Sharp drop in quarterly operating profit for Hugo Boss
The European economic crisis and the slow down accross several major emerging markets have taken a toll on German luxury group Hugo Boss AG which reports that its first-quarter operating profit fell 11 percent. Hugo Boss also blames the change in its collection cycle and the focus on directly operated stores for the negative results. Earnings before interest, taxes, depreciation, amortisation and one-time items fell to 132.6 million euros ($174.6 million) from 148.4 million euros a year earlier.
The market environment proved to be very challenging in the early months of this year,” chief executive officer Claus-Dietrich Lahrs said in the statement. “With a better performance of the wholesale business in the further course of this year, we shall return to renewed growth in the second quarter.”
Retail sales, which exceeded wholesale in 2012 for the first time, will be the “growth engine” this year, Lahrs said in March. The retailer, controlled by buyout firm Permira Advisers LLP, will spend more this year as it expands its own store network, Lahrs said.