The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
METZINGEN, Germany — Hugo Boss AG said full-year sales and profit will be at the lower end of its guidance range as it struggles to sell its clothes in the US.
Revenue in the second quarter, adjusted for currency swings, declined by 5 percent in the US, Boss said Thursday. The suit-maker cited weak sales to tourists and a high level of discounting by apparel retailers, among other factors.
The shares fell as much as 3.8 percent in early Frankfurt trading, their biggest intraday decline in two months.
The US decline pared companywide revenue growth to 2 percent in the quarter and prompted Boss to say sales and earnings will only reach the lower end of its guided range for the full year.
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The company had already reported a plunge in first-quarter earnings amid the weakness in the U.S., in a setback for Chief Executive Officer Mark Langer’s turnaround plans.
Sales in Europe and the Asia-Pacific region rose in the second quarter, Boss said, and operating profit should “significantly accelerate” in the second half after rising 3 percent in the latest three months.
By Richard Weiss; editors: Erhard Krasny and Eric Pfanner.
The luxury goods maker is seeking pricing harmonisation across the globe, and adjusts prices in different markets to ensure that the company is”fair to all [its] clients everywhere,” CEO Leena Nair said.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.