Hugo Boss sales decline, expects recovery towards second half of 2021

In the fourth quarter of 2020, currency-adjusted sales for Hugo Boss decreased by 26 percent, corresponding to a sales decline of 29 percent in group currency to 583 million euros. The company said in a statement that despite the significant sales decrease, Hugo Boss was able to record a positive EBIT of 13 million euros compared to 124 million euros in the fourth quarter of 2019. The company recorded a currency-adjusted sales decline of 31 percent in fiscal year 2020, while in group currency, sales decreased by 33 percent to 1,946 million euros.

“For Hugo Boss, 2020 was undoubtedly a challenging year. I am proud that we have managed to overcome the many challenges of the pandemic, ending the year with a positive free cash flow,” said Yves Müller, Spokesperson of the managing board of Hugo Boss AG, adding, “We have made significant progress along the execution of our strategic initiatives – especially in the important online business, and in China. Although the pandemic continues to have a severe impact on our business in the short term, I am highly confident when it comes to the further recovery of our business in the course of the year.”

Review of Hugo Boss FY20 results

The group’s own retail business and its wholesale business recorded double-digit sales declines in fiscal year 2020. On average, around 20 percent of the company’s more than 1,000 own points of sale globally were closed in 2020. From a brand perspective, the company added, decline in sales was slightly lower for Hugo than for Boss, with both brands’ casualwear offerings performing significantly better than formalwear.

The company saw its own online business performed very strongly, with a currency-adjusted sales increase of 49 percent. Hugo Boss has managed to break the 200 million euros mark with its annual online sales for the first time in its history. This was also supported by the successful expansion of the company’s online flagship store to 32 additional markets. During the second quarter, the company was able to return to its double-digit growth trajectory in China and managed to keep this momentum throughout the remainder of the year. Overall, currency-adjusted sales in mainland China grew by 5 percent in 2020. Overall, at 343 million euros, currency-adjusted sales in Asia/Pacific came in 20 percent below the prior-year level.

In Europe, currency-adjusted sales were down 31 percent to 1,231 million euros, while currency-adjusted sales in Americas decreased by 42 percent to 308 million euros in fiscal year 2020. Currency-adjusted sales in the company’s own retail business declined by 30 percent to 1,279 million euros and on a comp store and currency-adjusted basis, sales were down 32 percent on the prior year level. Amounting to 221 million euros, online sales were up 49 percent on the prior-year level, currency-adjusted. In the wholesale business, HUGO BOSS recorded a currency-adjusted sales decline of 34 percent to 603 million euros in fiscal year 2020, while the license business recorded a currency-adjusted sales decrease of 23 percent to 64 million euros. While BOSS recorded a currency-adjusted sales decline of 32 percent, sales at Hugo were down 27 percent, currency-adjusted.

Hugo Boss Q4 performance in core markets

Currency-adjusted sales in Europe decreased by 32 percent to 327 million euros over the three-month period, in the Americas, decline in sales was limited to 28 percent. Due to another quarter of strong double-digit 24 percent sales increase in mainland China, overall sales in Asia/Pacific, at minus 3 percent, came in only slightly below the prior-year level to 124 million euros.

Currency-adjusted sales in company-owned retail were down 24 percent, amounting to 418 million euros, while comp store sales declined by 28 percent, currency-adjusted. At 80 million euros, currency-adjusted online sales were up 33 percent on the prior-year level. In the wholesale business, currency-adjusted sales declined 33 percent to 143 million euros, while sales in the license business decreased by 16 percent to 22 million euros. While Boss recorded a decrease in currency-adjusted sales of 27 percent in the fourth quarter, the decline for Hugo was 23 percent.

Hugo Boss expects recovery towards the second half of the year

The company expects that particularly the first quarter of 2021 will still be significantly impacted by the negative implications of the pandemic. At the same time, Hugo Boss expects its global business to recover noticeably in the further course of the year.

The company currently expects that group sales in 2021 will be significantly above the level of 2020. Also for the operating result (EBIT) and the group’s net income, the Company forecasts a strong increase as compared to the prior year.

The managing and supervisory boards of Hugo Boss intend to propose to the annual shareholders’ meeting to only pay the legal minimum dividend of 0.04 euros per share for fiscal year 2020.

Image: Hugo Boss, Facebook

 

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