Hugo Boss has hailed “robust” sales growth in the second quarter and confirmed its outlook for the full year, despite failing to prevent a fall in earnings.

For the three months, net income slipped 7% to EUR54m (US$62.7m) from EUR58m in the year-ago period. Gross profit margin narrowed, down 80 basis points to 66.9% from 67.7%, mainly due to the decline in sales share of the group’s own retail business in the second quarter. Further investments in the product quality of Boss and Hugo also contributed to the development.

Group sales in the period totalled EUR653m, a 6% increase in local currencies on EUR636m last year. The group’s own retail business once again demonstrated its strength, with comp store sales growth of 5% thanks to gains in all regions and sales formats. Sales from the group’s own online business grew by 47%.

Meanwhile, Europe was the most dynamic region, with a currency-adjusted increase of 9% and growth in all its major markets. In the Americas, sales remained stable, while sales in Asia/Pacific benefited from further growth in the Chinese market in the quarter.

The group has been taking measures to return to sustainable and profitable growth, making further progress in the “systematic implementation of its strategic initiatives” in the second quarter, in particular the two-brand strategy focusing on Boss and Hugo.

Highlights in the period include the reopening of further Boss stores featuring the group’s new store concept, which it claims enhances the shopping experience by offering a variety of digital services.

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In addition, the first new concept Hugo Store opened in Amsterdam in June, featuring what the group calls “integrated social media offers”. Further Hugo stores will be opened in selected European cities, including Paris and London, in the second half of the year.

“Our strategic realignment is taking effect. We are right on track,” says CEO Mark Langer. “The sales growth in the second quarter speaks for itself: we achieved almost double-digit growth in Europe and were also able to continue our recovery in the challenging German market. Our collections are very well received at home and abroad. This is reflected both in the positive feedback from our wholesale partners and in the robust momentum of our retail business. The performance of our online store is particularly encouraging. I am therefore very confident that we will achieve our targets for the full year.”

Looking ahead, Hugo Boss has reconfirmed its outlook for the year, with sales growth expected to accelerate in 2018, with an increase in the low to mid single-digit range after currency adjustments.

Consolidated net income, meanwhile, is also forecast to increase at a low to mid single-digit percentage range.