While hiring Jason Wu has given Hugo Boss's womenswear business a lift, it became clear Thursday that his design sensibility isn't going to carry the whole company.
The German apparel brand announced that its has cut its earnings forecast for the year due to weak sales in the US and China, citing "market deterioration" in the latter region. (Burberry also had a difficult time in both markets last quarter.) The company's total sales dropped 1 percent in the third quarter excluding currency effects. Earnings before interest, tax, depreciation and amortization dropped 8 percent.
The company now expects sales to increase between 3 and 5 percent for the full year, assuming it can keep comparable sales over the holiday period positive or at least stable. Earnings before interest, tax, depreciation and amortization are also expected to rise between 3 and 5 percent, down from an earlier forecast of a 5 to 7 percent increase.
Investors weren't pleased with the news. As of Friday morning, Hugo Boss's share price was down 10.18 percent to €91.80 — the company's biggest drop in four years.
Hugo Boss will report third-quarter results on Nov. 3.