Hugo Boss success story rolls on as brand refreshes pay off in Q3
Hugo Boss released its Q3 figures on Thursday, and talked of “strong momentum” as it raised its full-year guidance. It also reported currency-adjusted group sales up 18% on the year and up 27% compared to 2019.
It said momentum in physical retail accelerated in the third quarter and was up 25% vs 2019, while it saw double-digit revenue improvements across both the Hugo and Boss brands, as well as in all regions, and all channels.
The group now expects the full year to see sales growth of 25%-30%, reaching a record level of between €3.5 billion and €3.6 billion. Meanwhile, EBIT will increase by 35%-45% to between €310 million and €330 million. It previously expected a 25%-35% rise.
“We look back on an extremely successful quarter, in which our broad-based growth continued seamlessly,” said CEO Daniel Grieder. “Building on our strong brand momentum, we look forward to the important final quarter with confidence. Thanks to the relentless execution of our ‘CLAIM 5’ strategy, we are well on track to make 2022 not only a record year for Hugo Boss, but also a major milestone along our 2025 targets.”
As mentioned, group sales increased by 18%, which took currency-adjusted sales to €933 million, representing the highest quarterly figure in its history. In group currency, this corresponded to an increase of 24%.
It said the successful launch of its AW22 collections drove brand momentum with “exciting marketing and product initiatives” continuing to drive relevance for the two labels.
That included the launch of two celebrity campaigns in August, “building on the success of the comprehensive branding refresh initiated at the beginning of the year”; and two fashion shows during Milan Fashion Week, “thereby propelling brand awareness on social media and further tapping into a younger demographic”.
Strong sell-through rates, “well above pre-pandemic levels”, underlined its success and the two labels each saw double-digit revenue improvements in the third quarter, “with robust growth across all wearing occasions”.
Currency-adjusted sales for Boss Menswear were up 20% against the prior-year period, while sales for Boss Womenswear increased 13% and “thus strongly accelerated on a three-year-stack basis”. At Hugo, currency-adjusted revenues also grew by 13% year on year.
The group added that it saw “robust consumer demand” in Europe, where currency-adjusted sales increased by 17% on the year. In the Americas, “momentum remained strong” with sales up 18%. In Asia/Pacific, “momentum also picked up strongly” in the quarter with revenues returning to double-digit growth. “Significant” double-digit improvements in South East Asia & Pacific boosted the whole region, with currency-adjusted sales there up 33% year on year.
It saw strength in both digital and physical stores too. Currency-adjusted growth in its digital channels accelerated to 20% on the year, reflecting both a double-digit increase in its hugoboss.com e-flagship, and strong improvements in digital revenues generated with partners.
In physical retail, currency-adjusted revenues rose 18% on the year and were up 25% against three years ago. Physical wholesale was also up 18%, reflecting “robust demand”, although delivery shift effects limited growth to some extent.
Operating profit (EBIT) rose 8% to €92 million in the quarter with the profit rise lagging the sales rise as the company made ongoing brand and product investments, and saw “a moderate decline” in gross margin, as well as an increase in selling and distribution expenses.
In particular, marketing investments increased by 39%, reflecting the two comprehensive brand campaigns and fashion events of Boss and Hugo, aimed at driving brand relevance globally.
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