HUGPF - Hugo Boss: Sales Should Grow Into Brick-And-Mortar Investments

2024-07-02 02:15:16 ET

Summary

• The brick and mortar investments are basically completed, so shareholders today can see the benefits from sales growing into that larger footprint.
• Other areas of operating leverage are kicking in thanks to fixed back end.
• In general, there are less geographic risks, being an EMEA focused group with limited concerns around China or even the risk of a slowing US for whatever reason.
• Hugo Boss's multiple is also compelling.
• However, fashion is inherently risky and fickle. Also, the risk of lower expendable incomes is present, making even the 10x PE and GARP prospect not a slam dunk.

Fashion and apparel in general has been seeing some turbulence lately. To name a few, Burberry ( BURBY ) and Kering ( PPRUF ), in higher fashion, saw just as intense declines as Nike ( NKE ) which has lately reported issues itself, although different in nature - more to do with upstarts taking share . Hugo Boss ( HUGPF )( BOSSY ) has noticeably overperformed, although still declined particularly from peaks....

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