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Hugo Boss Expects 2024 Operating Profit Below Market Expectations 

The Hugo Boss logo is seen on a store in Metzingen, Germany, June 16, 2017. (Reuters)
The Hugo Boss logo is seen on a store in Metzingen, Germany, June 16, 2017. (Reuters)
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Hugo Boss Expects 2024 Operating Profit Below Market Expectations 

The Hugo Boss logo is seen on a store in Metzingen, Germany, June 16, 2017. (Reuters)
The Hugo Boss logo is seen on a store in Metzingen, Germany, June 16, 2017. (Reuters)

Hugo Boss on Thursday forecast operating profit for 2024 below market expectations, as it flagged persistently weak consumer confidence, in particular in distinct European economies.

The German fashion house estimates earnings before interest and taxes (EBIT) of 430 million to 475 million euros, below analysts' estimate of 490 million euros ($534.1 million) in a company-provided poll.

Hugo Boss continued reaping the fruits of its 2022 brand revamp last year, which brought in new customers in Asia and helped it maintain sales momentum despite weakening demand in Europe.

However, unfavorable currency effects coupled with an increasingly promotional market dampened margin improvement at the end of 2023, the company said.

The luxury and apparel sector had to discount products in the last months of the year, as companies aimed to cut down their inventories amid slowing demand.

Hugo Boss forecast sales growth of between 3% and 6% in 2024 to around 4.30 billion to 4.45 billion euros, also below an estimate of 4.56 billion euros in a company-provided poll, and a marked slowdown compared to a 18% rise in sales in 2023.

The company confirmed its preliminary figure for an operating profit of 410 million euros in 2023.

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Fashion

Gap's Turnaround Efforts Drive Quarterly Beat in Surprise Early Announcement

FILE PHOTO: The Gap logo is seen on the front of the company's store on Oxford Street in London, Britain, July 1, 2021. REUTERS/John Sibley/File Photo
FILE PHOTO: The Gap logo is seen on the front of the company's store on Oxford Street in London, Britain, July 1, 2021. REUTERS/John Sibley/File Photo
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Gap's Turnaround Efforts Drive Quarterly Beat in Surprise Early Announcement

FILE PHOTO: The Gap logo is seen on the front of the company's store on Oxford Street in London, Britain, July 1, 2021. REUTERS/John Sibley/File Photo
FILE PHOTO: The Gap logo is seen on the front of the company's store on Oxford Street in London, Britain, July 1, 2021. REUTERS/John Sibley/File Photo

Gap on Thursday surpassed Wall Street expectations for the second quarter, as a surprise early announcement of its results showed shoppers turned to its Old Navy and namesake brands to snap up trendy and fashionable clothing.
Shares of Gap closed up nearly 2% at $22.8. The stock was halted during the day following a Bloomberg News report that said the apparel retailer's earnings press release and presentation appeared on its website in the morning, hours earlier than scheduled.
A Gap spokesperson told Reuters that the company's results were briefly and accidentally posted on its website due to an administrative error. It was originally scheduled to release the numbers after the bell.
The Banana Republic owner is in the midst of a brand turnaround under CEO Richard Dickson and has been ramping up its stores with fresher and more chic styles to bring back lost customers.
Dickson on a post-earnings call said Gap's consumer base has broadened and the company is seeing more sell-throughs at full-price, resulting in less discounting.
People, who are otherwise saving dollars and curbing spending on big-ticket items, are more than willing to go all out and spend on in-trend footwear and clothing such as those from Abercrombie & Fitch, Roger Federer-backed On and Deckers Outdoor's Hoka.
"(Gap) is being managed better than it was ... it is not like all four brands are really completely healthy, but they are trending in the right direction under the new management," Morningstar analyst David Swartz said.
Comparable sales at Old Navy rose 5% during the quarter, while the Gap brand posted 3% growth. Banana Republic sales, however, were flat as the brand continues to focus on fixing the fundamentals and improve its pricing and assortment architecture.
Gap's second-quarter net sales rose 5% to $3.72 billion, beating LSEG estimates of $3.63 billion.
It earned 54 cents per share, also topping analysts' average estimate of 40 cents.
The apparel retailer reaffirmed its annual net sales forecast and expects gross margin to expand by about 200 basis points versus its prior forecast of at least a 150-basis-point increase.