HUGO BOSS LOWERS FULL-YEAR OUTLOOK AFTER WEAK Q2 PERFORMANCE

FRANKFURT, July 16 (Bernama-dpa) -- German luxury fashion brand Hugo Boss has lowered expectations for the full year after a disappointing second quarter saw operating profit down by some 40 per cent, the company said on Monday.

Second quarter sales dropped by a good one per cent to €1.015 billion (US$1.105 billion) on a currency-adjusted basis, according to the company, reported German news agency dpa.

Earnings before interest and taxes (EBIT) fell by some 40 per cent to €70 million, Hugo Boss said, citing a 21 per cent increase in marketing costs as well as "higher brick-and-mortar retail costs" of 12 per cent.

As a result, the retailer updated its outlook for the full year 2024 and expects group sales to grow by only 1 per cent to 4 per cent, or €4.2 billion to €4.35 billion.

That is down from 3 per cent to 6 per cent growth forecast previously.

Hugo Boss now expects full-year EBIT to reach €350 million to €430 million, ranging between a decline of up to 15 per cent and a maximum of 5 per cent growth.

The company attributed its poor second-quarter performance and lowered expectations to "persistent macroeconomic and geopolitical challenges that are dampening global consumer demand."

Hugo Boss also pointed to key markets like China and the UK where "the overall market environment remained particularly challenging."

The company was also able to log improvements in the second quarter, however, with its inventories shrinking by 7 per cent and the gross margin increasing 50 basis points to 62.9 per cent.

--BERNAMA-dpa