Hugo Boss is making impressive progress in overcoming the tough trading environment for luxury goods, according to analysts.
Analysts at Deutsche Bank said the company, which is listed on the Frankfurt Stock Exchange, is outperforming its peers by continuing to invest in its brands and “keeping up the brand heat”.
The bank's analysts have upgraded their rating for the luxury clothing brand after its wholesale orders continued to grow in the double digits.
Analysts are impressed by the luxury retailer’s resilience in a challenging market environment.
They praised the company’s investments in its brands, productivity, market share gains and strong wholesale orders.
Deutsche Bank analysts expect Hugo Boss to continue its winning streak and generate more operating leverage in the months to come.
Earlier this month, the retailer reiterated its outlook for the full year after posting financial results for the third quarter broadly in line with expectations, including a 15% rise in sales to €1.03 billion.
Michael Kuhn, an equity research analyst at Deutsche, said it has upgraded its rating for the retailer from a ‘hold’ to a ‘buy’, while keeping the target price for its shares at €79 per share.
Those expectations represent a near-30% premium to its share price of €61.30 per share on Wednesday morning, which is trading up by 2.58% on yesterday’s closing price.
Deutsche previously downgraded the retailer in March, amid concerns that market conditions were worsening for luxury brands. Since then, its analysts said Hugo Boss’s shares have traded close to 10% lower.
While the company continues to demonstrate resilient growth, analysts noted that operating leverage will become an increasingly important metric for the retailer.