At 0855 GMT, shares in Hugo Boss were down 10% at EUR59.54, following the release of the company’s preliminary earnings report. While the German premium-fashion company saw an increase in earnings before interest and taxes (EBIT) for the fourth quarter, the results fell short of analysts’ expectations.
The company reported an EBIT of 121 million euros ($132.5 million) for Q4, which marked a 17% increase compared to the previous year. However, estimates compiled by FactSet had projected earnings to reach EUR133 million. Similarly, for the full year of 2023, Hugo Boss reported an EBIT of EUR410 million, showing a 22% growth YoY, but still below analysts’ expectations of EUR419 million.
Despite the profit miss, Hugo Boss achieved strong currency-adjusted sales figures. Sales for the quarter were 13% higher at EUR1.18 billion, while sales for the year reached EUR4.2 billion, reflecting an 18% increase.
Experts have noted that while Hugo Boss may have fallen short of expectations, the company continues to outperform the market. Citi analysts Thomas Chauvet and Lorenzo Bracco stated in a research note that the company’s success in 2023 should not be disregarded. However, they also cautioned that sales and earnings consensus expectations for 2024 may need to be revised slightly in light of these results.
Deutsche Bank analysts Michael Kuhn and Adam Cochrane echoed a similar sentiment in their note, stating that while initial disappointment might ensue due to the EBIT miss, Hugo Boss still demonstrates strength in surpassing market performance.
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