BERLIN — Hugo Boss AG’s first-quarter profits came in unchanged, missing analysts’ estimates, despite sales growth during the period.
Net income for the first three months of the year was $51.9 million, or 44 million euros converted at current exchange. Analysts had expected profits to fall within the range of $56.2 million, or 47.6 million euros, to $61.4 million, or 52 million euros.
Sales for the Metzingen-based men’s and women’s wear house rose 5 percent to $421.3 million, or 357 million euros, in the first three months of 2004. Moreover, when adjusted for currency effects, group sales were up 8 percent.
About half of that increase came from the newly integrated underwear, sock and knitwear classifications, as well as shoes and accessories, which will be fully taken in-house this year. U.S. business also contributed as sales rose 19 percent in dollars during the quarter.
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Men’s wear sales were up 4 percent but remained under pressure from Germany’s weak consumer environment, the company said. At Boss Woman, sales were up 31 percent to $22.4 million and operating profits totaled $1.2 million versus a loss of the same magnitude in last year’s quarter.
For the full year, the company said it expects slight growth in revenues but a greater advance in earnings.
Although analysts were generally disappointed with the group’s earnings performance, Landesbank Rheinland-Pfalz upgraded the company to “market performer” based on sales growth and improvement in the American market. The bank also raised Boss’ target share price to 21 euros from 19 euros.
Merrill Lynch, on the other hand, reiterated its “neutral” recommendation, stating in a report on April 24 that “while the Boss Woman business is growing fast and is now profitable, the group’s leading brand, Boss Man, has not fully recovered.”
— Melissa Drier