Hugo Boss Q4 core profit rises as Europe offsets weak U.S., China

German fashion house Hugo Boss  said on Friday it would take measures to cope with weak markets in China and the United States, where its sales slid in the fourth quarter, causing it to report weaker than expected core profit.

Hugo Boss

Group earnings before interest, tax, depreciation and amortisation (EBITDA) before special items rose 2 percent to 171 million euros ($187 million) in the three months through December, below Hugo Boss’s own forecast for 3-5 percent growth, after it had to discount goods to entice cautious shoppers.

Sales were up 5 percent adjusted for exchange rate changes, driven by a 10 percent gain in Europe.

Revenues from the Americas were meanwhile down 1 percent, with trends in the U.S. market virtually unchanged from a weak third quarter, and declines in China were in the double-digits in local currencies, the company said.

“We will take decisive action to improve our business in China and the U.S. despite the difficult industry conditions we are facing in these markets,” Chief Executive Claus-Dietrich Lahrs said in a statement, without being more specific.

Shares in Hugo Boss turned positive on the news, rising 4.4 percent to 74 euros by 1517 GMT, making it the biggest riser on Germany’s 2.9 percent weaker mid-cap index, but still far from highs of 120 euros reached last April.

Hugo Boss is due to publish a full set of fourth-quarter results on March 10.

$1 = 0.9139 euros

 

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