Tough times ahead for Hugo Boss

German fashion house Hugo Boss expects challenges in China and the US market to suppress sales growth next year, but it said it would keep investing in its website and stores.

In a presentation released ahead of an investor day on Tuesday, Hugo Boss said it expected 2016 sales growth below its long-term target for a high single-digit rise and said it would only reach its 2020 target for a core earnings margin of 25 percent if the overall market recovered.

However, it said lower capital expenditure and a further improvement in it management of working capital would help boost free cash flow in 2016.