Hugo Boss shares slide on lower forecasts as economy slows

* Sees 2014 sales rise of 6-8 pct, operating profit 5-7 pct

* Q3 net profit 114.7 mln euros vs consensus 123 mln

* Momentum weakened across all regions towards end of Q3

* Shares (Berlin: DI6.BE - news) down 5 pct (Adds detail, comment, shares)

By Emma Thomasson

BERLIN, Nov 4 (Reuters) - German fashion house Hugo Boss (Xetra: A1PHFF - news) trimmed its 2014 sales and profit forecasts on Tuesday due to a slowing European economy after it reported weaker-than-expected third-quarter profits.

Hugo Boss said it now expected sales to grow 6-8 percent in 2014, after accounting for currency changes, while operating profit should rise 5-7 percent. It had previously forecast a high single-digit percentage rise for both measures.

"Over the last few weeks, our business has been increasingly feeling the effects of the weak performance of the sector in Europe and uncertainties in Asia," Chief Executive Claus-Dietrich Lahrs said in a statement.

Hugo Boss makes almost two-thirds of its sales in Europe, Middle East and Africa, so it is more exposed to a downturn in the region than bigger luxury goods groups such as LVMH and Burberry which have suffered this year due to waning demand in Asia.

Hugo Boss shares fell 5.3 percent at 1004 GMT, in contrast to a 0.2 percent firmer German mid-cap index.

"Hugo Boss Q3 profit, as well as the more precise guidance, are somewhat below market expectations," said Equinet analyst Ingbert Faust, who rates the stock "reduce".

However, Citi analyst Thomas Chauvet, who rates the stock "buy", said he was still confident about the firm's prospects, noting the shares had outperformed the rest of the luxury goods sector by about 7 percent this year and 15 percent last year.

"Hugo Boss remains a quality growth stock that offers a global footprint, solid revenue/earnings dynamics ... and an undemanding valuation underpinned by an improved balance sheet ... and high dividend yield," he wrote.

SECTOR WOES

Even before the European economy started to slow, the global luxury goods industry was struggling as the conflict in Ukraine hit demand in Russia and demonstrations in Hong Kong added to concerns about softer demand from China due to its weaker economy and a crackdown on conspicuous spending.

Last month, both LVMH and Burberry warned of a more uncertain economic environment.

Hugo Boss third-quarter net profit rose 2 percent to 114.7 million euros ($143.5 million), but missed average analyst forecasts for 123 million euros as marketing and distribution expenses rose. Sales rose 9 percent to 717 million, ahead of analyst forecasts for 710 million euros.

Best known for its men's suits, Hugo Boss has been heavily promoting a new range of womenswear from designer Jason Wu, a favourite of U.S. First Lady Michelle Obama.

Hugo Boss said Wu's first collection, on sale since July, had exceeded its own high expectations and his range for spring/summer 2015 had got a positive reception from wholesale buyers, strengthening hopes for above-average growth in coming years.

The firm reported a currency-adjusted 8 percent rise in sales in Europe in the quarter, but said momentum weakened across all regions towards the end of the three-month period, particularly in its own stores, which account for more than half its sales.

Hugo Boss has been investing in more of its own shops, planning to add about 50 stores this year to the 1,000 it has. It said on a same-store, currency-adjusted basis, retail sales rose 4 percent, slower than a 5 percent rise in the first half. (1 US dollar = 0.7995 euro) (Editing by David Clarke)