Hugo Boss said muted consumer sentiment was having an impact on its business in the current quarter as it forecast 2025 sales broadly in line with last year’s level on Thursday.

The upmarket fashion company has sought to boost the popularity of its brand through selected marketing investments, while increasing profits by limiting costs, despite weakening consumer demand and a polarization of consumer preferences towards either high-end luxury or cheaper fast-fashion offers.

It sees annual sales development between a 2 percent decline and a 2 percent increase, to a range of €4.2 billion to €4.4 billion ($4.57 billion to $4.79 billion), following 3 percent growth to €4.3 billion in 2024.

“Macroeconomic and geopolitical volatility remains high, weighing on consumer sentiment and impacting our business performance since the beginning of the year,” CEO Daniel Grieder said in a statement.

Analysts had estimated annual sales of €4.26 billion for 2024 and €4.44 billion for 2025, a company-provided poll showed.

The Hugo Boss shares were up 3.8 percent in early Frankfurt trade despite the cautious comments, with Baader Helvea’s analyst Volker Bosse pointing to a solid outlook for operating profit.

The company expects full-year earnings before interest and taxes (EBIT) to rise between 5 percent and 22 percent, coming in between €380 million and €440 million, compared to a 12 percent decline to €361 million last year.

At its midpoint, the guidance would imply EBIT of €410 million, against analysts’ estimate of €414 million.

The company also said sales growth was “particularly robust” in the last three months of 2024, boosted by a successful holiday season.

Group sales were €1.25 billion in the fourth quarter, beating analysts’ expectations of €1.20 billion, with currency-adjusted sales in the Americas region rising 8 percent helped by a high single-digit percent uptick in the key US market.

“Sales in China remained below the prior-year level, reflecting overall muted local consumer demand,” it added.

By Linda Pasquini

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Hugo Boss May Push Back 2025 Targets as Luxury Sector Falters

Shares in the company fell as much as 10 percent in July as it cut its full-year sales and earnings forecasts, citing weakening global consumer demand, especially in China and Britain.