On Tuesday, Deutsche Bank (ETR:DBKGn) adjusted its financial outlook on shares of Hugo Boss AG (BOSS:GR) (OTC: BOSSY), reducing the price target to EUR58.00 from the previous EUR70.00. Despite the lower price target, the firm continues to recommend a Buy rating for the stock. This change follows Hugo Boss's preliminary second-quarter results, which did not meet market expectations.
The luxury fashion company reported a significant miss in its earnings before interest and taxes (EBIT), which came in at EUR70 million. This figure fell short of market expectations by 33%, primarily due to operational expenses reaching EUR568 million, compared to the consensus estimate of EUR543 million. The miss in EBIT is attributed to higher-than-anticipated operational expenditures.
In light of these outcomes, Hugo Boss also revised its full-year 2024 guidance. The company now projects its sales growth, including foreign exchange impacts, to be between 1-4%, a decrease from the previously forecasted range of 3-6%. Moreover, Hugo Boss has adjusted its expected sales figures to range from EUR4.2 billion to EUR4.35 billion, down from the earlier estimate of EUR4.3 billion to EUR4.45 billion.
The updated earnings forecast also reflects a change in the expected EBIT for the fiscal year. Hugo Boss anticipates its EBIT to be between EUR350 million and EUR430 million. This projection represents a potential decline of up to 15% or a gain of up to 5% year-over-year, indicating a broader range of possible outcomes for the year's financial performance.
Hugo Boss's revised financial guidance and the resulting adjustment in the investment firm's price target reflect the immediate fiscal challenges faced by the company. The fashion retailer's updated outlook and the analyst's maintained Buy rating provide a current snapshot of its financial health and market position.
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