Announcing its full second quarter 2022 results today (3 August), Hugo Boss says marketing initiatives under its brand renewal increased relevance for younger consumers such as Millennials and Generation Z, with current Hugo and Boss collections arousing the interest of these target groups and leading to high sales rates.
In addition, the launch of various capsule collections such as Boss x Khaby and Hugo x Mr. Bathing Ape generated additional positive feedback. As a result, both Boss and Hugo posted significant double-digit increases in sales. Currency-neutral Boss menswear sales increased 35% year over year and increased 29% compared to 2019. Currency-neutral Boss womenswear sales increased 23%, representing growth of 6% compared to 2019.
Currency-adjusted sales at Hugo, meanwhile, increased by 37%. On a three-year basis, this corresponds to an increase of 39%.
From a regional perspective, Hugo Boss grew particularly strongly in Europe and America, with momentum accelerating further in the second quarter. In Europe, currency-neutral sales grew 41% year over year, up 36% from 2019. In America, too, momentum remained unbroken in the second quarter with a currency-adjusted increase of 45% compared to the previous year.
Currency-adjusted sales in the Asia/Pacific region remained at the prior-year level. Strong double-digit growth in Southeast Asia & Pacific offset a decline in sales in mainland China primarily due to Covid-19-related temporary store closures throughout much of the second quarter. Compared to pre-pandemic levels, sales in Asia Pacific fell 4%.
As announced in July, in group currency, revenues were up 40% in the second quarter to EUR878m, compared to EUR629m a year earlier, marking the strongest second quarter in the history of Hugo Boss.
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Against the background of the strong sales development in the second quarter, the operating result (EBIT) more than doubled to EUR100m from EUR42m a year earlier.
“We grew impressively in the first half of the year. This development reflects the numerous successes of our comprehensive brand renewal,” says Daniel Grieder, CEO of HUGO BOSS. “We have significantly increased the relevance of BOSS and HUGO within a very short time. With this momentum, we will continue to work consistently on the implementation of our ‘Claim 5’ growth strategy and pursue our ambition of being one of the 100 leading brands worldwide.”
Due to what it called the strong business development in the second quarter, Hugo Boss raised its sales and earnings forecast for the current fiscal year. The company now expects to be able to increase consolidated sales by 20-25% to a new record level of EUR3.3-EUR3.5bn in the 2022 financial year. This is up from prior guidance of a 10-15% rise to between EUR3.1bn-EUR3.2bn.
EBIT in 2022 is now expected to increase between 25-35% to between EUR285m-EUR310m, up from previous forecasts of EUR250m-EUR285m.
Brand refresh continues to prove highly successful
GlobalData associate apparel analyst Louise Deglise-Favre says Hugo Boss continued to build on its impressive first quarter (+55.3% year-on-year), reaping the benefits of its January 2022 brand refresh.
“This latest set of results prompted the brand to raise its FY sales and profit guidance, with both now expected to be roughly 10ppts more than previously indicated (revenue growth of 20% to 25%, and operating profit growth of 30% to 35%), despite high inflation crippling many consumers’ discretionary incomes.”
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