Hugo Boss increased sales and earnings in the first half of the year thanks to its new brand strategy. The CFO of the fashion group does not currently see any declining consumer sentiment among the company’s customers.
Hugo Boss is positive about the coming autumn/winter
The company recorded “very positive” demand in July, Yves Müller said on Wednesday at a conference call with journalists. He was very satisfied with the development both in the Americas region and in Europe. In addition, the lifting of the lockdowns in China had a positive impact. According to his statements, the company is therefore looking positively to the upcoming autumn/winter season despite the generally difficult market environment.
Group sales grew currency-adjusted by 42 percent to 1.65 billion euros. According to the Metzingen-based clothing manufacturer, it was the strongest half-year in the company’s history. The operating result also improved significantly from EUR 43 million in the previous year to EUR 140 million.
The bottom line is that Hugo Boss quintupled its profit compared to 2021 to 86 million euros. These business figures correspond to preliminary results for the second quarter, which Hugo Boss already published in mid-July. Sales and earnings in the second quarter already exceed the pre-pandemic time.
Higher margins and revenues per square meter
Hugo Boss has invested heavily in marketing to increase its earnings. In the first six months of the year, expenses increased by 61 percent to 138 million euros, which corresponds to 8.4 percent of group sales.
The expense appears to be worth it given the increased profitability. The operating margin increased from 3.8 to 8.5 percent. In the shops, the yield per square meter rose by 21 percent to 11,100 euros.
In the Americas and Europe regions, Hugo Boss grew strongly in the first half of the year, especially in its own retail business. In Asia, growth slowed due to pandemic-related store closures and reduced opening hours.
Outlook 2022
For the 2022 financial year, Hugo Boss continues to forecast record sales – despite the increased uncertainties in the first half of the year, such as inflation and the effects of the war in Ukraine.
CFO Müller admitted that the general propensity to consume is currently rather subdued. An increase in the forecast, as Hugo Boss made in mid-July, is therefore “rather unusual”. However, the company tried to anticipate this in its outlook.
Revenues are expected to increase by 20 to 25 percent to between 3.3 and 3.5 billion euros. EBIT should also increase by 25 to 35 percent.
Especially in times of recession fears, which weigh on consumer confidence, companies with leading brand perception perform better, the group expects in the annual report. (Fashion United / dpa)