Quarterly Statement for Q1 2022
Metzingen, May 4, 2022
- Currency-adjusted Group sales grow 52% to EUR 772 million; 17% above 2019 levels
- Ongoing robust momentum in Europe (+21% vs. Q1 2019) and the Americas (+17%)
- Significant marketing investments drive brand momentum across all touchpoints
- EBIT amounts to EUR 40 million in Q1, well above the prior-year level
- Top- and bottom-line outlook for full year 2022 confirmed
“We have made a kickstart to fiscal year 2022, with record first quarter sales,” says Daniel Grieder, Chief Executive Officer of HUGO BOSS. “Supported by our bold branding refresh, momentum for BOSS and HUGO has accelerated around the globe. Together with the ongoing rigorous execution of our ‘CLAIM 5’ strategy, this provides us with strong tailwinds to achieve record sales in fiscal year 2022.”
In the first three months of 2022, HUGO BOSS continued its strong financial and operational performance, posting significant top- and bottom-line improvements year-on-year. Group sales increased 52% currency-adjusted to EUR 772 million (Q1 2021: EUR 497 million), marking the strongest first quarter in the history of HUGO BOSS from a top-line perspective. In Group currency, revenues increased 55%. The strong sales development primarily reflects ongoing robust momentum in the Company’s largest regions – Europe and the Americas. In addition, the successful execution of important strategic initiatives as part of the “CLAIM 5” strategy provided further tailwind. Consequently, revenues in the first quarter of 2022 strongly exceeded pre-pandemic levels, up 17% currency-adjusted as compared to the first three months of 2019, representing a further acceleration as compared to the final quarter of 2021.
Successful branding refresh drives brand momentum globally
In the first quarter, HUGO BOSS successfully implemented its comprehensive branding refresh – from new product, to record-breaking marketing campaigns, up to the relaunch of its digital flagship hugoboss.com – significantly driving relevance and perception of its brands. In particular, the two star-studded global campaigns for BOSS and HUGO, perfectly embodying the brands’ younger and more confident image, drove brand momentum and attracted new and younger customers worldwide. Sell-through rates for the brands’ Spring/Summer 2022 collections – the first ones to fully embody the branding refresh – clearly exceed those of previous collections. Fueled by this success, HUGO BOSS recorded significant double-digit growth in currency-adjusted sales for BOSS Menswear (+53%), BOSS Womenswear (+41%), and HUGO (+52%). On a three-year-stack basis, currency-adjusted sales for BOSS Menswear exceeded pre-pandemic levels by 17%, while sales for BOSS Womenswear remained on par. At HUGO, currency-adjusted sales grew a strong 26% as compared to 2019.
Strong momentum in Europe and the Americas continues
Momentum was particularly strong in Europe and the Americas. Compared to the prior-year period, currency-adjusted sales in Europe increased 69%, translating into strong growth of 21% on a three-year-stack basis. This development represents a further acceleration as compared to the final quarter of 2021, driven by robust local demand across key European markets, particular in Great Britain and France. Also in Eastern Europe, momentum remained strong despite the war in Ukraine and the corresponding suspension of business activities in Russia, implemented as of March 9. Regardless of this, HUGO BOSS remains deeply concerned by the humanitarian crisis in the region, contributing financial aid to organizations aimed at supporting those affected by the war. The Company will continue to closely follow the dramatic developments in Ukraine and the region and take further decisions and actions as needed.
In the Americas, currency-adjusted revenues were up 56% compared to the prior year. Consequently, sales grew 17% as compared to 2019 levels, with all of the region’s markets recording sales increases versus pre-pandemic levels. While the Group’s business in Asia/Pacific also recorded a promising start to the year, renewed COVID‑19-related restrictions – including temporary store closures and reduced opening hours – weighed on consumer sentiment and store traffic in mainland China towards the end of the quarter. As a result, currency-adjusted sales in mainland China remained 13% below the prior-year period but were up 12% versus 2019 levels. Overall, revenues in the Asia/Pacific region came in 3% above the prior-year level and only 1% below that of 2019.
Broad-based growth across all channels
From a channel perspective, the Group’s digital business – including the digital flagship hugoboss.com as well as digital revenues generated with partners – successfully continued its double-digit growth trajectory. Despite being up against a particularly strong comparison base from the prior-year period, currency-adjusted sales increased 22% in the first quarter of 2022, with double-digit improvements across all digital touchpoints. This development was supported by the successful relaunch of hugoboss.com implemented in January. Compared to 2019, total digital sales more than doubled, up 145% currency-adjusted. The Group’s brick-and-mortar retail business also recorded double-digit sales improvements, with revenues up a strong 76%, partly reflecting long-lasting temporary store closures in the prior-year period. Consequently, revenues were 5% above 2019 levels. At the same time, sales in brick-and-mortar wholesale grew 44%, marking the channel’s return to pre-pandemic levels with an increase of 2% as compared to 2019, both currency-adjusted. This mainly reflects the strong demand of wholesale partners for the Spring/Summer 2022 collections fully incorporating the branding refresh.
EBIT increases strongly to EUR 40 million despite significant brand investments
In the first quarter of 2022, HUGO BOSS generated an operating profit (EBIT) of EUR 40 million, well above the prior-year level (Q1 2021: EUR 1 million) and despite significant investments into the business. In particular, marketing investments effectively doubled, first and foremost reflecting the comprehensive BOSS and HUGO campaigns as part of the branding refresh, aimed at driving brand relevance globally. The increase in EBIT is mainly attributable to the strong sales growth as well as an improvement in gross margin, as a higher share of full-price sales more than compensated for the persistently high level of global freight and transportation costs.
HUGO BOSS confirms outlook for full year 2022
Following its successful start to 2022, HUGO BOSS confirms its top- and bottom-line outlook for the current fiscal year. Accordingly, the Group continues to expect sales in 2022 to increase between +10% and +15% to a new record level of between EUR 3.1 billion and EUR 3.2 billion. This outlook is underpinned by the persisting strong brand momentum generated by BOSS and HUGO in the wake of the successful branding refresh. Additionally, HUGO BOSS expects ongoing robust momentum in Europe and the Americas, supported by a particularly strong order intake for Fall/Winter 2022, which is forecast to drive wholesale sales in the second half of the year. Driven by the anticipated robust top-line improvements, HUGO BOSS remains confident of generating significant bottom-line growth in 2022. The Company thus continues to forecast EBIT to increase within a range of +10% to +25% to an amount of between EUR 250 million and EUR 285 million, despite ongoing investments into product, brand, and digital as part of “CLAIM 5”, and against the backdrop of the current geopolitical and macroeconomic uncertainties.
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