BERLIN — Citing better than expected sales and earnings performance in the fourth quarter, Hugo Boss now expects operating profit for the full year to decline at the lower end of its forecast range.
Boss is now eyeing a drop in adjusted earnings before interest, taxes, depreciation and amortization before special items of around 17 percent in 2016, compared to the forecast range of 17-23 percent. In 2015, EBITDA before special items reached 594 million euros, or $695.6 million.
Dollar figures are converted at average exchange for the period to which they refer.
According to preliminary figures released today, fourth-quarter sales totaled 725 million euros, or $782.2 million, a nominal decline of 3 percent. In currency-adjusted terms, sales fell 1 percent.
Full-year sales fell 4 percent to 2.69 billion euros, or $2.98 billion. On a currency-adjusted basis, group sales were down 2 percent, meeting the group’s annual sales targets.
Hugo Boss chief executive officer Mark Langer said “fourth-quarter results underline that we are on the right track.” He reported the turnaround in China was completed in the second half of the year, and that the group’s performance in Europe “held up well in a difficult market environment.”
Regionally, currency-adjusted Q4 sales in Europe rose 2 percent to 422 million euros, or $455.3 million, primarily fueled by “robust growth” in the U.K. Domestic sales rose as well, the company said.
Sales in Asia were up 5 percent, Boss reported, while comparable store sales in mainland China gained “close to 20 percent adjusted for currency effects.” The Americas remain a problem zone, with currency-adjusted sales down 12 percent for the quarter.
The group’s own retail business improved in the quarter, with currency-adjusted sales up 4 percent. While comparable store revenues fell 3 percent, this represents a significantly lower rate of decline than earlier in the year, Boss pointed out. Wholesale sales fell 13 percent in local currencies, strongly impacted by the group’s continued moves to clean up distribution in the U.S.
Boss will publish final results and the group’s 2017 outlook on March 9.