Hugo Boss has revised its financial projections for fiscal year 2024 due to a tough second quarter, adjusting growth expectations and addressing sales impacts.
- The company now anticipates a modest sales increase of 1% to 4%, a reduction from its prior forecast of 3% to 6%.
- Operating profit expectations have also been lowered, with EBIT now expected to range from -15% to +5%, reflecting ongoing economic challenges.
- Key regions showed mixed results, with sales slumping in EMEA and Asia/Pacific but rising in the Americas.
- Despite challenges, Hugo Boss remains optimistic, aiming to leverage its strong brand momentum and focus on operational effectiveness.
Hugo Boss, a leading name in premium fashion, has recalibrated its financial outlook for 2024, citing a difficult second quarter influenced by macroeconomic challenges. The company now projects a sales increase of between 1% and 4% in group currency, translating to €4.20bn (£3.52bn) to €4.35bn (£3.65bn). This is a downward revision from the earlier forecast of a 3% to 6% growth.
Similarly, the expected EBIT for the fiscal year has been adjusted significantly. Initially predicted to rise by 5% to 15%, the new range suggests a potential decrease of 15% to an increase of 5%, corresponding to approximately €350m (£294m) to €430m (£361m). The adjustments reflect persistent macroeconomic and geopolitical uncertainties impacting global demand.
In the second quarter, Hugo Boss experienced a 1% decline in group sales compared to the previous year, amounting to €1.0bn (£84m). Noteworthy regional performance includes a revenue decrease of 2% in EMEA and a 4% drop in Asia/Pacific, whereas the Americas saw a positive growth of 5%.
Wholesale sales in brick-and-mortar establishments grew by 5%, but retail performance was less favorable, with a 2% decline indicative of reduced shop traffic. The operating profit, or EBIT, for Q2 reported a steep 42% year-on-year drop to €70m (£58m).
Analyzing product lines, Boss menswear saw a 2% decrease in currency-adjusted revenues compared to the prior year, while womenswear saw a slight 2% increase. The Hugo brand recorded a 3% uptick in currency-adjusted sales, fuelled by the introduction of the denim-centric Hugo Blue line.
CEO Daniel Grieder expressed confidence, noting the robustness of Hugo Boss’s brand strategy, which has continued to surpass 2019 revenue levels by over 50%. This growth strategy, over the past three years, has significantly boosted the brand’s market share and bolstered its market presence.
Despite current economic adversities, Hugo Boss remains committed to fostering brand growth and operational efficiency.
