Hugo Boss Sees Rising Full-Year Revenue on Retail BusinessAaron Ricadela and Janice Kew
Hugo Boss AG, the German luxury-clothing maker, forecast accelerated sales growth and rising earnings for this year as the company adds stores to its own retail network and spends more to promote itself in Asia.
Revenue adjusted for currency swings, and earnings before interest, tax, depreciation and amortization, will increase by “high single-digit” percentages, the clothier said in a statement today. Sales gained 4 percent to 2.43 billion euros ($3.39 billion) last year, while profit climbed 7 percent to 565 million euros, the maker of of clothes, shoes, bags and accessories said Feb. 7.
Even so, most analysts were expecting faster growth, Andreas Inderst, an analyst at Exane BNP Paribas, which has an outperform recommendation on the stock, said in a note. The “guidance is slightly below expectations,” of 10 percent earnings growth in 2014.
Boss, controlled by buyout firm Permira Advisers LLP, in November delayed a key profitability target as it spends more opening stores and promoting itself to more free-spending Chinese consumers. The company sees double-digit growth in its own retail business this year, while the wholesale channel is expected to remain “broadly stable.” It plans investment of 110 million euros to 130 million euros in 2014, it said.
The company wants to expand its own retail network by about 50 locations, excluding takeovers, it said, and investment will mainly focus on that expansion and on store renovation.
Boss shares rose 0.1 percent to 94.59 euros as of 9:50 a.m. in Frankfurt. The shares have returned 8.5 percent in the past year, including reinvested dividends, compared with a 17 percent return for the DAX index.
Boss today said it forecast sales of 3 billion euros next year, compared with the average estimate in a Bloomberg survey of 2.89 billion euros. The company said it will reach an Ebitda profit margin goal of 25 percent of sales in the “medium term.” Analysts on average expect Metzingen, Germany-based Hugo Boss to achieve an Ebitda margin of 23.6 percent this year.