The persistently weak demand in China is causing problems for the fashion group Hugo Boss.

"Six percent currency-adjusted sales growth, six percent earnings growth - in our view, this is a solid start to the year," said CFO Yves Müller on Thursday. However, the consumer climate in some key markets has continued to deteriorate. Boss is feeling the effects of this above all in two markets that are important for the fashion group: China and the UK. "In both countries, the economic recovery is taking longer than most observers had expected." These prospects were not well received on the stock market - the shares listed in the MDax fell by more than three percent.

In the first quarter, Boss suffered losses in the high single-digit percentage range in China, where the Group generates eight percent of its consolidated sales including Hong Kong, Macau and Taiwan. In contrast, the men's and women's outfitter was able to gain market share in the USA and achieve double-digit growth there. The online business also provided a tailwind with double-digit growth rates. Overall, the Group achieved sales of 1.014 billion euros and an operating profit (EBIT) of 69 million euros in the period from January to March. The operating return on sales (EBIT margin) improved to 6.8% (previous year: 6.7%).

Müller confirmed the annual targets: Following record figures last year, Boss is aiming for a three to six percent increase in sales to between 4.3 and 4.45 billion euros in 2024. EBIT is expected to increase by five to 15 percent to between 430 and 475 million euros. Boss is continuing to work on improving efficiency in areas such as procurement, said Müller. In addition, declining inventories are providing relief.

Boss had recently announced that it expected significantly slower growth in the coming years. "Against the backdrop of ongoing macroeconomic and geopolitical uncertainties, the achievement of the sales target for 2025 of five billion euros could be delayed," it said at the beginning of March. Müller has now announced that the target will probably be delayed by several months.

(Report by Anneli Palmen, edited by Sabine Wollrab. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)