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Hugo Boss sales pick up at stores, online and in US
[BERLIN] German fashion house Hugo Boss reported an acceleration in currency-adjusted sales in the fourth-quarter, driven by a rebound in growth at its stores, a jump in online sales and a recovery in the United States.
After a string of profit warnings and falling sales in China and the United States, Hugo Boss revamped its core brands to appeal to younger buyers, slashed prices in China, closed loss-making stores and overhauled its website.
Hugo Boss said sales rose one per cent to 735 million euros (S$1.19 billion), a currency-adjusted rise of 5 per cent, compared with average analyst forecasts on Thomson Reuters Eikon for 732 million euros. It reports full figures on March 8.
Hugo Boss shares, up more than a quarter in the past year and narrowing the discount to luxury peers like LVMH and Burberry, were up two per cent at 0828 GMT, making it one of the biggest gainers on the German mid-cap index.
RBC analyst Piral Dadhania said growth in Asia Pacific was better than expected and the Americas was also strong but Europe was weaker due to a 5 per cent fall in the wholesale business.
"2018 should see further improvements as the brand moves towards its BOSS and HUGO label structure and continues to improve its e-commerce offer," he wrote.
Sales from its own retail business rose 7 per cent in the quarter on a same-store basis, and it saw growth of 11 per cent in the United States, where it has been making efforts to move the brand more upmarket by stopping selling in discount outlets.
It also said online sales, which fell in the first quarter, jumped 42 per cent after it improved its website, boosted its ranking on search engines and offered more lower-priced garments.
Sales rose a currency-adjusted 10 per cent in the Asia-Pacific region, driven by China, where luxury goods companies including France's LVMH and Kering have benefitted from revived consumer appetite.
Hugo Boss said it expected its 2017 earnings before interest, taxation, depreciation and amortisation (EBITDA) before special items to come in at about the 493 million euros it reported for 2016, in line with its forecast.