German fashion house Hugo Boss raised its 2023 profit outlook on Thursday, forecasting stable gross margins and more efficiency gains from its global store network this year.

The company expects its operating profit (EBIT) to rise between 10 percent and 20 percent to €370-400 million ($410-$443 million) in 2023, compared with the previously expected 5 percent to 12 percent growth.

Analysts had forecast an EBIT of €377 million for 2023 in a poll provided by the company.

Hugo Boss shares were up 1.7 percent in early Frankfurt trade.

The group also expects its sales to grow by about 10 percent to around €4 billion in 2023, after a double-digit jump in the first quarter.

It had previously forecast mid-single-digit growth for this year and to reach the €4 billion mark in 2025.

Quarterly sales surged 25 percent to €968 million, beating analysts’ estimate of €893 million.

The increase was driven by growth in all its regions and channels as robust consumer demand persisted, the company said.

In the Asia-Pacific region, the group saw a significant pick up in consumer sentiment in China, as the market reopened from extended Covid-19 restrictions.

The world’s top consumer and luxury goods companies have sounded upbeat about China’s recovery, seeing sales of everything from cosmetics to condoms increase since Beijing ended strict Covid curbs.

Hugo Boss’s sales in China rose 25 percent on a currency-adjusted basis in the first quarter.

By Linda Pasquini and Elizaveta Gladun; Editors: Milla Nissi and Mark Potter

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