Deterioration of the market environment in Asia and a slowdown in the Americas weighed on sales and earnings performance of German fashion brand Hugo Boss in the third quarter of 2015
The company said its sales were marked by “high levels of volatility” in the third quarter to September 30. The group’s own retail business in particular developed unevenly over the period.
“While performance in Europe remained strong and in line with original expectations, momentum in Asia and the Americas deteriorated considerably towards the end of the period. This was due to sales declines in China as well as a negative development in the Group’s US own retail and wholesale businesses,” the company said in a statement.
“Weaker demand from tourists contributed to the slowdown in the US.”
Third quarter group sales declined one per cent, excluding currency effects. Expressed in euros, they increased by four per cent to euro 744 million. Own retail same store sales remained stable year on year in local currencies.
“Due to particularly challenging sales trends in the group’s directly operated stores as well as continued investments in the medium- and long-term growth potential of Hugo Boss, EBITDA before special items declined by eight per cent to euro 168 million in the third quarter, on a preliminary basis,” the company reported.
“In addition, the group’s financial result was impacted by a negative charge of around euro 16 million related to adverse exchange rate movements of the Brazilian Real and the Swiss Franc in particular.”
In light of weaker than expected trading in the third quarter, the group now forecasts sales and EBITDA to both increase between three and five per cent on a currency-adjusted basis in the full year.
“This outlook is based on the assumption that fourth quarter retail comp store sales will remain stable or develop positively compared to the prior year quarter.”