Hugo Boss AG, Germany's largest clothes maker, said profit fell 27 percent in 2008 on one-time costs related to payments for departed managers and forecast a "challenging market environment" for the current year.
Net income declined to 112 million euros from 154 million euros a year earlier, the Metzingen-based company said yesterday in a statement handed out to reporters.
That missed the 126 million-euro median estimate of 13 analysts surveyed by Bloomberg News. Sales advanced 3 percent to 1.69 billion euros and gained 12 percent at the company's own shops.
The clothier, which sells suits online in the UK for as much as 579 pounds, said there is a danger of "increasing consumer restraint" because of declining economies.
A man shops for Hugo Boss clothing in Cologne, Germany. Bloomberg News
Consulting firm Bain & Co has estimated the 175 billion-euro luxury goods market may shrink 3 percent to 7 percent this year.
"Typical Boss buyers such as business people in London are getting fired and will probably think twice before buying a new expensive suit," said Tim Burkhardt, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart, Germany, before the figures were released. He has a "sell" recommendation on Boss.
Earnings before interest and taxes fell 14 percent to 190 million euros, and rose 9 percent to 226 million euros excluding the one-time costs, beating the company's reduced October forecast of 210 million euros to 220 million euros on that basis.
The payments for managers and other restructuring expenses totaled 36 million euros in the year, Boss said.
Sales, excluding currency swings, rose 6 percent, also meeting Boss's forecast for growth "at the lower end" of a 6 percent to 8 percent range.
New CEO
The executives who left the company last year included former Chief Executive Officer Bruno Saelzer, who is now chief of women's fashion maker Escada AG.
The clothier hired former Christian Dior SA chief operating officer Claus-Dietrich Lahrs as its chief executive officer in August.
Hugo Boss preferred shares rose 8 cents, or 0.7 percent, to 11.37 euros as of 9:25 am in Frankfurt.
The firm's stock has dropped 21 percent this year.
Annual sales rose 2 percent to 1.17 billion euros in Europe. They advanced 3 percent in America and jumped 21 percent in the Asia-Pacific region.
