German fashion house Hugo Boss said it expected sales and profit growth to pick up during the rest of the year as it invests in its brand after reporting lower first-quarter net profit than expected.

Hugo Boss's reported net profit fell 7 percent to 75.6 million euros, missing average analyst forecasts for 82 million. Sales rose 9 percent to 668 million euros, just ahead of analyst consensus for 666 million.

Hugo Boss has been spending heavily in expanding its own retail network and increasing marketing.

Hugo Boss shares fell last month after it cut its sales target for 2015, hit by lower spending by Russian and Chinese shoppers like other luxury goods companies.

Boss said first-quarter sales in China fell 3 percent after adjusting for currency moves, while the company outperformed in Britain and Germany.

Chief Executive Claus-Dietrich Lahrs said Hugo Boss was suffering from the impact of muted consumer sentiment in Europe but the company expects sales and profit growth to accelerate as the year progresses, allowing it to confirm its outlook.

"We are convinced that we will return to stronger growth in the next few quarters," Lahrs said in a statement.

As Hugo Boss pulls back from wholesale and opens more own retail space, comparable store sales rose 3 percent on a currency adjusted bases, while wholesale sales fell 2 percent.

Best known for its premium menswear, Hugo Boss is expanding its clothing for women under the direction of designer Jason Wu. Womenswear sales rose 4 percent in local currencies compared to a 2 percent increase for menswear.

Boss reiterated on Wednesday that it expects a sales rise of a medium single-digit percentage on a currency-adjusted basis and earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for special items, to increase between 5 and 7 percent, compared with 6 percent in 2014. (Reuters)

Source: www.businessworld.ie