Retail & Brands
HUGO BOSS records ongoing strong momentum in Q3 and raises full-year outlook
- Currency-adjusted Group sales increase 18% in Q3; +27% compared to 2019 levels
- Momentum in brick-and-mortar retail accelerates in the third quarter (+25% vs. 2019)
- Double-digit revenue improvements across both brands, all regions, and all channels
- EBIT amounts to EUR 92 million in Q3; 8% above the prior-year level
- FY 2022 outlook raised: sales to grow between 25% and 30% to a record level of between EUR 3.5 billion and EUR 3.6 billion; EBIT to increase between 35% and 45%
In the third quarter of 2022, HUGO BOSS posted significant top-line growth, thereby continuing its strong momentum from the previous quarter. This development was once more fueled by the successful execution of several brand and product initiatives as part of the Company’s “CLAIM 5” growth strategy. Group sales increased by 18% currency-adjusted to EUR 933 million (Q3 2021: EUR 755 million), representing the highest quarterly sales in the history of HUGO BOSS. In Group currency, this corresponds to an increase of 24%. Compared to 2019 levels, currency-adjusted sales growth was 27% (Q3 2019: EUR 720 million).
Successful launch of Fall/Winter 2022 collections drives brand momentum
Across brands, exciting marketing and product initiatives continued to drive relevance for BOSS and HUGO. The global launch of the Fall/Winter 2022 collections was accompanied by two star-studded campaigns in August, building on the success of the comprehensive branding refresh initiated at the beginning of the year. Brand heat was further fueled by two exciting fashion shows. Both BOSS and HUGO showcased their new collections during Milan Fashion Week in September, thereby propelling brand awareness on social media and further tapping into a younger demographic. Strong sell-through rates, well above pre-pandemic levels, underline the success of both collections. Consequently, both BOSS and HUGO posted double-digit revenue improvements in the third quarter with robust growth across all wearing occasions. While currency-adjusted sales for BOSS Menswear were up 20% against the prior-year period, sales for BOSS Womenswear increased by 13% and thus strongly accelerated on a three-year-stack basis. At HUGO, currency-adjusted revenues also grew by 13% year over year.
Broad-based growth with double-digit improvements across all regions
Growth in the third quarter was once more broad-based with all regions recording double-digit sales improvements fueled by robust consumer demand. In Europe, currency-adjusted sales increased by 17% year over year, reflecting ongoing strong demand across key markets. Also in the Americas, momentum remained strong throughout the third quarter with currency-adjusted sales up 18% year over year. Compared to 2019 levels, momentum in the Americas therefore remained virtually at the level of the second quarter, with currency-adjusted sales up 35%. In Asia/Pacific, momentum also picked up strongly in the third quarter with revenues returning to double-digit growth. Significant double-digit improvements in South East Asia & Pacific spurred momentum in the whole region, with currency-adjusted sales consequently up 33% year over year.
Momentum in digital as well as in brick-and-mortar retail accelerates
All channels contributed to the strong performance in Q3 as reflected by double-digit sales improvements across all consumer touchpoints. Currency-adjusted growth in the Group’s digital channels accelerated to 20% compared to the prior-year period, reflecting both a double-digit sales increase in the Group’s digital flagship hugoboss.com as well as strong improvements in digital revenues generated with partners. Also momentum in brick-and-mortar retail remained strong, with currency-adjusted revenues up 18% compared to the prior year. On a three-year-stack basis, growth in brick-and-mortar retail even accelerated to 25%, with momentum strengthening across all three regions. In brick-and-mortar wholesale, currency-adjusted sales were up 18% year over year. While this development reflects ongoing robust demand from wholesale partners for BOSS and HUGO, delivery shift effects limited growth to some extent.
Operating profit up 8% despite ongoing brand and product investments
In the third quarter of 2022, HUGO BOSS increased its operating profit (EBIT) by 8% to EUR 92 million (Q3 2021: EUR 85 million), driven by the strong top-line performance. This more than compensated for a moderate decline in gross margin as well as an increase in selling and distribution expenses, with the latter mainly reflecting ongoing investments into the business as part of “CLAIM 5”. In particular, marketing investments increased by 39% year over year, first and foremost reflecting the two comprehensive brand campaigns and fashion events of BOSS and HUGO, aimed at driving brand relevance globally.
HUGO BOSS raises outlook for full year 2022
In light of the strong financial performance in the third quarter, HUGO BOSS raises its top- and bottom-line outlook for the current fiscal year. At the same time, the Company takes into account both ongoing investments into its business as well as persisting high levels of macro-economic uncertainty. Group sales for fiscal year 2022 are now expected to increase between 25% and 30% to a new record level of EUR 3.5 billion to EUR 3.6 billion (prior: increase
between 20% and 25% to a level of EUR 3.3 billion to EUR 3.5 billion). At the same time, EBIT in 2022 is now expected to increase between 35% and 45% to a level of EUR 310 million to EUR 330 million (prior: increase between 25% to 35% to an amount of EUR 285 million to EUR 310 million).