FRANKFURT German premium fashion house Hugo Boss BOSG_p.DE looks ahead to rising earnings in the second half of the year after cautious wholesale orders for the spring/summer collection dented its first-quarter performance.
"On the basis of the development in pre-orders for fall/winter, we are confident that 2010 will be a year of growth again for Hugo Boss," said Chief Executive Claus-Dietrich Lahrs.
Hugo Boss expects to see a positive development in sales and earnings in the second half of the year and aims to grow full-year revenue by a single-digit percentage rate with core earnings growing at a faster pace.
Hugo Boss, owned by private equity company Permira PERM.UL, surprised investors last week with a bullish earnings forecast for 2015, which sees core profits almost doubling.
The premium and luxury goods industry was hit hard by the global recession last year as the world's rich tightened their purse strings, but sales are seen recovering this year along with the global economy.
The first quarter, however, was still affected by cautious wholesalers, who posted their orders for the spring/summer collection about half a year ago when the prospects of an economic recovery were still vague.
First-quarter earnings before interest, tax, depreciation and amortisation before special items fell 12 percent to 92 million euros (80.1 million pounds) on sales of 444 million euros, down 8 percent, missing the average estimate in a Reuters poll of analysts.
Hugo Boss trades at about 15 times projected 2011 earnings, while Polo Ralph Lauren (RL.N), and Burberry (BRBY.L) are at a multiple of around 19 and 18 respectively, according to Thomson Reuters StarMine, which weights analysts' forecasts according to their track record.
Analysts blame lower visibility and sweeping management changes following the 2007 takeover by Permira for the discount.
(Reporting by Eva Kuehnen; Editing by Michael Shields)