BERLIN — Hugo Boss reported first-quarter net income fell 7 percent while sales grew 9 percent amid strong comps and challenging market conditions.
The Metzingen-based apparel group reconfirmed its 2015 forecast and said it expects both profit and sales growth to accelerate in the course of the year, powered by the its retail business.
Boss reported net income of 75.6 million euros, or $85.3 million, for the three months ended March 31, with EBITDA before special items flat at 131.5 million euros, or $148.4 million.
Dollar figures are converted at average exchange for the period to which they refer.
The appreciation of the U.S. dollar helped boost sales growth in euro terms to 668 million euros, or $753.7 million in the quarter. Adjusted for currency effects, sales grew 3 percent.
All regions contributed to the performance, with core markets such as Germany and Great Britain achieving above average growth, the group said. The U.S. market expanded 4 percent, and Boss noted Australia and Japan performed well, but difficult industry conditions and the macroeconomic slowdown pushed sales in China down 3 percent.
Boss’s own retail business logged a 15 percent gain in euro terms (6 percent currency-adjusted) to reach 370.1 million euros, or 417.6 million. The channel accounts for more than 55 percent of total group sales. The Boss own store network, which now numbers 1,060 doors, achieved comp store sales of 3 percent. Boss chief executive officer Claus-Dietrich Lahrs said the group would add about 50 new stores this year.
Online gained 14 percent and the group’s outlet business generated double-digit gains. In line with the group’s full year forecast, currency-adjusted wholesale business fell 2 percent, impacted by overall market conditions and the takeover in 2014 of spaces previously managed by wholesale partners.
The group’s men’s wear business was up 2 percent in local currencies in the first quarter, while all Boss women’s wear ranges together gained 4 percent. Under Jason Wu’s artistic direction, the core Boss brand posted double-digit gains.
Boss is forecasting EBIDTA before special items will grow between 5 and 7 percent in euro terms, with net profit improving over the year in comparison to the current first quarter results.