Hugo Boss CEO Mark Langer has hailed 2018 as a “good year” for the German fashion brand but promised 2019 will be even better with strong momentum in the group’s own online business and in Asia set to make a “significant contribution”.
For fiscal 2018, Hugo Boss grew currency-adjusted sales by 4%, an increase the firm attributes to the “dynamic growth” of the group’s own retail business. In its own online business, Hugo Boss recorded double-digit growth of 41%, recording, for the first time, more than EUR100m in sales.
All regions recorded currency-adjusted sales increases. In Europe, currency-adjusted sales grew by 4%, driven by double-digit growth in Great Britain. The Americas also recorded a currency-adjusted sales increase of 4%, mainly due to mid-single-digit growth in the US, while sales growth in Asia/Pacific benefited from high single-digit growth in the Chinese market. Adjusted for currency-effects, sales in Asia/Pacific grew 7%.
Meanwhile, EBIT rose by 2% but the EBIT margin declined by 10 basis points. Net income was also up by 2% in the period.
“2018 was a good year for Hugo Boss. 2019 will be an even better year for our company,” Langer said. “The current year will be all about the execution of our Business Plan 2022. With the focus clearly set on our strategic priorities, we are ensuring profitable growth in 2019 and beyond. Strong momentum in our own online business and in Asia will make a significant contribution this year.”
In November, Hugo Boss outlined a new strategic business plan, designed to increase the desirability of its Boss and Hugo brands through investments in speed and personalisation. The company also revealed targets to increase group sales by an average of between 5%-7% per year through the expansion of its online business and exploiting its growth potential in Asia.
For 2019, the group expects to increase currency-adjusted sales at a mid-single-digit percentage rate. All regions will contribute to this, with “overproportionate” growth expected in Asia/Pacific.
Meanwhile, for the group’s own retail business, sales in 2019 are expected to grow at a mid- to high single-digit percentage rate on a currency-adjusted basis. The forecast is based on the assumption that comp store sales will grow at a mid-single-digit percentage rate. In addition, the online business will continue to contribute over-proportionately to the growth of the group’s own retail business again in 2019.
Operating income (EBIT) is expected to grow at a high single-digit percentage rate in 2019, hence faster than sales. The group’s net income should also grow at a high single-digit percentage rate compared to the prior year.