Hugo Boss banks on U.S., China for 2013 growth

METZINGEN, Germany Fri Jan 11, 2013 3:58am EST

A man looks at a shop window outside the Hugo Boss showroom inside a shopping mall in Mumbai August 23, 2011. REUTERS/Danish Siddiqui

A man looks at a shop window outside the Hugo Boss showroom inside a shopping mall in Mumbai August 23, 2011.

Credit: Reuters/Danish Siddiqui

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METZINGEN, Germany (Reuters) - German fashion house Hugo Boss is confident it will outperform the luxury market in 2013 thanks to a robust U.S. business and an expected uppick in China later in the year, its finance chief told Reuters.

"What we expect is an improvement over the course of the year," Mark Langer told Reuters in an interview at the group's headquarters in the small German town of Metzingen near Stuttgart. "I'm more cautious for the first quarter."

Hugo Boss, known for its sharply cut men's suits, expects to have a clearer picture of 2013 when it publishes full annual results in March because it will have already started taking orders for its autumn collection by then.

For 2012, Langer said he sees no reason to veer away from the group's forecast for currency-adjusted group sales growth of around 10 percent and core profit growth of 10-12 percent.

Hugo Boss in October posted flat third-quarter sales growth, prompting some concern over whether it could meet its 2012 targets.

"We saw growth speeding up in our wholesale business in the fourth quarter, as we predicted," Langer told Reuters. "Back then we confirmed a target for sales to grow by up to 10 percent and I am just as comfortable with that now."

Langer said the company would be sticking to a dividend payout ratio of 60-80 percent of net profit, meaning investors can expect a higher dividend for 2012.

Analysts on average currently expect a dividend of 3.22 euros ($4.25) per share for 2012, according to Thomson Reuters data, an increase of 11 percent on the payout for 2011.

Langer also said the group hoped to follow the example of London-listed rival Burberry and attract more U.S.-based investors with the launch of an American Depository Receipt program, for which he expects approval from the U.S. Securities and Exchange Commission in the next couple of weeks.

Such a scheme will allow funds that only invest in dollar instruments a chance to trade in its shares and indirectly boost trading volumes in Europe, he said.

(Editing by Maria Sheahan)

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