Hugo Boss has lowered its guidance as the slowdown in the luxury market continues to take its toll

Hugo Boss posted a 42% fall in EBIT during the second quarter of the year to €70m (£58.8m), demonstrating softer sales trends and “strategic investments into the business”.

The fashion retailer also reported a 1% dip in group sales to €1.02bn (£856.76m) during the period as “challenging macroeconomic and geopolitical conditions” impacted consumer demand.

Hugo Boss noted that its key markets – namely, the UK and China – have been “particularly challenging” as the slowdown of growth across the luxury sector continues.

In the Americas, Hugo Boss reported growth of 5%, despite sales falling 2% and 4% in Europe, the Middle East and Africa and Asia Pacific, respectively.

With an eye to its bricks-and-mortar presence, revenues were down 2% as footfall to stores also dropped during the quarter.

Hugo Boss reported that soft consumer sentiment hit all of its brands, with revenues down at Boss menswear and only edging up slightly at Boss womenswear. At the Hugo brand, sales were up 3% as customers favoured the launch of its new denim-focused range Hugo Blue.

Lowered expectations

Hugo Boss has lowered its full-year expectations for 2024 with sales now forecast to rise between 1% and 4%, reaching between €4.2bn (£3.53bn) and €4.35bn (£3.65bn). Previously, the sales guidance was pledged at up to €4.45bn (£3.74bn).

EBIT expectations for the year are €350m (£294m) to €430m (£361.2m), a rise of between -15% and 5%.

Hugo Boss chief executive Daniel Grieder said: “We are operating in a period of significant global macro uncertainty, which also affected our performance in the second quarter.

“Although the timing of any macro recovery remains uncertain, our strategy of consistently investing in our strong brands, Boss and Hugo, gives us confidence in our ability to continue driving above-trend growth and capturing further market share.

“By translating this sales performance and focusing even more on operating effectiveness, we have the ability to return to profitable growth in the second half. With the continued execution of our ‘Claim 5’ strategy, we are committed to driving substantial value creation for our shareholders going forward.”