Refreshed Hugo Boss powers ahead in Q1 as Europe, Americas sales surge
The first quarter was a strong one at German fashion giant Hugo Boss with the company saying that its brand momentum accelerated globally, driven by its successful branding refresh.
The company’s currency-adjusted group sales grew 52% to €772 million, which was 17% above the levels in 2019. And it saw ongoing "robust momentum" in Europe (with a 21% rise against the same quarter in 2019) and the Americas (which was up 17%).
Profit on an EBIT basis was €40 million in the quarter, well above the €1 million level in the previous year. And it confirmed its outlook for the full year with expectations of sales to increase between 10% and 15% to a new record of between €3.1 billion and €3.2 billion. Forecast EBIT should be within a range of +10% to +25% (or €250 million to €285 million).
“We have made a kickstart to fiscal year 2022, with record first-quarter sales,” said CEO Daniel Grieder. “Supported by our bold branding refresh, momentum for Boss and Hugo has accelerated around the globe. Together with the ongoing rigorous execution of our ‘CLAIM 5’ strategy, this provides us with strong tailwinds to achieve record sales in fiscal year 2022.”
Looking at the report in more detail, it said that the 52% rise in group sales marked the strongest first quarter in the history of the business from a top-line perspective. And on a reported basis, revenues increased 55%.
That was all helped by the firm’s reinvention of its Boss and Hugo brands that now have a much more casual focus and target a more youthful consumer.
The changes at the brands have been backed by major investment in refreshing them that included new product, record-breaking marketing campaigns, and digital relaunches.
This resulted during Q1 in 53% growth in currency-adjusted sales for Boss Menswear and 41% for its Womenswear, while Hugo was up 52% overall.
On a three-year-stack basis, currency-adjusted sales for Boss Menswear exceeded pre-pandemic levels by 17%, while sales for the Womenswear remained on par. At Hugo, currency-adjusted sales grew a strong 26% compared to 2019.
EUROPE AND AMERICAN STRENGTH
As mentioned, strong momentum in Europe and the Americas continued with currency-adjusted sales in Europe up 69%, translating into strong growth of 21% on a three-year-stack basis.
“This development represents a further acceleration as compared to the final quarter of 2021, driven by robust local demand across key European markets, particular in Great Britain and France,” the company said.
Also in Eastern Europe, momentum remained strong despite the war in Ukraine and the corresponding suspension of business activities in Russia.
In the Americas, currency-adjusted revenues were up 56% compared to the prior year, with all of the region’s markets recording sales increases versus pre-pandemic levels.
While the group’s business in Asia Pacific also saw “a promising start to the year”, renewed Covid-related restrictions “weighed on consumer sentiment and store traffic in mainland China towards the end of the quarter”. That meant currency-adjusted sales in mainland China remained 13% below the prior-year period but were up 12% versus 2019 levels.
Overall, revenues in Asia Pacific came in 3% above the prior-year level and only 1% below that of 2019.
The company added that its digital business (both its own webstores and transactions through partners) “successfully continued its double-digit growth trajectory”.
Despite being up against a particularly strong comparison base from the prior-year period, Q1 currency-adjusted sales increased 22%. And compared to 2019, total digital sales rose 145% currency-adjusted.
Physical stores thrived too with revenues up a strong 76%, partly reflecting long-lasting temporary store closures in the prior-year period. But revenues were still 5% above 2019 levels.
Meanwhile, physical store sales via wholesale grew 44%, marking the channel’s return to pre-pandemic levels with an increase of 2% compared to 2019, both currency-adjusted. This mainly reflects the strong demand of wholesale partners for the refreshed SS22 collections.
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