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UPDATE 1-Hugo Boss cuts outlook on poor sales in China, USA
October 15, 2015 / 5:07 PM / 2 years ago

UPDATE 1-Hugo Boss cuts outlook on poor sales in China, USA

* Q3 sales drop 1 pct, core profit down 8 pct

* 2015 sales, profit to rise 3-5 pct

* Slowdown in China hits other European luxury firms (Adds third-quarter numbers, comment on fourth quarter)

BERLIN, Oct 15 (Reuters) - German fashion house Hugo Boss cut its 2015 sales and profit outlook on Thursday as a slowdown in China and more hesitant tourist shoppers in the United States hurt its third-quarter results.

Hugo Boss, known for its sharp suits but which has been making more of a push into womenswear and accessories, said while its European business was performing in line with expectations, sales had dropped in China and weaker tourist spending had hampered sales in the United States.

Other European luxury goods firms are feeling the pressure from the slowdown in China and the stock market collapse.

London-listed rival Burberry cut its outlook earlier, sending its shares tumbling on Thursday, while luxury market leader LVMH said the problems in China were behind lower sales growth at its fashion and leather unit.

Hugo Boss reported third-quarter sales down 1 percent to 744 million euros ($848 million), while earnings before interest, tax, depreciation and amortisation (EBITDA) and special items dropped 8 percent to 168 million euros.

The German company said on Thursday it now expected sales and core profit to each rise by between 3 and 5 percent on a currency-adjusted basis.

“This outlook is based on the assumption that fourth-quarter retail comparable store sales will remain stable or develop positively compared to the prior year quarter,” it said.

The group had previously expected a mid single-digit percentage rise in currency-adjusted sales this year and EBITDA to rise 5-7 percent.

Shares in Hugo Boss fell 8.8 percent to 95 euros in late trading in Frankfurt, after closing at 102.20 euros in Xetra trading. The company will report full third-quarter results on Nov. 3. ($1 = 0.8772 euros) (Reporting by Victoria Bryan; Editing by Georgina Prodhan)

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