Retail & Brands
HUGO BOSS records strong top- and bottom-line improvements in Q3 and confirms full-year outlook
• Currency-adjusted Group sales increase 15% to EUR 1,027 million
• Brand initiatives drive further momentum for BOSS and HUGO
• All regions and all channels contribute to sales growth in Q3
• EBIT increases to EUR 103 million in Q3; EBIT margin up 20 basis points to 10.0%
• Top- and bottom-line outlook for full-year 2023 confirmed
“At HUGO BOSS, we look back on a successful third quarter, marked by double-digit top- and bottom-line improvements,” says Daniel Grieder, Chief Executive Officer of HUGO BOSS. “In an increasingly challenging market environment, we once again claimed our position and gained further market shares globally, driven by our several brand, product, and distribution initiatives. 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."
Spectacular launch of Fall/Winter 2023 collections drives brand momentum
In the third quarter, BOSS and HUGO continued to build on the strong brand momentum of previous quarters, supported by the launch of the latest Fall/Winter 2023 collections. Those were accompanied by two 360° campaigns, each featuring a diverse all-star cast. Two spectacular fashion events further fueled brand heat in September. The new BOSS collection was showcased at an innovative, tech-inspired event at Milan Fashion Week, strongly propelling awareness and engagement on social media. HUGO, on the other hand, celebrated London Fashion Week with the launch of a joint capsule collection with brand ambassador Bella Poarch, specifically aimed at Generation Z. Altogether, these initiatives resulted in a highly successful activation of BOSS and HUGO fans, and double-digit sales improvements for both brands in the third quarter. Consequently, currency-adjusted revenues for BOSS Menswear increased by 12% year over year, while revenues for BOSS Womenswear were up 24%. At HUGO, currency-adjusted sales even expanded by 25%.
Broad-based growth with double-digit improvements across all regions
Growth in the third quarter was once more broad-based with double-digit revenue improvements across all regions. In EMEA, currency-adjusted sales increased by 12% year over year against a particularly strong comparison base, with all of the region's key markets contributing to growth. In the Americas, momentum further accelerated in the third quarter with an increase of 22% currency-adjusted. This includes a 20% plus in the U.S. market, with all consumer touchpoints contributing to growth. The latter mainly reflects the improved perception of BOSS and HUGO as 24/7 lifestyle brands following the successful implementation of various strategic initiatives as part of “CLAIM 5.” In Asia/Pacific, currency-adjusted revenues came in 21% above the prior-year level. This performance was driven by double-digit sales improvements in both South East Asia & Pacific and China, with the latter posting currency-adjusted growth of 17% year over year.
All consumer touchpoints record further sales improvements
From a channel perspective, all consumer touchpoints contributed to growth in the third quarter of 2023. Revenues in the Group’s digital channel increased by 25% currency-adjusted. All digital touchpoints contributed with double-digit improvements, from the Group’s digital flagship hugoboss.com to digital revenues generated with partners. The brick-and-mortar retail business recorded currency-adjusted growth of 8% compared to the prior year. The vast majority of the increase was related to further store productivity improvements, while additional selling space only had a minor impact. Currency-adjusted sales in brick-and-mortar wholesale even increased by 21%, fueled by wholesale partners’ robust demand for the BOSS and HUGO Fall/Winter 2023 collections. Besides a strong order intake, this performance also reflects a double-digit increase in the Group’s replenishment business. The latter allows HUGO BOSS to react to short-term demand from its wholesale partners.
Robust top-line growth and efficiency gains drive double-digit improvements in EBIT
In the third quarter of 2023, HUGO BOSS increased its operating profit (EBIT) by 12% to EUR 103 million (Q3 2022: EUR 92 million). Consequently, the Group’s EBIT margin increased 20 basis points to 10.0% (Q3 2022: 9.9%). This mainly reflects the robust top-line performance in Q3, enabling the Company to generate operating leverage, first and foremost by driving further efficiency gains in brick-and-mortar retail. At the same time, at 60.7%, the gross margin remained broadly on the prior-year level (Q3 2022: 60.8%).
HUGO BOSS confirms outlook for full-year 2023
In light of the robust financial performance in the third quarter, HUGO BOSS confirms its top- and bottom-line outlook for fiscal year 2023, which had been revised upwards twice during the year. At the same time, the Company remains vigilant with regards to ongoing high levels of geopolitical tensions as well as macroeconomic uncertainties, which could weigh on consumer sentiment also going forward. Accordingly, the Group continues to expect sales in 2023 to increase by between 12% and 15% to a new record level of between EUR 4.1 billion and EUR 4.2 billion. Equally, HUGO BOSS continues to forecast EBIT to increase between 20% and 25% to a level of between EUR 400 million and EUR 420 million in 2023.