Hugo Boss has revised its financial outlook for fiscal 2024 due to a challenging second quarter, impacting its previous projections.
- The company now anticipates a modest sales increase of 1% to 4%, down from an earlier projection of 3% to 6%.
- Earnings Before Interest and Taxes (EBIT) are expected to change between -15% and +5%, significantly below previous expectations.
- Second quarter global sales dipped by 1%, with notable declines in EMEA and Asia/Pacific, despite growth in the Americas.
- Retail sales fell by 2% amidst lower store traffic, though wholesale sales saw a modest rise of 5%.
Hugo Boss has revised its financial predictions for 2024, citing difficulties in the second quarter that have necessitated a downward adjustment of their outlook. The fashion brand now predicts sales growth of just 1% to 4% in group currency, equating to between €4.20 billion (£3.52 billion) and €4.35 billion (£3.65 billion), a decrease from the previous forecast of 3% to 6% growth. Similarly, EBIT for the full year 2024 is now expected to range from -15% to +5%, with expected earnings between €350 million (£294 million) and €430 million (£361 million), sharply down from an earlier anticipated increase of 5% to 15%.
The adjustments reflect ongoing macroeconomic and geopolitical challenges that have softened global consumer demand, resulting in an industry-wide slowdown. Sales for the second quarter were down 1% compared to the previous year, settling at €1.0 billion (£84 million) in group currency. The EMEA region experienced a 2% drop and Asia/Pacific a 4% decline in sales, whereas the Americas bucked the trend with a 5% rise. Retail figures were slightly weaker, with a 2% decline in store sales attributed to reduced footfall, while wholesale sales increased by 5%.
Currency-adjusted sales figures reveal that revenue from Hugo Boss’ menswear decreased by 2% compared to the previous year, whereas there was a 2% increase in womenswear sales. Hugo, one of the brand’s key lines, saw a 3% increase in currency-adjusted sales, bolstered by the launch of Hugo Blue, a denim-focused brand extension. These developments underscore the brand’s capacity to capture significant market share, as their revenues continued to surpass 2019 levels by over 50% in the second quarter.
Daniel Grieder, CEO of Hugo Boss, commented on the current economic uncertainties: “We are operating in a period of significant global macro uncertainty, which also affected our performance in the second quarter. Although the timing of any macro recovery remains uncertain, our strategy of consistently investing in our strong brands, Boss and Hugo, gives us confidence in our ability to continue driving above-trend growth and capturing further market share.” Grieder remains optimistic about the company’s potential to rebound, noting the importance of focusing on operational efficiency to return to profitable growth in the latter half of the year.
Looking ahead, Hugo Boss remains committed to leveraging brand strength and operational improvements to weather economic uncertainties.
