Aug 3, 2022
Hugo Boss sales increased 34% in Q2
Aug 3, 2022
Germany-based Hugo Boss on August 3 confirmed earlier preliminary figures, saying currency-adjusted Group sales increased 34 per cent in the second quarter (Q2) of fiscal 2022 (FY22) compared to the prior-year period. In group currency, revenues were up 40 per cent to €878 million in the three-month period (Q2 2021: €629 million), marking the strongest Q2 in the history of Hugo Boss.
Sales once again significantly exceeded pre-pandemic levels, up 29 per cent compared to Q2 2019 (Q2 2019: €675 million). This represents a further acceleration as compared to the first quarter of 2022, driven by ongoing high consumer demand in Europe and the Americas. Momentum was fuelled by the rigorous execution of the company’s ‘CLAIM 5’ growth strategy introduced one year ago.
Across brands, momentum was fuelled by the successful branding refresh. Several marketing initiatives, in particular the global brand campaigns for Boss and Hugo, created strong buzz on social media and drove brand relevance among younger consumers such as Millennials and Generation Z. On top of that, the launch of various capsule collections including Boss x Khaby and Hugo x Mr. Bathing Ape created further excitement, the company said in a media release.
Consequently, both Boss and Hugo recorded significant double-digit sales improvements. Currency-adjusted revenues for Boss Menswear were up 35 per cent year over year and grew 29 per cent as compared to 2019. Sales for Boss Womenswear increased 23 per cent currency-adjusted, translating into growth of 6 per cent compared to 2019 levels. At Hugo, currency-adjusted sales were up 37 per cent, translating into growth of 39 per cent on a three-year-stack basis.
From a regional perspective, growth was particularly strong in Europe and the Americas, with both regions recording a further acceleration in momentum in the second quarter. Sales in Europe increased by 41 per cent year over year, translating into growth of 36 per cent compared to 2019 levels, both currency adjusted. This development was driven by double-digit improvements in key markets such as Great Britain, France, and Germany.
Also in the Americas, momentum remained strong in Q2 with currency-adjusted sales up 45 per cent compared to the prior year, thereby exceeding 2019 levels by 38 per cent with all markets contributing. In the important US market, where Hugo Boss continues to successfully foster its 24/7 brand image, revenue growth saw a further acceleration compared to the first quarter of 2022. In Asia/Pacific, currency-adjusted revenues remained on par with the prior-year level. Strong double-digit growth in Southeast Asia & Pacific compensated for a sales decline in mainland China, largely reflecting COVID-19-related temporary store closures throughout much of the second quarter. As compared to pre-pandemic levels, sales in Asia/Pacific were down 4 per cent.
All channels contributed to the strong performance in the second quarter. The Group’s digital business once more recorded double-digit growth, being up 11 per cent currency-adjusted against a particularly strong comparison base. Compared to pre-pandemic levels, total digital revenues more than doubled, up 128 per cent currency adjusted.
Also, in brick-and-mortar retail, Hugo Boss saw robust double-digit sales improvements, with currency-adjusted revenues up 38 per cent compared to the prior year and three-year-stack growth amounting to 19 per cent. In brick-and-mortar wholesale, on the other hand, currency-adjusted revenues increased 51 per cent, fuelled by wholesale partners’ strong demand for the latest Boss and Hugo collections fully reflecting the branding refresh. On a three-year-stack basis, growth accelerated to 18 per cent.
In light of the strong top-line performance in the second quarter, the operating profit (EBIT) more than doubled to €100 million (Q2 2021: €42 million). This development was also supported by a noticeable improvement in gross margin, mainly reflecting a higher share of full-price sales, as well as operating expense leverage. In doing so, the company was able to more than compensate for non-cash impairment charges of €15 million related to its store network in Russia. When compared to pre-pandemic levels, EBIT significantly improved by 25 per cent (Q2 2019: €80 million), the release added.
The company now forecasts Group sales in fiscal 2022 to increase between 20 per cent and 25 per cent to a new record level of between €3.3 billion and €3.5 billion (prior guidance: increase between 10 per cent and 15 per cent to a level of between €3.1 billion and €3.2 billion). EBIT is now expected to increase between 25 per cent and 35 per cent to a level of between €285 million and €310 million in 2022 (prior guidance: increase of between 10 per cent to 25 per cent to an amount of between €250 million and €285 million).
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