The fashion company Hugo Boss intensifies its cost discipline as the ongoing consumer slump in China and the Asia-Pacific region affects profits. In the third quarter, earnings before interest and taxes (EBIT) fell by over seven percent to 95 million euros, even though currency-adjusted sales across the group rose by one percent to almost 1.03 billion euros.

Thanks to strict cost management, the decline in profits was cushioned. In administration, expenses in "non-business-critical" areas were significantly reduced, and budgets for marketing and advertising were lower. Overall, Hugo Boss earned 55 million euros compared to 63 million euros in the previous year.

While business in Europe, the Middle East, and Africa (EMEA) remained stable, the company recorded declining sales in Asia/Pacific. The stock reacted with volatility: After an initial rise of about 3.6 percent, profit-taking occurred, and the share closed with a five percent loss at the lower end of the MDAX.

Analysts were divided in their opinions. UBS expert Zuzanna Pusz praised the better performance in the third quarter but warned of significantly weaker gross margins in direct consumer business. Manjari Dhar from RBC Bank highlighted that operating expenses were controlled better than expected, leading to EBIT that exceeded the consensus estimate by six percent.

The board confirmed the annual targets for 2024: A currency-adjusted sales increase of one to four percent to 4.2 to 4.35 billion euros and an EBIT between 350 and 430 million euros. CFO Yves Müller remained cautious with regard to the coming year and announced that new information would be published only in March. CEO Daniel Grieder emphasized at the end of October that the targets of five billion euros in sales and a return of twelve percent still stand, although it will just take a little longer.

The shares of Hugo Boss have lost around 40 percent of their value since the beginning of the year. They are currently trading at around 41.20 euros, which further weighs on investor sentiment.