Daily Newsletter

02 November 2023

Daily Newsletter

02 November 2023

Hugo Boss sales streak continues in Q3, despite slowing consumer demand

German fashion brand, Hugo Boss has reported sales that beat analyst expectations for the third quarter ending 30 September and confirms its FY23 outlook.

Isatou Ndure November 02 2023

Third quarter revenues at Hugo Boss increased 15% in the third quarter of 2023 to €1.03bn from €933m the previous year, roughly in line with analysts' estimate of €1.02bn in a poll provided by the company.

The revenues for Boss menswear and womenswear increased by 12% and 24%, respectively, while sales at Hugo expanded by 25% (currency-adjusted).

Sales in EMEA increased by 12% after the currency adjustment. In the Americas, sales increased by 22%, including a 20% rise in the US market. Asia/Pacific revenues rose by 21% after currency adjustment, with China posting 17% growth.

Revenues in digital channels increased by 25%, while brick-and-mortar retail businesses recorded 8% growth. Currency-adjusted sales in brick-and-mortar wholesale increased by 21%, fuelled by demand for Boss and Hugo’s fall/winter 2023 collections.

Key results from third- quarter:

  • Revenues increased 15% to €1.03bn
  • EBITDA increased to €188m from €176m the previous year
  • Net income increased to €63m compared to €60m in 2022

“In an increasingly challenging market environment, we once again … gained further market share globally, driven by our several brand, product, and distribution initiatives,” said Hugo Boss chief executive officer Daniel Grieder.

Hugo Boss confirms outlook for full-year 2023

Considering its “robust performance” the group has confirmed its top and bottom-line outlook for fiscal year 2023, which had been revised upwards twice during the year.

The company said it will remain vigilant on current geopolitical tensions and macroeconomic uncertainties, which could drag consumer sentiment in the future.

Hugo Boss maintains its anticipation of sales growth in 2023, ranging from 12% to 15%, reaching a level between €4.1bn and €4.2bn.

Equally, the brand still predicts that EBIT will rise between 20% and 25%, reaching a range of €400m to €420m in 2023.

Hugo Boss increased its operating profit (EBIT) by 12% to €103m and EBIT margin increased 20 basis points to 10% and at 60.7%, the gross margin remained broadly at the prior-year level.

“Building on our strong brand momentum, we are well on track to achieve our financial targets and make 2023 another record year for Hugo Boss," added Greider.

Last week (27 October), Hugo Boss invested more than €100m ($105m) in expanding its distribution centre in Filderstadt-Bonlanden, Germany, as part of its "CLAIM 5" growth strategy.

Traditional AI is here to stay in the retail and apparel space

Initially, retailers used AI for basic tasks, including inventory management and demand forecasting. However, its usage has now become more prevalent in other aspects such as personalized marketing, customer service, pricing optimization, and supply chain management. With the rise of ecommerce and the increasing importance of data-driven decision-making, AI adoption in retail and apparel has accelerated. The industry now relies on AI to enhance the shopping experience, optimize business operations, and gain an overall competitive edge.

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