BERLIN (Reuters) - Shares in Hugo Boss fell 5 percent on Wednesday after the German fashion house reported another drop in online sales in the first three months of the year even though overall sales and net profit were better than expected.
Hugo Boss, which said in March it wanted to make improving its online business a top priority, said ecommerce sales were down 27 percent in the quarter due to a fall in the number of visitors to its website despite a revamp last year.
The shares were down 5.3 percent at 0820 GMT, making it the biggest faller on the Stoxx 600.
“Very disappointing are the reported Q1 sales numbers for the group’s own online business,” said DZ Bank analyst Herbert Sturm, who rates the stock “sell”, adding that a 3 percent fall in like-for-like retail sales was also disappointing.
The company, known for its smart men’s suits, is in the process of restructuring, slashing prices in China to bring them closer to European and U.S. levels, reshaping its sub-brands to appeal to a younger customer and closing loss-making stores.
Chief Executive Mark Langer admitted the online sales performance was very disappointing, saying the website took too long to load compared with rivals, and Hugo Boss had not offered enough lower-priced products to attract more price-sensitive online shoppers.
But he said Hugo Boss was working on those issues, plus improving the ranking of the website on search engines, saying he expected a significant improvement in online sales in the second quarter, as well as a lift to its store business.
Hugo Boss said net profit rose 25 percent to 48 million euros (40.3 million pounds) on sales up 1 percent to 651 million euros, beating average analyst forecasts for 46 million and 641 million respectively, according to a Reuters poll.
Hugo Boss said sales in China rose 3 percent, boosted by marketing on social media, with double-digit growth on a like-for-like basis on the mainland compensating for a weaker performance in Hong Kong and Macau.
Despite the online problems, the results, particularly in China, mirror signs for a pickup in demand for luxury goods after companies including LVMH, and Hermes recently reported a recovery.
In Europe, sales rose a currency-adjusted 3 percent, helped by local demand and a recovery in purchases by tourists, that had been hurt a year ago by attacks in France and Belgium, with sales in Britain up 7 percent.
Reporting by Emma Thomasson; Editing by Maria Sheahan/Keith Weir