Group Management
and Strategy
Key performance indicators
In order to increase its enterprise value, HUGO BOSS focuses on maximizing free cash flow over the long term. By consistently generating positive free cash flow, the Group is confident of safeguarding the liquidity of HUGO BOSS at all times while, at the same time, facilitating the long-term growth of the business.
DEFINITION FREE CASH FLOW
Cash flow from operating activities
+ Cash flow from investing activities
= Free Cash flow
Increasing sales and operating profit (EBIT) is key to improving free cash flow over the long term. In addition, a strict management of trade net working capital and a value-oriented capital expenditure approach support the development of free cash flow. HUGO BOSS has therefore identified four key performance indicators for increasing free cash flow. These comprise sales, EBIT, trade net working capital, and capital expenditure. The 2025 guidance for these key performance indicators is presented here. Details on the financial development of HUGO BOSS in fiscal year 2024 can be found here.
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Operating Profit (EBIT)
DEFINITION EBIT
Earnings before taxes
– Financial result
= Operating profit (EBIT) -
Trade net working capital
DEFINITION TRADE NET WORKING CAPITAL
Inventories
+ Trade receivables
– Trade payables
= Trade net working capital
Management of inventories and trade receivables is the main responsibility of our subsidiaries and the respective operating central departments. The latter are also responsible for managing trade payables. These three balance sheet items are primarily managed by reference to the days of inventories outstanding, days of sales outstanding, and days of payables outstanding. Besides this, there is a specific approval process for the purchase of inventories for our global retail business aimed at constantly optimizing inventory levels. This process takes into account sales quotas, expected sales growth, and anticipated markdown levels.
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Capital expenditure
Investment activity is primarily focused on our own retail network, the digitalization of our business model, as well as the expansion of our global logistic capacities. As part of our strategic claim “Drive Omnichannel,“ we are further optimizing and modernizing our global store network. In line with our claim “Lead in Digital,” digital investments are pushed along the entire value chain – from digital product creation to digital showrooms, the continuous enhancement of our own online business, as well as our Digital TWIN initiative and general IT infrastructure. As part of our claim “Organize for Growth,” we are strategically expanding one of our key logistic hubs near our headquarters in Metzingen (Germany) with a planned go-live in 2026. A specific approval process exists for material investment projects. Apart from qualitative analyses, e.g., with respect to potential store locations, this also includes an analysis of each project’s net present value.
Group Strategy
Our “CLAIM 5” growth strategy, introduced in August 2021, aims to sustainably increase brand relevance, drive superior top-line growth, and thus increase market shares of BOSS and HUGO by 2025. Central to this strategy is our vision of being the leading premium tech-driven fashion platform worldwide, reflecting our commitment to digitalization, innovation, and customer-centricity. By putting consumers at the heart of everything we do, we aim to turn them into true fans of BOSS and HUGO, fostering their loyalty in the long term. “CLAIM 5” is built on five strategic pillars: “Boost Brands,” “Product is Key,” “Lead in Digital,” “Drive Omnichannel,” and “Organize for Growth.” It also includes a strong commitment to sustainability, a rigorous executional road map, and a firm commitment on empowering people and teams.
