Hugo Boss sees weakness in China, US persisting in 2016
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German fashion house Hugo Boss expects challenges in China and the US market to keep a lid on sales growth next year, but it said it would keep investing in its website and stores.
In a presentation released ahead of an investor day on Tuesday, Hugo Boss said it expected 2016 sales growth below its long-term target for a high single-digit rise and said it would only reach its 2020 target for a core earnings margin of 25 percent if the overall market recovered.
However, it said lower capital expenditure and a further improvement in it management of working capital would help boost free cash flow in 2016, adding it remained committed to maintaining an attractive dividend payout policy.
Questions & Answers
Q.What is Hugo Boss's long-term sales growth target?
What is Hugo Boss's long-term sales growth target?
Hugo Boss's long-term target is for a high single-digit rise in sales growth. They expect 2016 sales growth to be below this figure.
Q.When does Hugo Boss expect to reach its core earnings margin target?
When does Hugo Boss expect to reach its core earnings margin target?
Hugo Boss expects to reach its 2020 target for a core earnings margin of 25 percent only if the overall market recovers. This is not guaranteed.
Q.How does Hugo Boss plan to boost free cash flow in 2016?
How does Hugo Boss plan to boost free cash flow in 2016?
In 2016, Hugo Boss plans to boost free cash flow through lower capital expenditure and further improvements in its management of working capital.
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