As already announced in mid-January, the Metzingen fashion group Hugo Boss AG closed the 2023 financial year with a new sales record. The result also increased significantly. On Thursday, the company presented its final annual results and gave an outlook on the future. Given the persistently difficult conditions, this was rather restrained.
According to the figures now presented, group sales reached almost 4.20 billion euros last year. This exceeded the 2022 level by 15 percent. Adjusted for exchange rate changes, revenue grew by 18 percent.
Strong growth in Asia and America is boosting sales
The clothing retailer owed the significant increase to above-average growth in America and Asia. In America, sales increased by 21 percent (currency-adjusted +23 percent) to 955 million euros, in the Asia-Pacific region they even rose by 23 percent (currency-adjusted +32 percent) to 576 million euros.
In the EMEA region, which includes Europe, the Middle East and Africa, the group achieved an increase of eleven percent (currency-adjusted +13 percent) to 2.56 billion euros. Global license income amounted to 104 million euros, exceeding the previous year’s level by 13 percent.
The group wants to significantly increase the dividend
At 61.5 percent, the gross margin was slightly lower than in the previous year despite lower freight costs. The company cited “unfavorable exchange rate developments and an increasingly discount-intensive environment towards the end of the year” as the reason for this.
Thanks to the strong sales growth, the result was clearly improved. Operating profit (EBIT) rose by 22 percent to 410 million euros compared to the previous year, and the annual surplus attributable to shareholders reached 258 million euros, exceeding the 2022 level by 23 percent. In view of the strong earnings development, the board proposed an increase in the annual dividend from 1.00 to 1.35 euros per share.
CEO Daniel Grieder, whose contract was extended early this week until the end of 2028, sees the group on track given the strong growth. “2023 was another extremely successful year for Hugo Boss,” he said in a statement. “In the second full year of implementing our ‘Claim 5’ growth strategy, we have made great progress in all business areas and further accelerated the momentum of Boss and Hugo. These successes prove that we have the right strategy with ‘Claim 5’ to unlock the full potential of our brands.”
Persistent uncertainties are slowing growth
However, management was cautious about the near future. For the current year 2024, it is targeting sales growth of three to five percent to 4.30 to 4.45 billion euros. EBIT is expected to increase by five to 15 percent to between 430 and 475 million euros.
“With the forecast, the company takes into account the persistently weak consumer climate, which is currently weighing on global consumer spending, particularly in various European markets,” it said in a statement. “Geopolitical tensions, including the ongoing conflicts in Ukraine and the Middle East,” also represented “additional uncertainty” this year.
Given these “ongoing macroeconomic and geopolitical uncertainties,” management questioned its medium-term sales target. The plan was actually to increase sales to five billion euros by 2025. The company warned that the achievement of this milestone could be “slightly delayed” due to the difficult conditions.