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Hugo Boss witnesses sixth consecutive year of growth

By Prachi Singh

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Hugo Boss has managed to increase sales and operating profit to new record levels in the past twelve months marking sixth consecutive year of growth. In the fourth quarter, the company said that strong performance in Europe drove solid top line growth, continued challenges in China and the US, however, dampened sales and profit development. The Group’s operating profit (EBITDA before special items) grew 2 percent in the fourth quarter on a preliminary, non-audited basis, so full-year profit growth amounted to 1percent.

“We continue to experience strong momentum in Europe despite rising political uncertainties in the region”, commented Claus-Dietrich Lahrs, CEO of Hugo Boss, adding, “In the year ahead, we will focus all our resources to drive the initiatives we have defined as key for medium- and long-term profitable growth, above all the implementation of an omnichannel business model. In addition, we will take decisive action to improve our business in China and the US despite the difficult industry conditions we are facing in these markets.”

Q4 sales driven by positive performance in Europe

Group sales increased by 10 percent to 750 million euros (817.2 million dollars) on a preliminary basis in the fourth quarter. In currency-adjusted terms, growth amounted to 5 percent. In Europe, revenues rose by 10 percent, driven by solid productivity improvements in own retail as well as growth in wholesale.

Sales were up in almost all markets with particular strength in the UK and Southern Europe. By contrast, revenues in the Americas declined by 1 percent in local currencies. The company said that trends in the US market remained virtually unchanged compared to the third quarter as sales declined at a low-double-digit rate. In Asia, most markets recorded further sales growth. As a result of a double-digit decline in China, however, sales in the region as a whole were down 7 percent on the prior year in local currencies. Fourth quarter currency-adjusted sales in the Group's own retail business including outlets and online stores rose by 6 percent. However, currency-adjusted retail comp sales in this channel declined by 1 percent. Sales in the wholesale business were 2 percent above the prior-year level on a currency-adjusted basis.

Group operating profit (EBITDA before special items) was up 2 percent, the slight retail comp sales decline, however, had a negative impact.

Full year sales rise 9 percent

In the full year of 2015, Group sales increased 9 percent to 2,809 million euros (3,060 million dollars). They were up 3percent in local currencies. Revenues in Europe grew 6 percent but sales in the Americas and Asia declined slightly by 1percent and 3 percent, respectively, in currency-adjusted terms. The own retail distribution channel saw growth of 7 percent, with online generating a strong double-digit increase. Wholesale sales decreased by 3 percent excluding currency effects. Growth rates of womenswear exceeded the Group average, driven by double-digit gains in the BOSS core brand.

On a preliminary basis, EBITDA before special items rose 1percent, slightly below the Group’s forecast of an improvement between 3percent and 5 percent which had been based on the assumption of at least stable retail comp sales development in the fourth quarter. Profit before taxes was 4 percent below the prior year level.

Hugo Boss