Hugo Boss Third Quarter Operating Profit Beats Expectations on Better Cost Control

New Hugo Boss logo and their website shop are seen in this illustration taken, May 17, 2024. (Reuters)
New Hugo Boss logo and their website shop are seen in this illustration taken, May 17, 2024. (Reuters)
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Hugo Boss Third Quarter Operating Profit Beats Expectations on Better Cost Control

New Hugo Boss logo and their website shop are seen in this illustration taken, May 17, 2024. (Reuters)
New Hugo Boss logo and their website shop are seen in this illustration taken, May 17, 2024. (Reuters)

Hugo Boss' third-quarter operating profit slightly beat market expectations on Tuesday, as the company reported a 1% increase in currency-adjusted group sales amid persistently weak demand in China.

Quarterly earnings before interest and tax (EBIT) were down 7% on the year at 95 million euros ($103.3 million), but above analysts' estimate of 90 million euros in a company-provided poll, helped by cost management, it said.

Hugo Boss shares were indicated 2.5% higher in Lang & Schwarz premarket trade.

"Estimates for the coming quarter should be anchored today," analysts at Jefferies wrote in a note to clients, highlighting improved sales in September, better cost control and Hugo Boss' confirmed guidance for the year.

After a 2022 brand revamp boosted its resilience last year, the upmarket fashion label has been grappling with weakening consumer demand despite increasing investment in marketing and production capacity in recent months.

Currency-adjusted sales were 1.029 billion euros during the three months, slightly up from 1.027 billion last year and broadly in line with market expectations of 1.023 billion euros.

"Particularly in China, the overall market environment was affected by persistent subdued consumer demand," the company said in a statement.

Quarterly currency-adjusted sales in its third-biggest market Asia/Pacific fell 7% to 110 million euros, but increased 1% in the Europe, Middle-East and Africa region and 4% in the Americas.

The company said improvements in Germany offset softer sales trends in France and in Britain, while it also saw further sales improvements in the United States.

Hugo Boss, which is taking additional measures to enhance efficiency and effectiveness, especially around sourcing, said it continued to focus on cost control to support profitability into the fourth quarter. It maintained its full-year sales and earnings forecasts after slashing them earlier this year.



Saudi Arabia, Kering Group Sign MoU to Elevate Fashion Sustainability in Kingdom

The Saudi Fashion Commission logo
The Saudi Fashion Commission logo
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Saudi Arabia, Kering Group Sign MoU to Elevate Fashion Sustainability in Kingdom

The Saudi Fashion Commission logo
The Saudi Fashion Commission logo

The Saudi Fashion Commission has signed a memorandum of understanding (MoU) with French-based Kering, one of the world’s most influential luxury fashion conglomerates, to engage in discussions that support the development and implementation of initiatives that align with Saudi Arabia’s broader goals for the fashion sector.

The signing ceremony, held in Riyadh, was attended by Saudi Fashion Commission CEO Burak Cakmak and Chief Sustainability and Institutional Affairs Officer at Kering Marie-Claire Daveu.

The MoU marks the beginning of a strategic alliance aimed at exploring collaborative efforts in several key areas of common interest. The two organizations will work together to establish Kering Generation Awards, which recognize and celebrate leading sustainable fashion businesses, including establishing award criteria, participant selection processes, and award recipient development.

Moreover, the collaboration features a Regional Sustainability Index, providing fashion enterprises with a roadmap to enhance sustainable practices.
The initiative also entails publishing joint reports on achievements, conducting awareness sessions, and aligning with key events in Saudi’s annual fashion calendar.

Leveraging Kering’s industry expertise, the two parties will focus on customer engagement, circular economy and water protection and aim to identify pioneering approaches to sustainable materials that can serve as industry standards.

This partnership underscores the Saudi Fashion Commission’s commitment to advancing sustainability across the fashion value chain. As a leader in sustainable luxury fashion, Kering brings a wealth of experience in managing eco-conscious initiatives, reinforcing the MoU’s potential to drive meaningful change in the region’s fashion landscape.

“We are delighted to partner with Kering, whose commitment to sustainability aligns with our mission to foster a forward-thinking, eco-conscious fashion ecosystem in Saudi Arabia. Together, we aim to set new standards for sustainability and innovation in the region,” said Cakmak.

As for Daveu, she said that the MoU presents a remarkable opportunity for the company to support the growth of sustainable fashion practices in Saudi Arabia.

“We look forward to collaborating on initiatives that will contribute to a more sustainable future for the fashion industry,” she added.

The MoU will be effective immediately for an initial term of one year, with an option for automatic renewal upon mutual agreement.
This partnership reflects the shared vision of the Saudi Fashion Commission and Kering to lead the region’s move toward a more sustainable and responsible fashion industry.