The Metzingen-based fashion group Hugo Boss AG returned to profitability in the 2021 financial year and, despite some uncertainties, expects double-digit growth in sales and earnings for the current year. The clothing supplier said this on Thursday when it presented its current annual report.
All market regions contribute to the high increase in sales
The company had already announced in January that it was able to surprisingly increase its sales in 2021 thanks to a strong final quarter. Revenues reached 2.79 billion euros and exceeded the level of the previous year, which was affected by the consequences of the Covid 19 pandemic, by 43 percent nominally and after currency adjustments. The comparative value of the pre-crisis year 2019 was missed by only one percent after currency adjustments.
The Group achieved strong growth in all market regions compared to 2020. Sales in Europe, the Middle East and Africa rose by 42 percent (currency-adjusted +41 percent) to 1.74 billion euros, in America they increased by 77 percent (currency-adjusted +78 percent ) to 543 million euros. In the Asia-Pacific region, sales amounted to 423 million euros and thus exceeded the previous year’s level by 23 percent (currency-adjusted +22 percent).
The consolidated profit amounts to 137 million euros
The high increase in sales and lower value adjustments ensured that the clothing supplier returned to profitability: Earnings before interest and taxes (EBIT) reached 228 million euros after an operating loss of 236 million euros had been posted in the previous year. Net profit attributable to shareholders was EUR 137 million. In 2020, the group had to accept a corresponding deficit of 220 million euros.
CEO Daniel Grieder, who has been at the helm of Hugo Boss since last summer, was satisfied with the “strong comeback” in 2021 and emphasized the “successful start” of the “Claim 5″ growth program. “Right from the start, our growth strategy has accelerated the momentum of our brands worldwide. The highly successful brand renewal and ongoing investments will make Boss and Hugo even more relevant,” he said in a statement.
In 2022, the group wants to achieve double-digit growth in sales and earnings
Despite the difficult framework conditions, the company is therefore expecting strong growth for the current financial year: a sales increase of 10 to 15 percent to a new record of 3.1 to 3.2 billion euros is forecast. In terms of the operating result (EBIT), Hugo Boss is aiming for an increase of 10 to 25 percent to 250 to 285 million euros. The consolidated result should reach a level of 150 to 180 million euros.
However, the clothing supplier warned of the “persistent uncertainties regarding the further course of the Covid 19 pandemic”. In addition, “the effects of a possible further escalation of the war in Ukraine on general economic and industry growth are difficult to assess”. The group had closed its stores in Russia for the time being on Wednesday and stopped “all of its own retail and e-commerce activities” in the country. According to the company, the business in Russia and Ukraine recently accounted for three percent of total sales.