By Linda Pasquini
(Reuters) -Hugo Boss beat quarterly profit expectations on Tuesday despite warning of weak global demand, and said it would be only slightly affected by U.S. tariffs as it has lower exposure to the United States than many rivals.
Shares in the German fashion group rose 7% to their highest level in five months, after falling 9% this year by Monday’s close.
The company warned of persistently weak consumer sentiment globally and said demand in China remained subdued, but it confirmed its outlook for 2025.
It expects a low double-digit million euro hit to its gross margins from tariffs on imports into the U.S., which account for 15% of group sales, Chief Financial Officer Yves Mueller said in a media call.
The group’s “significantly lower” exposure to the United States than many rivals was an advantage, Mueller added, saying the company would be able to cushion the impact by hiking prices and keeping a flexible supply chain, among other factors.
Hugo Boss sources around 50% of its products sold in the U.S. from Europe, mainly Turkey, while it sources less than 5% of its goods sold in the U.S. from China, he said.
Other apparel makers source their products predominantly from Asia and were among the companies most severely impacted by the global trade war ignited by U.S. President Donald Trump’s sweeping tariffs.
Trump increased tariffs on imports from Turkey to 15% last week, up from a previous rate of 10%. He also set a 15% import tariff on most goods from the European Union.
“Overall, we can absorb this and are well prepared,” Mueller said.
Hugo Boss reported a 15% rise in earnings before interest and taxes to 81 million euros ($93.5 million) in the April-June quarter, beating analysts’ forecast of 77 million euros in a company-provided poll, aided by cost-cutting measures as a stronger euro weighed on sales.
The company plans to increase prices globally by low to mid single-digit rates for the spring 2026 collection, Mueller said.
Hugo Boss said consumer sentiment was still relatively weak in North America, although demand in the U.S. had improved in the second quarter from the first three months of the year.
“I think we did relatively well compared to the competition. And we also sold our collection particularly well,” Mueller said.
When converted into euros, Hugo Boss’ revenue fell 1% to 1 billion euros in the second quarter, roughly in line with a market forecast of 998 million euros.
Despite confirming it guidance, the company said it now expected sales in reporting currency in the Americas to remain at around last year’s level in 2025, capped by a weaker U.S. dollar against the euro. It had initially expected low single-digit percentage growth in the region.
($1 = 0.8663 euros)
(Reporting by Linda Pasquini in Gdansk, additional reporting by Ozan Ergenay, editing by Milla Nissi-Prussak and Susan Fenton)
