Hugo Boss cuts yearly profit prediction amid declining Q2 performance
Date
7/16/2024 8:44:47 AM
(MENAFN) German luxury fashion company Hugo Boss has revised its full-year earnings forecast downward following weak second-quarter results and a significant drop in operating profit. The company’s shares fell by 9 percent in trading after it reported a nearly 40 percent decline in operating profit. During the second quarter, Hugo Boss saw its sales decrease by 1 percent year-on-year to €1.01 billion (USD1.10 billion). The operating profit before interest and taxes fell sharply by almost 40 percent to €70 million, which the company attributed to a 21 percent increase in marketing expenses and a 12 percent rise in store operating costs.
In response to these challenges, Hugo Boss has adjusted its forecast for the current fiscal year. The company now expects sales to grow by only 1-4 percent, reaching between €4.2 and €4.35 billion, down from its previous forecast of 3-6 percent annual sales growth. Additionally, it anticipates operating profits to range between €350 and €430 million for the year.
The company cited ongoing unfavorable macroeconomic conditions and geopolitical issues as key factors contributing to its weak second-quarter results and the downward revision of its full-year expectations. Hugo Boss specifically pointed out persistent difficulties in both Britain and China, which are two of its major markets, as contributing to the reduced global demand affecting its performance.
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