Hugo Boss AG had an earnings report that didn't impress shareholders. The corporation's stock has dropped after the clothing company released its lackluster third quarter (Q3) earnings report.
Hugo Boss recorded a revenue of $810 million, an uptick of 1%. The company had a 38% increase in online sales, but weather inadvertently hurt the brand's brick-and-mortar sales in Q3.
Longer summer hurts sales
The unusually long-lasting summer weather in Europe put a dent in Hugo Boss sales. Customers bought more casualwear than the higher-priced suits and businesswear. Menswear saw a single-digit growth, but womenswear sales declined.
Mark Langer, the chief executive officer (CEO) of Hugo Boss, noted that the decrease in purchases of formal wear hurt the brand’s bottom line.
‘A challenging market environment meant that the third quarter was not easy. In particular the long, hot summer in Europe affected our business,’ said Langer.
Purchases of Hugo Boss differed worldwide. In most of Europe, purchases decreased by 13%, except in Great Britain, where sales jumped 11%. Asia’s customers helped the company’s profits grow by 7%. In the Americas, consumers made double-digit purchases in the wholesale market, driving up revenue by 5%.
Guidance for Q4
Despite the diminished sales in Q3, Langer remains hopeful for Q4. He asserted that there will be an increase in purchases during the holiday season. ‘We’re expecting a strong acceleration in sales and earnings in the fourth quarter. We are therefore very confident that we will achieve our full-year targets,’ said Langer.