Hugo Boss share price jumps back up from 11-year lows

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Revenues plunged 24% to 533 million euros, falling short of the market consensus of 553 million euros
Hugo Boss reported an operating profit of 15 million euros, higher than analysts’ expectations
Shares rose by more than 7% to move away from 11-year lows

The shares of Hugo Boss AG (ETR: BOSS) rose today by over 7% after the luxury fashion group presented a positive quarterly report.

Fundamental analysis: China drives recovery

Hugo Boss saw its quarterly sales plummet by 24% to 533 million euros and thus missed the market consensus of 553 million euros. The drop in sales was offset by an increase in operating profit, as Hugo Boss reported an operating profit of 15 million Euro, which exceeded analysts’ expectations.

Sales were driven mainly by China (+27%) as Acting CEO Yves Mueller said trading activity was also strong in October. China accounts for about 7% of total sales.

“That is why we want to continue at full speed,” said Mueller.

The German-based fashion company saw a strong increase in profits in the third quarter and confirmed that it remains focused on increasing its online presence and business, with sales in this segment up 66% following the launch of a new e-commerce platform in the summer.

“We have made further progress in the recovery of our business, with a major contribution from online and mainland China. Our profitability returned to positive territory and we were even able to accelerate our strong cash flow generation,” said Yves Müller, Spokesman of the Managing Board of HUGO BOSS AG.

“Continuing to drive the global recovery of our business will remain an important priority for us at the end of the year. At the same time, we will continue to push ahead with the implementation of our strategic initiatives in order to return to our previous growth course.

CEO Mueller declined to give analysts an outlook for the full year, as some stores in Europe were temporarily closed due to new blocking measures.

Technical Analysis: Shares recovering

Hugo Boss shares rose by more than 7% to make up for some of the enormous losses the share has recently suffered. Yesterday’s low of 19.39 was close to the low of 19.11 March, which is the lowest level of shares traded since 2009.

Hugo Boss daily stock chart (TradingView)

Buyers will now push for a longer and more sustainable recovery. To do this, shares will have to close above 10 p.m. each week in the hope of passing the 30 a.m. mark, where the June high is.

Summary

Hugo Boss’s third quarter profits meant that sales were not matched and operating profit was beaten as the sharp rise in demand in China helped the shares of the highly competitive luxury fashion group recover from the lows of the last eleven years.

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