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Difficult macroeconomic and geopolitical conditions continue to weigh on global consumer demand. Hugo Boss<\/strong><\/b>, the German fashion house, recently revised its sales forecasts for 2024 downwards, citing weakening global demand, particularly in China and the UK<\/strong><\/b>.<\/p>\n <\/p>\n The group now expects sales of between 4.20 and 4.35 billion euros<\/strong><\/b> (+1% to +4%), compared with a previous estimate of 4.30 to 4.45 billion euros<\/strong><\/b> (+3% to +6%).<\/p>\n <\/p>\n Preliminary figures for the second quarter of 2024 show a 1%<\/strong><\/b> drop in sales to 1.02 billion euros<\/strong><\/b>, with \u201cdifficult macroeconomic and geopolitical conditions weighing on global consumer demand\u201d<\/em>, says the group.<\/p>\n <\/p>\n Operating profit (Ebit) for the period came to 70 million euros<\/strong><\/b>, well below the company’s consensus of 104 million euros<\/strong><\/b> (-42%).<\/p>\n <\/p>\n This underperformance led to an 8%<\/strong><\/b> fall in the share price on the Frankfurt Stock <\/strong><\/b>Exchange, to its lowest level since 2021.<\/p>\n <\/p>\n <\/p>\n\n <\/p>\n The high-end clothing brand has embarked on an expansion with the opening of 102 new points of sale in 2023<\/strong><\/b> and an increase in advertising expenditure. Despite these efforts, preliminary results for the second quarter were disappointing.<\/p>\n <\/p>\n Hugo Boss management now expects annual operating profit of between \u20ac350 and \u20ac430 million<\/strong><\/b>, down significantly from the previous forecast of \u20ac430 to \u20ac475<\/strong><\/b> million.<\/p>\n <\/p>\n This revision marks the second reduction in sales prospects this year for the Group. At the time of publication of its first-quarter results, Hugo Boss had already reported a drop in demand in China and concerns about US consumer morale in the run-up to the presidential election.<\/p>\n <\/p>\n <\/p>\n The luxury goods sector in general is going through a difficult period. The world’s leading watchmaker Swatch<\/strong><\/b><\/a> and the British luxury group Burberry<\/strong><\/b><\/a> also reported sharp falls in sales and profits, attributed to weak Chinese demand. Swatch saw its share price fall by 9.8% in Zurich<\/strong><\/b>, while Burberry lost over 18% in London<\/strong><\/b>.<\/p>\n <\/p>\n These disappointing performances put pressure on the entire luxury goods sector on the Paris Bourse.<\/p>\n <\/p>\n Despite this trend, Daniel Grieder<\/strong><\/b>, CEO of Hugo Boss, remains optimistic about a possible recovery. \u201cBy translating this sales performance and focusing even more on operational efficiency, we have the capacity to return to profitable growth in the second half of the year,\u201d<\/em> he said.<\/p>\n <\/p>\nRevision of annual outlook<\/h2>\n
The luxury sector in dire straits<\/h2>\n