BERLIN - Hugo Boss sales rose a nominal 2 percent in the first quarter of 2008, though management changes in the period had a negative effect on the German fashion house's earnings.
Sales hit $762.7 million (509.5 million euros). All dollar figures are converted from the euro at an average exchange rate for the quarter. Adjusted for currency effects, first quarter sales rose 5 percent.
Earnings before interest and taxes (EBIT) slid 5 percent to $140.1 million (93.6 million euros), and net income was down 7 percent to $97.6 million (65.2 million euros). Boss said "one-time extraordinary expenses arising from the change of the managing board of Hugo Boss AG impacted the personnel expenses in the first quarter by around 12 million euro." Boss CEO Bruno Sälzer, managing board member Werner Lackas and supervisory board president Giuseppe Vita all left the company early this year.
The continued expansion of Boss's own retail network and expansion in manufacturing and logistics also increased personnel expenses in the period, the company pointed out.
A 5 percent decline in domestic sales, which Boss said could primarily be attributed to changes in retail-ordering patterns due to a prolonged winter and subsequent consumer reticence, was more than compensated for by increases in other countries. Currency adjusted sales in Europe were up 2 percent, 11 percent in the Americas and 28 percent in Asia/other regions. U.S. sales in dollar terms were up 16 percent in the quarter to $82.3 million (55 million euros).
Boss women's wear grew sales a nominal 6 percent in the quarter, Boss men's wear 1 percent, and Hugo 9 percent. Profits from licensing increased 16 percent to $18 million (12 million euros) and further gains are expected over the year due to the launch of Boss Jewelry in the second half of the year.
For the year as a whole, Boss is projected currency-adjusted sales growth of 6-8 percent and a rise of 8-10 percent in EBIT before special effects.
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