A Hugo Boss store in Berlin, Germany, on Tuesday, April 25, 2023.
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Hugo Boss on Tuesday pointed to deteriorating U.S. consumer confidence, with uncertainty around tariffs, recession risks and immigration policy dampening both domestic and tourist spend in its largest single market.
CEO Daniel Grieder said U.S. shopper appetite had “certainly diminished” but that it was too soon to judge the real impact of U.S. policies after sales in the country declined 1% annually in the first quarter.
“We continue to monitor the situation,” Grieder said an earnings call. “Given the ongoing uncertainty around tariffs, it’s still too early to draw final conclusions.”
The U.S. is Hugo Boss’ largest retail market and a recent growth driver for the firm, accounting for approximately 15% of group revenues. However, it has no domestic U.S. manufacturing presence, with 40% of group exports to the country deriving from Europe and around 4% coming from China, according to the company.
Grieder said Hugo Boss’ exposure to U.S. tariffs was currently “well contained” but that it was pursuing several strategic steps to navigate the potential fallout.
Such measures include redirecting products coming from China to the U.S. and replacing them with products from other markets, optimizing the company’s global sourcing footprint and “evaluating demand-sensitive price adjustments.”
It comes as the high-end German retailer on Tuesday posted slightly better-than-feared first quarter sales and reiterated its full-year guidance despite macroeconomic and tariff uncertainty.
The high-end retailer said revenues fell 2% on a currency adjusted basis over the three month period to 999 million euros ($1.13 billion), slightly ahead of the 979 million euros forecast by analysts in an LSEG poll.
It also confirmed its 2025 outlook, forecasting full-year sales to be in line with last year’s at between 4.2 billion euros and 4.4 billion euros.
Shares rose as much as 8.8% on the news, with the stock last seen trading up 5.13% at around 12:39 p.m. London time.
Tariff uncertainty
Weaker sales continued to be led by Asia Pacific, down 8%, and specifically “ongoing subdued consumer demand in China” — a continued weak spot for the group. Europe sales were also down 1%.
“Following a strong finish to 2024, our performance in the first quarter of 2025 was affected by the rising macroeconomic uncertainty, which impacted global consumer sentiment and our industry,” Grieder said in a statement.
The company added that it is continuing to monitor the economic outlook, after Grieder noted in March that global trade tensions had had a visible impact on first-quarter demand.
“We are closely monitoring macroeconomic developments and remain vigilant in light of the elevated uncertainties, including the current tariff discussions,” he said.
Consumer goods companies have been assessing the potentially disruptive impact of U.S. tariffs on global supply chains and consumer confidence, with several firms flagging the likelihood of forthcoming price hikes.
Strategic overhaul
In a note Tuesday, Citi analysts wrote that any “major change in the external political or economic environment” that directly or indirectly affects consumer confidence would pose a “risk” to Hugo Boss’ sales performance.
Hugo Boss has been pushing ahead with its strategic overhaul agenda in recent years as it seeks to revive waning consumer demand, which Grieder said had contributed to its slightly improved first quarter performance.
Yanmei Tang, analyst at Third Bridge, said the group had successfully expanded its appeal beyond formal wear, pointing to improvements in store formats, product diversification and engagement with younger consumers.
“However, areas like womenswear remain a weak spot, with no standout products or a clear strategy emerging,” she wrote in a note, adding that acquisition of an established female fashion brand could help accelerate the group’s growth agenda.
