Hugo Boss expects full-year sales and earnings to come in at the lower end of its forecasts due to challenges in the US market, despite strong sales growth in China.
Shares in the company, which have fallen by a quarter in the past year, fell almost 4% at one stage.
Known for its smart men’s suits, Hugo Boss has introduced more casual and sportswear styles to appeal to a younger audience, recently teaming up with former One Direction singer Liam Payne and Taiwanese-Canadian actor Mark Chao.
That strategy has been paying off in Europe — its biggest market — where sales rose 2% in the second quarter, and especially in Asia, with sales expanding at double-digit rates in China on a comparative store and currency-adjusted basis.
That mirrors a trend seen at other high-end fashion players like jacket maker Moncler and Louis Vuitton owner LVMH, which have been riding high on demand for branded goods across Asia.
However, Hugo Boss said quarterly sales fell 3% in the Americas, which it blamed on the easing of the positive effects of tax reform, weaker business with tourists and a highly promotional market.
Overall, second-quarter operating profit rose 3% to €76m on sales up a currency-adjusted 2% to €675m — shy of average analyst forecasts for €79m and €677m.
It now expects a slight decline in currency-adjusted sales for the Americas for the full-year, compared with a previous prediction for an increase.
For the group, it expects 2019 currency-adjusted sales growth to be at the lower end of an outlook for a mid-single-digit percentage rise, and operating profit to be at the lower end of its forecast for a high single-digit percentage increase.
Meanwhile, online fashion retailer Zalando raised its profit guidance after a big jump in visits to its website, with the company citing efforts to provide a best-in-class fashion experience and more speedy delivery options. Shares in the company, which delivers to 17 European countries, leapt by almost 14%.
The Zalando news helped to lift other fashion stocks, such as H&M, while Next and Puma extended gains recorded earlier this week when both reported strong results.
Zalando, Europe’s biggest online-only fashion retailer, has been trying to counter a squeeze on profitability as it has invested heavily in logistics to speed delivery. That has coincided with declines in average order size as customers shop more frequently from their smartphones but buy less each time.