Hugo Boss's Shares Tumble After 2019 Guidance Cut

By Giulia Petroni

Hugo Boss AG's (BOSS.XE) shares tumbled Friday after the German clothing company cut its revenue and earnings guidance for the year in its third-quarter results Thursday, citing weaknesses in North America and Hong Kong.

At 0802 GMT, Hugo Boss traded 13% lower at EUR39.33 a share.

"The Hong Kong protests hampered growth in Greater China, but we believe that sluggish retail trends in the U.S. may have been the biggest drag," Bryan Garnier analysts said.

Bryan Garnier cuts its estimates for 2019 and 2020 EPS by 11%, considering Hugo Boss's revision new guidance on earnings before interest and taxes, which are now expected to fall between 2% and 5%, compared with a previous estimate for growth.

On Thursday, the German premium apparel maker said it forecasts operating profit of between 330 million euros ($362.1 million) and EUR340 million, down from the EUR347 million last year.

Hugo Boss's poor performance also shows that polarization in the luxury sector isn't over, coming shortly after LVMH Moet Hennessy Louis Vuitton SE (MC.FR) reported stronger-than-expected third-quarter sales, Bryan Garnier says.

The warning "is a cruel reminder that the German group operates in an apparel market that is clearly more volatile than other categories such as leather goods, beauty or jewelry," analyst Cedric Rossi says.

The company will release full third-quarter results on Nov. 5.

Write to Giulia Petroni at [e-mail]

(END) Dow Jones Newswires

October 11, 2019 04:31 ET (08:31 GMT)

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