Hugo Boss stock: Plunge after outlook

Last Updated: 7. Mรคrz 2024By

Hugo Boss stock plummeted after the presentation of the final numbers and lost almost 19 percent after the opening of the stock markets today (as of March 7, 2024, approximately 10 am). This puts the stock at around 51.50 euros, the lowest it has been in over a year.

The reason for the drop in Hugo Boss stock is the very cautious outlook for 2024 and beyond. In particular, the revision of medium-term sales targets has caused disappointment. Despite the decline, investors should not forget that the fashion company continues to be on a growth path and remains optimistic, especially in terms of profitability.

Hugo Boss with strong numbers โ€“ but growth is slowing down With around 4.2 billion euros in 2023, Hugo Boss achieved 18 percent more sales than the previous year on a currency-adjusted basis. EBIT amounted to 410 million euros, 22 percent higher than in 2022. The EBIT margin climbed to 9.8 percent.

However, for the current year, Hugo Boss is slightly less optimistic and expects lower sales growth due to the consumer climate and geopolitical tensions. For 2024, the group plans to increase sales by 3 to 6 percent to 4.30 to 4.45 billion euros. EBIT is expected to increase between 5 and 15 percent and reach between 430 and 475 million euros.

With the outlook, Hugo Boss has also revised its medium-term targets until 2025. At least the sales target of 5 billion euros is now expected to be reached „slightly delayed“ instead of in 2025. However, the EBIT margin target of at least 12 percent for 2025 remains in place.

Hugo Boss stock: opportunities despite decline The delay in the long-known sales targets until 2025 has caused a small earthquake for Hugo Boss stock today. The company has to admit that the sales growth planning cannot be met due to the consumer situation. However, the situation is different when it comes to the development of profitability.

In 2024, the EBIT margin is expected to increase to 10.0 to 10.7 percent and to at least 12 percent in the following year. In view of this โ€“ and also because Hugo Boss is likely to continue to grow in terms of sales โ€“ today’s drop in share price could also be seen as an opportunity for investors. However, the company will have to prove itself in terms of its profitability goals.

Now, Hugo Boss must first regain confidence in its objectives. Analysts are still optimistic, with Deutsche Bank confirming its price target for Hugo Boss stock at 79 euros just a few days ago.