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Hugo Boss Reaffirms 2023 Outlook amid Luxury Downturn, Shares Rise

FILE - 08 March 2022 - The logo of the Hugo Boss fashion group, taken at an outlet store at the company's headquarters in Metzingen. dpa
FILE - 08 March 2022 - The logo of the Hugo Boss fashion group, taken at an outlet store at the company's headquarters in Metzingen. dpa
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Hugo Boss Reaffirms 2023 Outlook amid Luxury Downturn, Shares Rise

FILE - 08 March 2022 - The logo of the Hugo Boss fashion group, taken at an outlet store at the company's headquarters in Metzingen. dpa
FILE - 08 March 2022 - The logo of the Hugo Boss fashion group, taken at an outlet store at the company's headquarters in Metzingen. dpa

Hugo Boss on Thursday reaffirmed its full-year outlook after posting quarterly results in line with analysts' expectations, supported by strong demand for its products despite a broader downturn in the luxury sector, Reuters reported.
The German fashion house reported a 15% rise in third-quarter sales to 1.03 billion euros ($1.09 billion), spurred by the launch of its fall/winter 2023 collections in August. Analysts had forecast sales of 1.02 billion euros in a poll provided by the company
"Hugo Boss remains one of the few fashion brands still growing in double-digits," Citi analysts said in a note to investors, citing successful product design and diversification and effective marketing among other factors.
Shares were up 4.8% at 0920 GMT. As of Wednesday's close, the stock was 27% off their highest price so far this year, which was reached in July.
The luxury sector, hit by slowing demand for fashion and accessories particularly in the US and Europe, has been further hampered by a slow start to the European fall/winter season amid unusually warm weather.
Hugo Boss, however, had started the fourth quarter strong, CEO Daniel Grieder told reporters in a call.
The company reiterated its annual guidance for sales of 4.10-4.20 billion euros and an operating profit of 400-420 million euros, corresponding to 20%-25% growth.
Its quarterly earnings before interest and taxes (EBIT) rose 12% to 103 million euros, matching analysts' estimate of 102 million euros.

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Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
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Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)

Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half, as the French luxury group struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending.

Sales at the French luxury group which owns labels Gucci, Boucheron and Balenciaga, fell to 4.5 billion euros ($4.9 billion), an 11% drop on an organic basis, which strips out currency effects and acquisitions.

The figure was below analyst expectations for a 9% drop, according to a Visible Alpha consensus.

It also said second-half operating income could fall by around 30%, following a 42% drop in the first half.

Sales at Gucci fell 19%, showing no improvement from the first quarter, and below analyst expectations for a 16% decline, according to a Visible Alpha consensus.

Kering has been revamping Gucci, the century-old Italian fashion house which accounts for half of group sales and two-thirds of profit.

Minimalist designs from new creative director Sabato de Sarno, which began trickling into stores earlier this year, are key to the design reset and push upmarket, in a bid to cater to wealthier clients who are more immune to economic headwinds.

Kering chief financial officer Armelle Poulou told reporters that the designs had been well received and the rollout was on track.

But the efforts have been complicated by a downturn in the global luxury market, while China's rebound - traditionally Gucci's most coveted market - was clouded by a property crisis and high youth unemployment as Western markets came down from a post-pandemic splurge.

Earnings from sector bellwether LVMH on Tuesday missed expectations as sales rose 1%, offering few signs that a pickup is around the corner, sending shares in luxury goods companies down on Wednesday. Kering traded at its lowest level since 2017.