzhen Bao’an International Airport.
Alex Tye | SOPA Images | LightRocket | Getty Images)
Hugo Boss shares plunged as much as 10 percent on Tuesday after the company cut its sales outlook, becoming the latest high-end fashion brand to warn of a prolonged downturn in the luxury industry.
The German fashion house said on Monday it now expects full-year sales of up to 4.35 billion euros ($4.73 billion), down slightly from an earlier forecast of up to 4.45 billion euros.
The company said the revised outlook was due to “ongoing macroeconomic and geopolitical challenges,” with China and the UK being particularly difficult markets.
Shares pared losses slightly to stand down 9.3% as of 9:06 a.m. London time.
“We operate during a period of significant macroeconomic uncertainty globally, which impacted our second quarter results,” CEO Daniel Grieder said in a statement.
“While the timing of a macroeconomic recovery remains uncertain, our strategy of continuing to invest in our strong Boss and Hugo brands gives us confidence that we will be able to continue our above-trend growth and gain additional market share,” he added.
It is the second time the company has cut its guidance this year, having said in March that sales growth could slow to 3-6 percent in 2024. Monday’s revision further relaxed its target for growth of 1-4 percent in group currencies.
Hugo Boss said on Monday its second-quarter group sales provisionally fell 1 percent to 1.02 billion euros, mainly due to declines in Asia and Europe.
In its interim report, the company said second-quarter operating profit fell 42 percent from a year earlier to 70 million euros, reflecting “softening sales trends and strategic investments in the business.”
Grieder said he expects the company to return to profitable growth later this year.
