Hugo Bos'S Annual Performance Is Worse Than Market Expectations.

Hugo Boss AG (BOSSn.DE) opened 3.9% lower on Wednesday, the biggest drop in 5.8%.

In the fiscal year ended December 31, 2014, group pre tax profits rose 0.9% to 437 million euros, less than 470 million euros in the market forecast.

Operating profit was 591 million euros, an increase of 4.6% over 2013.

The annual revenue growth is 5.8% to 2 billion 570 million euros, and the market is expected to be 2 billion 590 million euros, which is in line with the group's expected reduction in November last year.

The double digit growth of retail business is still the main driving force for growth.

The group said that the market environment in the four quarter deteriorated significantly compared with the previous quarter. Sales increased by 5.4% to 684 million euros compared with the same period in 2013, but fell 4.5% from 717 million euros in the three quarter.

It also failed to meet the market expectations of 699 million euros, while the fixed exchange rate was only 3%.

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Without significant growth, it was mainly driven by the expansion of the store network. The women's clothing brand BOSS Womenswear benefited from the contribution of creative director Jason Wu and led to other categories.

Asia Pacific and Europe have achieved above average group growth.

Quarterly operating profit was 167 million euros, an increase of 6.4% compared to the same period last year, also lower than the market forecast of 173 million euros.

UBS AG (UBSN.VX) UBS analyst said in the research report that Hugo Boss AG (BOSSn.DE) Hugo Bos season sales growth is not up to standard.

Kepler Cheuvreux analysts pointed out that the group did not perform well either in the German market or in the US and China.

Goldman Sachs Group Inc (NYSE:GS) Goldman Sachs analyst recommends that customers sell the group's shares.

Hugo Boss AG (BOSSn.DE)

Permira Advisers LLP, the largest shareholder of the UK private equity fund, has reduced its holdings for the three time last year, and its share holdings are now down to 32.2%.

The Group expects economic and political instability to continue in 2015, but is confident that growth can be achieved for sixth consecutive years.

According to the strategic growth plan released by the group in November last year, the group hopes to achieve high digit growth in the next few years and plan to increase its operating margin to 25%.

Hugo Boss AG (BOSSn.DE) Hugo Bos announced on the same day that it would withdraw the franchise from China, South Korea and the Middle East from partners to strengthen business control over the key emerging markets.

The group's specific measures are to take over 17 South Korean stores operated by partner TDCo before March 1st, and take over 21 Chinese stores responsible for Wenzhou's lofty department stores and new self distribution companies in Dubai before April 1st.

After April 1st, the total number of group stores in China reached 130.

This decision is consistent with the policy of "recycling franchise and store in the strategic growth plan" mentioned above.