Hugo Boss shines in Q2 as branding refresh pays off
Hugo Boss is having a good year and it has just raised its full-year outlook on the back of accelerating momentum in Q2. It said the strength in the latest quarter was fuelled by the ongoing successful execution of its CLAIM 5 growth strategy, as well as the “bold branding refresh” of Boss and Hugo from the beginning of 2022.
For Q2, the company said currency-adjusted group sales grew 34% (40% on a reported basis) to €878 million year on year, and were also up up 29% against Q2 2019. It was the strongest second quarter ever in the history of the company, and was helped in particular by strong demand in Europe and the Americas.
Profit on an EBIT basis reached €100 million, well above the prior-year level of €42 million. This mainly reflects the strong group sales, as well as noticeable improvements in gross margin driven by an overall higher share of full-price sales. Compared to pre-pandemic levels, EBIT was up 25%.
The company said that in Europe, currency-adjusted sales were up 41% on the year, or 36% on a three-year comparison, with all major markets contributing.
In the Americas, Hugo Boss drove currency-adjusted sales growth of 45% on the year and 38% against three years ago.
But in Asia/Pacific, currency-adjusted revenues only remained “on par with the prior-year level”. Double-digit growth in South East Asia & Pacific compensated for a sales decline in China, largely reflecting Covid-19-related temporary store closures throughout much of the quarter. And compared to pre-pandemic levels, sales in Asia/Pacific were down 4%.
The company said its digital business “successfully continued its double-digit growth trajectory”. Despite being judged against a particularly strong comparison from the prior-year period, currency-adjusted sales were up 11%. Compared to 2019, total digital sales more than doubled, up 128% currency-adjusted.
In physical retail, it saw double-digit sales improvements, with revenues up 38% compared to the prior year. It was also up 19% against three years ago.
This was fuelled by wholesale partners’ strong demand for the latest Boss and Hugo collections fully incorporating the branding refresh. Currency-adjusted sales in physical wholesale grew 51%, or 18% against 2019.
And for the year, the company now expects sales to reach a record €3.3 billion at least, or possibly even €3.5 billion. That would mean an increase of between 20% and 25%. Meanwhile EBIT is expected to rise between 25% and 35% to anywhere from €285 million up to €310 million.
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