Hugo Boss reports stronger than expected Christmas quarter

Hugo Boss Ag, for its fourth quarter reported currency-adjusted group sales increase of 4 percent or 5 percent in reported currency to 825 million euros (915.5 million dollars) on a preliminary basis. Hugo Boss sales, on a preliminary, non-audited basis, reached 2,884 million euros (3,200 million dollars), representing an increase of 3 percent in the reporting currency and 2 percent on a currency-adjusted basis.

“We look back on an encouraging fourth quarter. Thanks to a strong increase in sales and earnings, we have achieved our adjusted targets for fiscal year 2019,” said Mark Langer, Chief Executive Officer of Hugo Boss in a statement.

Hugo Boss achieves sales growth in Europe and Asia-Pacific

The company said, in particular, sales momentum in Europe accelerated in the final quarter and due to double-digit growth in Great Britain and France, currency-adjusted sales in the region grew 8 percent, while in Germany, an increase in sales in the company-owned retail business did not fully compensate for a persistently difficult wholesale business.

In the Asia/Pacific region, currency-adjusted sales rose 4 percent due to the ongoing strong sales momentum in Mainland China, where the group once again achieved double-digit growth. The company added that in line with expectations, the environment in Hong Kong, in contrast, remained difficult in the final quarter and weighed on sales performance in the US and Canada in the fourth quarter. Overall, currency-adjusted sales in the Americas decreased 7 percent in the final quarter.

In total, currency-adjusted sales in the company’s own retail business increased 7 percent in the fourth quarter with 3 percent rise on a comp store and currency-adjusted basis. Currency-adjusted sales in the wholesale business decreased 4 percent since the market environment in Germany and the U.S. remained particularly challenging and the intensification of online partnerships in the concession model weighed on the wholesale business.

The group anticipates that EBIT will amount to 333 million euros (369.4 million dollars) in 2019, excluding the effects of IFRS 16, which corresponds to a decrease of 4 percent compared to the prior year. Hugo Boss said, an increase in EBIT of 9 percent to 122 million euros (135.3 million dollars) in the final quarter largely compensated for the profit decline in the first nine months. Taking into account IFRS 16, EBIT on a preliminary basis in 2019 amounted to 344 million euros (381.7 million dollars) and was 1 percent lower than in the prior year. For the fourth quarter, this corresponds to an increase in EBIT of 12 percent to 124 million euros (137.5 million dollars) on a preliminary basis.

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