On Monday, Deutsche Bank adjusted its outlook on Hugo Boss shares, reducing the price target to EUR 52 from the previous EUR 58 while sustaining a Buy rating on the stock. The adjustment comes ahead of the company's third-quarter earnings report, slated for release on November 5.
The bank's analysis anticipates Hugo Boss to showcase steady operational performance in comparison to the second quarter, with a notable positive impact expected from the gross margin. The forecast includes a slight 0.7% growth in sales, factoring out foreign exchange influences, and a 0.4% decrease when including such effects. The sales growth is expected to be uneven across regions, with Europe projected to remain flat, the Americas to see a 5% increase, and the Asia-Pacific region to experience a 4% decline.
The gross margin is projected to see a substantial year-over-year improvement of around 80 basis points, reaching 61.5%. However, this positive development is likely to be overshadowed by negative operating leverage. Consequently, the bank forecasts an operating profit (EBIT) of EUR 90 million for Hugo Boss, correlating to an 8.8% margin, which is a decrease from the 10.0% margin reported in the third quarter of the previous year.
The detailed analysis by Deutsche Bank underscores specific expectations for Hugo Boss's upcoming financial results, highlighting the anticipated effects on sales growth, regional performance variations, and margin dynamics.
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