BERLIN – Europe’s long hot summer and a challenging market environment negatively impacted third quarter earnings performance at Hugo Boss. The German apparel group posted an 18 percent drop in net income and a 12 percent decline in EBITDA before special items, while sales were flat for the period ending Sept. 30.
Nonetheless, anticipating “significant growth in sales and earnings in the fourth quarter,” Boss confirmed its full year sales and earnings guidance. Regarding gross profit margin, however, which declined 240 basis points in the third quarter, Boss is now forecasting a decline of between 50 and 100 basis points for the full year.
Third quarter net income slipped to 66 million euros compared to 80 million euros the previous year, with EBITDA before special items reaching 126 million euros, down from 143 million euros for the prior-year period. While operating expenses were down slightly, this could only partially offset the EBITDA decline.
The gross profit margin was down to 62.5 percent compared to 64.9 percent the year previously, which Boss attributed to negative effects from inventory valuation, higher markdowns in own retail, continued investments in product quality and negative currency effects. Currency effects had an overall negative effect on earnings development in the