Hugo Boss Q1 boosted by China, online and casualwear
Hugo Boss said that it's seen a solid start to the year as it revealed its first-quarter sales. Not that those sales rose. In fact they were down 8% currency-adjusted, or 10% in total to €497 million. But that's a good result compared to some of the devastation that it has seen over the past year and positive EBIT of €1 million was generated in Q1.
The group said that the ongoing strong dynamic in mainland China meant sales there almost doubled during the quarter and momentum was continuing in its online business with sales up 72%. That figure was helped by a strong performance in its own expanding online operations, as well as those of partners.
But there were plenty of weak spots too with lockdowns enforcing store closures so retail sales were down 14% in the first quarter, although wholesale rose 1% (both currency-adjusted). The wholesale channel benefited from a “robust” order intake for the SS21 collections of Boss and Hugo. Growth was also supported by shifts in the delivery of these collections largely from the second quarter into the first, “aimed at ensuring product availability after the lifting of lockdowns”.
While Boss and Hugo posted currency-adjusted sales declines of 8% and 6%, respectively, their casualwear offerings “once again stood out positively".
And overall, casualwear sales, which accounted for approximately 50% of total sales in Q1, returned to mid-single-digit growth. This reflected “healthy demand across all product categories", as well as strong sell-through of the latest Boss x Russell Athletic and Boss x NBA capsules.
“Despite ongoing implications of the pandemic, especially in Europe, we have seen a solid and promising start into the year,” said managing board spokesperson Yves Müller. “I am particularly pleased by the further progress along our strategic growth drivers – online, mainland China and casualwear – which have all seen momentum further accelerating. All this makes us confident for the remainder of the year as we expect both sales and EBIT to recover noticeably in the further course of 2021.”
Looking regionally, the company said that the negative implications of the pandemic continued to hurt European markets. Currency-adjusted sales in Europe decreased 17% to €299 million. With an average of almost half of the company’s own shops closed during the first three months of the year, it was clear that the result there would be bad. Weakness in several key markets, including the UK, France and Germany, piled on the bad news.
But sequential improvements in the important US business, as well as a robust performance in wholesale, boosted sales during the quarter. American currency-adjusted sales were down only 11% at €80 million as consumer sentiment rebounded.
And the strength that it saw in China helped drive sales in Asia-Pacific up a currency-adjusted 39% to €101 million. The Chinese success was helped by robust local demand in general as well as a successful Chinese New Year period.
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