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.