Hugo Boss reported improvements in Q1 2024, which it attributed to its ‘Claim 5’ strategy, aiming to harness growth and improve efficiency at the company.

However, Pippa Stephens, senior apparel analyst at GlobalData said Q1 2024 marked a slowdown for the fashion giant after a strong Q4 2023.

She explained: “Hugo Boss’ impressive growth trend came to an end in Q1 FY2024, with group sales up just 4.8% to €1bn ($1.07bn), a notable slowdown from the increase of 10.1% experienced in H2 FY2023, as macroeconomic challenges begin to weigh on its top line.”

Group sales at Hugo Boss totalled €1.14m, up 5% or 6% once currency-adjusted, as the company reported improvements across “both brands, all regions and all distribution channels”.

Hugo Boss says its HUGO range was boosted by the successful launch of its new denim brand – HUGO BLUE in Q1 2024.

Key results for Hugo Boss in Q1 2024

  • Group sales increased 5% to €1.014m, up 6% once currency-adjusted.
  • Inventories declined 2%, leading to a free cash flow of more than €13m.
  • Digital sales grew 10% on a currency-adjusted basis, as in-store sales increased 3%.

While Hugo Boss said it performed well across all regions, the Americas were a particular source of success, reporting an 11% increase in revenue, compared to just 5% in the EMEA region.

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In China, Hugo Boss reported that sales “remained below the prior-year level” which it attributed to “overall muted local demand”.

What next for Hugo Boss?

Hugo Boss CEO Daniel Grieder commented: “In a volatile market environment, we remain focused on rigorously executing our ‘Claim 5’ strategy, capitalising on our numerous growth opportunities. By leveraging our strong business platform, we remain equally committed to realising further efficiencies. All of this will enable us to continue our profitable growth trajectory also in 2024.”

Stephens agreed the current economic climate meant that Hugo Boss’ Q1 results were “still reasonable”.

She added: “Its premium positioning is also allowing it to retain some desirability with the superior quality and longevity of its products appealing to shoppers seeking value for money while their discretionary incomes are squeezed.

“This result has driven the brand to retain its outlook for the full year, with reported sales expected to rise between 3% and 6%, and after its EBIT grew 6.2% in Q1 to reach €69m, it still anticipates this will increase by between 5% and 15% in FY2024.”

Hugo Boss said it “remains vigilant with regard to persistently high levels of macroeconomic and geopolitical uncertainty” and expects this to impact consumer sentiment in FY24. The company expects group sales to increase between 3% and 6% in 2024, to hit a total between €4.3bn and €4.45bn.

In Q4 2023, Hugo Boss reported a 13% jump in group sales to €1.17bn ($1.27bn) for the fourth quarter as EBIT rose 17% to €121m on the back of strong brand momentum and successful execution of its Claim 5 strategy.