METZINGEN (dpa-AFX) - Fashion retailer Hugo Boss expects slower growth until 2025 due to the consumer slump and geopolitical tensions. The sales target of five billion euros for 2025 is also likely to be "slightly delayed", the company announced in Metzingen on Thursday. At the same time, however, Group CEO Daniel Grieder and CFO Yves Müller want to improve profitability. Investors do not like the sluggish development at all. On Thursday morning, Hugo Boss shares lost almost a fifth of their value.

Group CEO Grieder made it clear in a telephone conference with journalists that the target of five billion euros in sales is likely to be postponed by months rather than years. In Europe in particular, consumers' reluctance to spend is paralyzing business. The wars in Ukraine and the Middle East are also making things more difficult. At the same time, Grieder is aiming for an operating margin of at least twelve percent by 2025.

This year, the Management Board expects growth of three to six percent to 4.30 to 4.45 billion euros in revenue. Analysts had hoped for more. Earnings before interest and taxes (EBIT) are expected to increase by 5 to 15 percent to between 430 and 470 million euros this year, resulting in a slight improvement in the corresponding margin. In addition to optimizing the business, the Management Board is hoping for lower product costs because raw material prices are falling.

Grieder refuted rumors of a hiring freeze. At the same time, the manager emphasized that he wanted to continue to invest money in marketing. In future, however, he wants to use the same budget to "compete more effectively" for the attention of customers.

Analysts were disappointed by the forecasts. "The appeal of the renewed brand is clearly no longer sufficient to meet previous growth expectations in a weak consumer environment," commented DZ Bank sector expert Thomas Maul. The management must now prove that the promised efficiency gains and cost savings can be realized and that the 2025 margin target is actually still achievable.

In the past year, Hugo Boss increased sales - as already known - by 15 percent to 4.2 billion euros and increased earnings before interest and taxes by more than a fifth to 410 million euros. At the bottom line, the company earned almost a quarter more at 258 million euros. Hugo Boss investors can look forward to a 35 percent higher dividend of 1.35 euros per share.

On Wednesday, the Supervisory Board had already extended the contracts of Group CEO Grieder and CFO Müller. Grieder will thus manage the fashion group until the end of 2028, while Müller will be responsible for finances until the end of 2027. Former Head of Sales Oliver Timm has also been appointed Deputy Chairman of the Management Board. Expert Michael Kuhn from Deutsche Bank Research assumes that he could take the place of CEO Grieder at a later date./ngu/men/mis