FRANKFURT (dpa-AFX) - Lower than expected profitability at the end of 2023 caused Hugo Boss shares to plummet on Tuesday. The shares slipped by more than 12 percent to 57.92 euros, their lowest level in two months. As a result, they held the red lantern in the MDax mid-cap index and also weighed on the share prices of Puma and Adidas. Luxury goods stocks were generally weak in Europe.

For the year as a whole, the fashion brand's revenues climbed by 15 percent to a record 4.2 billion euros. According to the figures, earnings before interest and taxes (EBIT) are likely to have improved by 22 percent to 410 million euros. However, analysts had expected more here.

Uncertainty on the market about the cause of the lower profitability could be one reason for the strong share price reaction. "We suspect that this could be due to a somewhat more competitive environment," wrote analyst Thomas Maul from DZ Bank in an initial reaction. The proportion of products that Hugo Boss sold at full price may have fallen. The expert assumes that market expectations for 2024 and the following years will now fall slightly.

Susy Tibaldi from UBS pointed out in an initial assessment that Hugo Boss had not yet provided any information on the gross margin, which is important in the industry, in the press release. At 10.3 percent, the published operating margin was below the consensus estimate. "This could spark concerns about the gross margin," said the expert for the luxury and sporting goods industry. The company has also not yet commented on inventories. Hugo Boss will announce details on March 7.

However, Tibaldi wrote that all in all, Hugo Boss had still done well considering the recent profit warnings from the fashion and sports world. She referred to the two British companies JD Sports and Burberry, which had spooked investors with lower profit forecasts at the start of the new Boss year./bek/niw/tih