BERLIN — Earnings slipped on flat sales at Hugo Boss in 2002.
This story first appeared in the February 24, 2003 issue of WWD. Subscribe Today.
In a release of preliminary 2002 results on Thursday, the Metzingen, Germany-based apparel group said net profits for 2002 fell 30.6 percent to $80.2 million, compared with $115.7 million in 2001. This result, however, beat the revised forecast issued by the company last July, which called for net profits of $75.2 million. Additionally, the company noted, it represented the “third-best result in the history of the Hugo Boss Group.” Dollar figures have been converted from the euro at the current exchange of $1.074 per euro.
Hugo Boss attributed the decline in profits to “a slightly lower gross revenue margin, a higher provision for accounts receivable risks, the continued expansion of the company’s own distribution channel and charges brought forward from 2001.” These charges, as reported, primarily involve nonrecurring expenses relating to inventory discrepancies of more than $10 million in the U.S. that occurred in 2001 but were posted in 2002.
Sales of $1.17 billion were roughly on par with 2001 sales of $1.18 billion. Adjusted to eliminate the effects of currency fluctuation, sales rose 1.3 percent, the company noted.
Based on these results and “the positive assessment of the ongoing development of the company,” Hugo Boss expects to maintain its current dividend rates of 81 cents per common share and 82 cents per preferred share.
Final figures and further information on business developments in 2002 will be released April 3.