Hugo Boss sees slowing sales but confident on China growth
By Linda Pasquini
(Reuters) -German fashion house Hugo Boss on Thursday forecast slower sales and earnings growth for 2023, sending its shares down as much as 4%.
The luxury group faces tougher comparison figures in 2023 after it rode the wave of a brand revamp last year. There are also market concerns that China's reopening will provide only a limited boost due the company's low exposure to the world's second biggest economy.
Hugo Boss, known for its smart men's suits, sees mid-single-digit percentage growth in annual sales and an operating profit of between 350 million and 375 million euros ($370 million and $396 million), or 5% to 12% growth.
Its 2022 sales rose 27% to 3.65 billion euros while operating earnings grew 47% to 335 million euros, as announced in January.
Cédric Rossi, analyst at Bryan Garnier, told Reuters lack of any positive surprise in the 2022 results and 2023 outlook might have triggered some profit-taking.
Rossi said investors were betting on China's reopening, which he said could appear as a weakness for Hugo Boss as China sales accounted for 6% of group sales in 2022.
Chief Executive Daniel Grieder told reporters he was "very confident" the company could grow in China, seeing upscale opportunities with "lot of upside" in China and Asia despite uncertain timing and pace of recovery.
Hugo Boss expects its Asia-Pacific sales to rise "in the teens" percentage range this year, against a 10% increase in 2022.
Grieder said management was convinced Hugo Boss could outperform the sector despite economic and political uncertainties in 2023.
"The first two months (of 2023) show that we can continue with the momentum," he said.
Hugo Boss shares, which up to Wednesday's close had gained more than 45% from their November lows, were down 1.5% at 1147 GMT.
($1 = 0.9465 euros)
(Reporting by Linda Pasquini and Anastasiia Kozlova in Gdansk; Editing by Milla Nissi and Jane Merriman)