Sales, earnings beat forecasts at Hugo Boss

(Sharecast News) - Germany's Hugo Boss posted a slide in quarterly sales and profits on Tuesday, although the decline was not as sharp as analysts had feared.

Posting first-quarter numbers, the fashion brand said group sales fell 9% to €905m, or by 6% on a constant currency basis, reflecting a planned brand and channel realignment. Sales fell particularly sharply in EMEA - by 8% - and in the Americas, where they fell 5%.

Earnings before interest and tax tumbled to €35m from €61m a year previously. However, analysts had expected a sharper decline, to €30m. Revenues were also higher than the €887m forecast.

Chief financial officer Yves Muller said: "Overall, we are pleased with the progress made in the first quarter. At the same time, we recognise that there is a more work ahead and we remain cautious on the near-term visibility given a highly volatile macroeconomic and geopolitical environment."

The Middle East accounts for around 3% of group revenues, with stores primarily in the UAE and Qatar. Hugo Boss said that since the outbreak of war, store traffic in the region had declined "sharply" from March onwards.

Muller added: "In addition to these direct effects, developments in the Middle East also contributed to increased uncertainty more broadly. In particular, we observed early signs of a softening in consumer sentiment in selected markets, alongside some moderation in international travel flows."

However, the company reiterated its full-year outlook, for currency-adjusted group sales to decline by mid-to-high single digits and EBIT of between €300m and €350m.

Daniel Grieder, chief executive, said: "Against an increasingly challenging external backdrop, we remain firmly focused on executing our strategy, actively managing the business with flexibility and discipline."

As at 1345 BST, the Frankfurt-listed stock was broadly unchanged.