Hugo Boss AG, which suspended the two top executives in the US last week, cut its full-year profit forecast, citing "inventory discrepancies" at the unit they ran. The preferred shares of Germany's largest clothing maker dropped as much as 8.8 percent.
Net income will fall to about 95 million euros (US$87 million) this year from 107 million euros last year, spokesman Philipp Wolff said in an interview, also blaming lower-than-expected gains for Boss's women's line. He gave no details of the discrepancies.
"I'm really quite astonished because last week I called the company and they said I shouldn't worry about profit," said Philipp Mettler, who manages 500 million euros at Swiss Life Asset Management, including Hugo Boss shares. "I'm less worried about the profit warning and more worried about accounting issues which could be the reason for these inventory discrepancies."
Hugo Boss said Marty Staff, the US unit's chief executive officer, and Chief Financial Officer Vincent Ottomanelli were placed on "paid administrative leave."
The slowdown in the US contrasts with rivals such as LVMH Moet Hennessy Louis Vuitton SA, the luxury market leader, which said last month its first-quarter US sales rose 19 percent.
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