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Hugo Boss forecasts slower growth due to weak European sales

Sales at Hugo Boss increased by 9% during the third quarter, but the company has warned its full-year growth will be slower than forecast in March.

The company said its full-year sales are likely to rise by around 6-8% and its operating profit by around 5-7% year on year, rather than the high single-digit growth it had originally expected.

The increase in third quarter sales to €717m (£561m) was driven by the Americas and Asia Pacific regions, which contributed growth rates of 11% and 13% respectively. Its European sales grew 8% in the period, which Hugo Boss said was a “robust” performance.

It added that sales in Europe had been affected by macroeconomic conditions and the “recent substantial slowdown in industry growth”.

Momentum weakened across all regions towards the end of the reporting period, particularly in Hugo Boss’s own retail business. Including outlets and online, own retail sales were up 11% year-on-year, while like-for-likes were 4%. Wholesale revenues increased by 7%.

“Thanks to improving business in the Americas and Asia/Pacific together with good expansion in Europe, we were able to achieve very solid growth in third quarter,” said Claus-Dietrich Lahrs, chief executive of Hugo Boss. “However, 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.

“That said, we are still confident of being able to achieve solid full-year sales and earnings growth, and thus outpace the luxury goods sector as a whole.”

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