Hugo Boss sees FY16 operating profit at high end of guidance

Hugo Boss in its preliminary trading update has said that Group sales and profits improved in the fourth quarter and the company made progress in its own retail business in particular. As a result, Hugo Boss now expects operating profit in the full year of 2016 to reach the upper end of the forecast range. In the fourth quarter, Group sales declined by 1 percent on a preliminary basis and adjusted for currency effects. In euro terms, revenues amounted to 725 million euros (769 million dollars), a decline of 3 percent compared to the prior year.

“Fourth quarter results underline that we are on the right track”, says Mark Langer, CEO of Hugo Boss, in a statement, adding, “In China, we completed the turnaround in the second half of the year. In Europe, we held up well in a difficult market environment. We will continue to work intensively on implementing our strategic plans presented in November. We are confident that this will enable us to return to sustainable profitable growth.”

Update on the fourth quarter results

Hugo Boss said, in Europe, sales increased 2 percent on a currency-adjusted basis mainly due to robust growth in the UK. Revenues in Germany were up, too. In the Americas, sales were down 14 percent in local currencies, however, the Asian business was 5 percent above the prior level. In Mainland China, the company achieved comp store sales increases of close to 20 percent adjusted for currency effects.

Sales in the company’s own retail business including online and outlets improved by 4 percent on a currency-adjusted basis but on a comparable store basis, revenues decreased by 3 percent. Sales in the wholesale business were 13 percent below the prior year level in local currencies.

Preliminary full year sales down 4 percent

On a preliminary, non-audited basis, Group sales in the full year amounted to 2,693 million euros (2,857 million dollars), a decline of 4 percent compared to the prior year. On a currency-adjusted basis, the decrease was 2 percent.

The company said, subject to the completion of year-end closing procedures, the Group expects that operating profit (adjusted EBITDA before special items) will reach the upper end of the forecast range. Hugo Boss had confirmed its outlook of a profit decline between 17 percent and 23 percent.

Picture:Hugo Boss