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FRANKFURT, Germany — Hugo Boss AG said it's maintaining its dividend at last year's level following the departure of its CEO last month after a series of profit warnings and strategic mishaps.
The company plans to pay a 3.62 euro per share dividend, unchanged from last year, the German fashion retailer said in a statement Thursday. The Bloomberg forecast was 3.65 euros. The company reiterated it expectsa "low double-digit" Ebitda decline this year amid weak sales in the U.S. and China, where it will close about 20 stores.
Claus-Dietrich Lahrs, CEO for eight years, resigned Feb. 25 after Boss cut its profit outlook for the second time in six months. The stock has shed 54 percent in the past 12 months. While the company's strategy of moving upmarket and expanding in high-design womenswear is sound, discounting at both ends of the price spectrum and a potentially protracted search for Lahrs' replacement are worrisome, Thomas Chauvet, an analyst at Citigroup, wrote in a March 9 report.
The series of lower outlooks contrasts with Hugo Boss’s announcement in August that it would accelerate store expansion after a rebound in European sales. Lahrs raised the budget for expansion that month even as clearing out inventory at third- party stores was already weighing on profitability. A slumping Asian market has led to discounting, which isn’t always in keeping with Boss’ luxury image, analysts said.
By Aaron Ricadela; editor: Nate Lanxon, Thomas Mulier and Phil Serafino.
