Investing.com -- UBS Global Research has downgraded Hugo Boss (ETR:BOSSn) AG and Puma (OTC:PMMAF) SE in a note dated Friday, citing growing macroeconomic challenges and intensifying competition.
Hugo Boss was cut to "neutral" from "buy," while Puma was downgraded to "sell" from "neutral." The revisions reflect concerns over slowing sales momentum, margin pressures, and a more uncertain outlook for the apparel and footwear sectors.
For Hugo Boss, UBS noted that despite a stronger-than-expected fourth-quarter performance in 2024, with 6% growth surpassing consensus estimates of 2%, the company has struggled to maintain that momentum.
Retail foot traffic declined in January and February, leading UBS to cut earnings estimates for 2025, 2026, and 2027 by 5%, 13%, and 15%, respectively.
Revenue growth is now expected to be flat in 2025, and the full-year sales forecast has been lowered by 5%.
The EBIT margin is projected to decline by 40 basis points to 9.1%, at the lower end of management’s guidance.
UBS also slashed its price target from €49 to €38, a 22% drop, citing limited upside potential given the broader economic headwinds.
Puma faces deeper structural issues that extend beyond short-term market conditions. UBS highlighted a rapidly evolving competitive landscape, particularly in the wholesale channel, where Adidas (OTC:ADDYY) and Nike (NYSE:NKE) are regaining ground.
The brokerage also raised concerns about Puma’s shift toward direct-to-consumer sales, which now account for 28% of revenue but are diluting margins.
With revenue growth expected to be flat in 2025 and only modestly improving to 2% in 2026, UBS sees a prolonged period of weak performance.
EBIT margin is projected to fall to 5% in 2025 from 7.1% in 2024, and UBS has cut its price target by 56%, to €19.5 from €43.9.
Both downgrades point to a challenging road ahead, as economic pressures and shifting competitive dynamics weigh on profitability and growth.