The Metzingen-based fashion group Hugo Boss AG is still on the upswing. After surprisingly good business in the second quarter, the clothing supplier raised its annual forecasts for 2022 sharply on Wednesday evening.
CEO Daniel Grieder, who has been in charge of the company since June last year, saw the current results as confirmation of his course: “The significant acceleration of our business development in the second quarter is impressive proof of the successful implementation of our ‘Claim 5’ strategy, just one year after their introduction,” he said in a statement. “The renewal of our brand presence has been very well received by our customers worldwide and will continue to ensure strong brand dynamics.”
Strong increases in Europe and America allow quarterly sales to increase by 40 percent
According to preliminary figures, group sales in the months of April to June were 40 percent (currency-adjusted +34 percent) above the level of the same quarter of the previous year and reached a new record high of EUR 878 million. The comparative value from the pre-Corona year 2019 was exceeded by 29 percent after currency adjustments. “This represents a further acceleration from the first quarter, driven by particularly strong demand in Europe and the Americas,” the company said.
Currency-adjusted sales in Europe increased by 41 percent compared to the same period of the previous year, in America by 45 percent. The comparative figures for 2019 were exceeded by 36 and 38 percent respectively, adjusted for currency effects. In the Asia-Pacific region, the impact of the Covid-19 pandemic in China slowed development. Overall, currency-adjusted sales in the region reached the previous year’s level and were thus four percent below the comparative figure for 2019.
Hugo Boss was able to more than double its earnings before interest and taxes (EBIT): According to the figures available, operating profit rose from EUR 42 million in the same quarter of the previous year to EUR 100 million now. “This primarily reflects the strong sales growth and a noticeable improvement in the gross margin. The latter benefited in particular from an increase in products sold at full price,” the group explained. The comparative level of 2019 was thus exceeded by 25 percent.
The group is setting higher sales and earnings targets
In view of the latest development, the Management Board has raised its annual forecasts sharply, despite the “persistent macroeconomic uncertainties”. For 2022, he now expects sales growth of 20 to 25 percent to 3.3 to 3.5 billion euros, which would mean a new record in the company’s history. Previously, only an increase of 10 to 15 percent to 3.1 to 3.2 billion euros had been expected.
Earnings targets are now also much more optimistic. Management is targeting an increase in EBIT of 25 to 35 percent to 285 to 310 million euros. The previous forecast had only promised growth of 10 to 25 percent to 250 to 285 million euros. The group intends to publish its final results for the second quarter on August 3rd.