German fashion group Hugo Boss reported quarterly operating profit above expectations on Tuesday, despite a challenging market environment.
The company posted first-quarter earnings before interest and taxes (EBIT) of 35 million euros, down from 61 million euros a year earlier, but above analyst's forecast of 30 million euros in a company-provided poll.
The German firm reported revenue of 905 million euros for the period, exceeding analysts' forecast of 887 million euros.
"Following our successful finish to 2025, we entered the year with a clear roadmap. However, the market environment has become more challenging over the course of the first quarter, caused by recent developments in the Middle East," CEO Daniel Grieder said in a statement.
The war in the Middle East has roiled global markets, driving oil prices higher and re-igniting concerns over global inflation and growth, with the vital Strait of Hormuz remaining closed.
The company said the conflict in the region led to a notable decline in store traffic in the region from March onwards, while global consumer sentiment stayed muted throughout the quarter, having a negative impact of around 1% on group sales in the first quarter.
However, Grieder said the firm had made progress streamlining product assortments and refining its global distribution footprint despite the geopolitical uncertainty.
"Against an increasingly challenging external backdrop, we remain firmly focused on executing our strategy, actively managing the business with flexibility and discipline," he added.
Hugo Boss has sought to boost the popularity of its brand through selected marketing investments, while increasing profits by limiting costs, despite weakening consumer demand.
The company confirmed its full-year guidance for 2026.
