Stifel ditches 'buy' rating on Hugo Boss on margin pressure, weak demand
** Stifel says it got its "buy" rating on Hugo Boss BOSSn.DE wrong and cuts the German fashion house to "hold", citing near-term margin pressure and weak demand
** "We got it very wrong with our 'buy' call on Hugo Boss this year, being too complacent with mounting signs of slowing sales and earnings momentum since late 2023," it says
** Stifel flags that Hugo Boss facesweakening demand in key markets like the UK and China, growth normalisation in the U.S., risks of a slowing wholesale channel and a promotional environment since Q4 2023
** It adds that operating deleverage creates significant near-term margin pressure
** It also notes that the first profit warning under the CEO Daniel Grieder may not be the last if trading conditions in key markets do not improve going into 2025
** Thoughthe stock looks very cheap, the broker sees nocatalysts for re-rating
** The stock, which has lost 47% YTD, falls around 1% in early Frankfurt trade and isseen among the worst performers of Germany's mid-cap index .MDAXI
Reporting by Ozan Ergenay
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