Hugo Boss stock price soars to rebound from 11-year lows

Shares of Hugo Boss AG (ETR: BOSS) soared over 7% today after the luxury fashion company reported positive quarterly earnings report. 

Fundamental analysis: China fueling recovery

Hugo Boss saw its quarterly revenue plunge by 24% to 533 million euros to miss on the market’s consensus of 553 million euros. A revenue miss was offset by a beat on operating profit as Hugo Boss reported an operating profit of 15 million euros, higher than analysts’ expectations. 

Sales were mostly boosted by China (+27%) as acting Chief Executive Yves Mueller said that the trading activity in October was strong as well. China accounts for about 7% of total sales.

The Germany-based fashion firm witnessed a strong rebound in profit in the third quarter and reiterated that it remains focused on increasing its online presence and operations, with sales in this segment jumping by 66% after a new e-commerce platform was rolled out over summer. 

CEO Mueller declined to provide analysts with a full-year outlook as some stores in Europe were temporarily closed amid fresh lockdown measures.  

Technical analysis: Shares recover

Shares of Hugo Boss soared over 7% to recover a portion of huge losses the stock recorded lately. Yesterday’s low of 19.39 came close to matching March 19.11 bottom, which represents the lowest the stock traded since 2009. 

The buyers will now push for a longer and more sustainable recovery. For this to happen, shares need to close above 22.00 on a weekly basis with the hope of travelling above the 30.00 mark where June high is located. 

Summary

Hugo Boss third-quarter earnings resulted in a miss on revenue and beat on operating profit as soar in demand in China helped shares of the embattled luxury fashion group to recover from 11-year lows.