Hugo Boss Slumps After Postponing 2015 Profitability Objective

Hugo Boss AG (BOSS), the German luxury-clothing maker controlled by buyout firm Permira Advisers LLP, dropped the most in six months after postponing a profitability target as it spends more to make the brand better known in Asia.

The shares fell as much as 3.9 percent to 95.21 euros, the most since May 3. They were down 3.6 percent at 9:43 a.m., the fourth-steepest drop in the Stoxx Europe 600 Index.

The clothier said late yesterday that its goal to attain earnings before interest, tax, depreciation and amortization representing 25 percent of sales will be achieved later than its objective of 2015. Margin progression has been restrained for two years by the cost of store expansion, and will be further held back by spending to convey the brand to customers, it said.

“It will be quite challenging to increase profitability further from current levels and to achieve steady double-digit earnings growth,” Andreas Riemann, an analyst at Commerzbank AG, said today in a note to clients.

Hugo Boss reiterated its goal for sales to reach 3 billion euros ($4.1 billion) in 2015, saying it expects to get more than 60 percent of revenue that year by selling directly to consumers.

To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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