Hugo Boss anticipates weak performance of China and U.S. in 2016

Hugo Boss expects challenges in China and the U.S. market to keep a lid on sales growth next year, but it said it would keep investing in its website and stores.

Hugo Boss said it expected 2016 sales growth below its long-term target for a high single-digit rise and said it would only reach its 2020 target for a core earnings margin of 25 percent if the overall market recovered.

Hugo Boss said China remained the biggest opportunity for the group even though the luxury apparel market is set to suffer another double-digit decline in 2015. The group plans to further narrow price premiums in China with other Asian markets and improve cost efficiency in the business in 2016.

It said its U.S. business was being hurt by weaker tourist spending due to the strong dollar as well as restrained consumer spending prompting high levels of discounting.

In response, Hugo Boss is trying to raise the quality of its brand presentation in U.S. department stores and said it was willing to accept a hit to sales by refraining from discounting.

Hugo Boss Fall Winter 2015