Quarterly Statement for Q2 2021
Metzingen, August 4, 2021
HUGO BOSS strongly accelerates its business recovery – significant top- and bottom-line improvements in the second quarter
- Currency-adjusted Group sales increase 133% as compared to Q2 2020
- Sales remain only 4% below Q2 2019 levels, with all regions, channels, and brands contributing
- EBIT amounts to EUR 42 million in the second quarter
- Strong free cash flow generation of EUR 134 million
- FY 2021 outlook: Currency-adjusted Group sales to grow between 30% and 35%; EBIT expected between EUR 125 million and EUR 175 million
“Our strong performance in the second quarter impressively demonstrates the great potential of our two brands BOSS and HUGO,” says Daniel Grieder, Chief Executive Officer of HUGO BOSS AG. “We are well prepared to further drive our business recovery also in the second half of the year. Looking ahead, I am convinced that our strong brands, diversified business model, and highly motived teams will enable HUGO BOSS to unlock its full potential in the years to come.”
In the second quarter of 2021, HUGO BOSS successfully accelerated its business recovery, recording strong top- and bottom-line improvements during the three-month period. The gradual easing of pandemic-related restrictions, including the termination of temporary lockdowns over the course of the quarter, as well as further progress made along vaccination campaigns, fueled consumer sentiment across the globe. On average, only around 20% of the Company’s global store network was temporarily closed during the second quarter.
Consequently, currency-adjusted Group sales increased 133% as compared to the prior-year period. Also in Group currency, sales more than doubled, up 129% to EUR 629 million (Q2 2020: EUR 275 million). Compared to the second quarter of 2019, the decline in currency-adjusted Group sales was limited to 4%, with all regions, channels, and brands contributing to this development.
Strong business recovery across all regions
Business recovery was clearly noticeable across all regions. While sales more than doubled in Europe (+130% currency-adjusted to EUR 385 million) and more than quintupled in the Americas (+416% currency-adjusted to EUR 123 million), currency-adjusted revenues in Asia/Pacific were up by 51% as compared to the prior-year period, totaling EUR 104 million.
Consequently, on a two-year-stack basis, currency-adjusted sales in Europe remained only 4% below 2019 levels, as the lifting of lockdowns and accompanying temporary store closures over the course of the quarter supported the business recovery in key markets. Sales in the UK exceeded 2019 levels, with currency-adjusted revenues up 7% on a two-year stack. In the Americas, sales remained 5% below 2019 levels, with the important U.S. market benefitting from a further uptick in local demand, thereby limiting the market’s sales decline to 6%, currency-adjusted. In Asia/Pacific, currency-adjusted sales were down 3% against the second quarter of 2019, with currency-adjusted sales in mainland China up 28% against the prior-year period and 33% on a two-year-stack basis.
Own online sales grow triple-digit on a two-year stack
From a channel perspective, HUGO BOSS more than doubled sales in own retail (+124% currency-adjusted to EUR 422 million) as against the prior-year quarter. Consequently, own retail sales remained only 5% below 2019 levels in the three-month period, with the vast majority of own retail stores back in operations towards the end of the quarter. The Company’s own online business continued its strong double-digit growth trajectory also in the second quarter. Sales in this channel recorded currency-adjusted growth of 27% against a particularly strong comparison base, implying triple-digit growth on a two-year stack (+122%). Sales in wholesale also more than doubled (+170% currency-adjusted to EUR 189 million) and came in 2% below 2019 levels. This mainly reflects partners’ strong demand for the Fall/Winter 2021 collections as well as additional business with selected on- and offline retailers in Europe.
Momentum in casualwear strongly accelerates
Sales for both brands, BOSS and HUGO, more than doubled compared to the second quarter of 2020, with currency-adjusted revenues up 139% and 102%, respectively. On a two-year-stack basis, sales for BOSS declined 5%, while HUGO returned to growth with sales up 2%, both currency-adjusted. Momentum for both brands’ casualwear offerings further accelerated in the three-month period, with currency-adjusted revenues being up double-digit on a two-year-stack basis. Formalwear sales also recorded a sequential improvement in the second quarter, benefitting from pent-up demand for occasionwear and businesswear.
Significant bottom-line improvements in the second quarter
In the second quarter of 2021, HUGO BOSS generated an operating profit (EBIT) of EUR 42 million (Q2 2020: minus EUR 250 million), reflecting the strong Group sales development as well as ongoing tight overhead cost control in the three-month period. The earnings development was also supported by the non-recurrence of impairment charges as well as negative inventory valuation effects recorded in the prior-year quarter. The latter particularly supported the Group’s gross margin develop-ment, up 670 basis points to 61.2%, and more than compensated for an overall intensified markdown level and higher sourcing costs.
Strong free cash flow generation of EUR 134 million
Free cash flow totaled EUR 134 million in the three-month period, a significant improvement compared to the prior-year period (Q2 2020: EUR 39 million) and in line with the level recorded in 2019. Besides the increase in EBIT, improvements in trade net working capital fueled the strong free cash flow generation, thereby once again emphasizing the strong internal financing capability of HUGO BOSS. The additional loan commitments – totaling EUR 275 million – that the Company secured in fiscal year 2020 to ensure high levels of financial flexibility during the pandemic expired at the agreed maturity date in June, without having been drawn at any point in time.
Business recovery expected to continue in the second half of 2021
Despite persisting uncertainties regarding the further development of the pandemic, HUGO BOSS is confident that the Company’s overall business recovery will continue in the second half of 2021. HUGO BOSS anticipates currency-adjusted Group sales in fiscal year 2021 to increase by between 30% and 35% (2020: EUR 1,946 million), with a contribution expected from all regions. EBIT is forecast to amount to between EUR 125 million and EUR 175 million in fiscal year 2021 (2020: minus EUR 236 million).
HUGO BOSS to present its 2025 strategy as part of today’s Investor Day
Today, the HUGO BOSS Managing Board will outline the Company's future strategic priorities and objectives at the Investor Day 2021, which will be held virtually. A press release on the 2025 strategy of HUGO BOSS will be distributed at 10:00 a.m. CEST, followed by the Managing Board’s presentations starting at 11:00 a.m. CEST.
Financial calendar and contacts
November 4, 2021
Third Quarter Results 2021
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Phone: +49 7123 94-87563
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Phone: +49 7123 94-86321