HUGO BOSS increases pace of growth in own retail
· Currency-adjusted sales up 3% in the third quarter
· Retail comp store sales up 5%
· EBITDA before special items broadly stable
· Sales increase at a low single-digit percentage rate expected in 2017
· Stable operating profit before special items forecasted
“We are well on track to achieving our goals for 2017 or even exceeding some of them,” says Mark Langer, Chief Executive Officer of HUGO BOSS AG. “In particular, the performance of our own retail business is highly satisfying. We are making good progress in repositioning BOSS and HUGO. In a few weeks’ time, our customers will be able to buy first parts of our Spring/Summer 2018 collection in stores. Accordingly, we have laid the foundations for future profitable growth.”
HUGO BOSS can look back on a good third quarter with solid sales growth. This particularly applies to its own retail business, where the momentum of comp store sales growth accelerated. This performance was again underpinned by Great Britain, China and, for the first time in two years, by the own retail business in the United States. The Group’s own online business also grew in the quarter under review. On the other hand, sales in the wholesale channel declined slightly as expected. Operating profit fell slightly short of the prior year’s figure due to intensive marketing activities for the BOSS and HUGO brands, spending on the digital transformation of the business model as well as negative currency effects.
The favorable business performance in the year to date has prompted HUGO BOSS to raise its full-year sales guidance. It now expects Group sales to increase by a low single-digit percentage rate on a currency-adjusted basis in 2017. Europe and Asia/Pacific will particularly contribute to this growth. HUGO BOSS now assumes that sales in its own retail business will increase by a mid single-digit rate, while the unchanged forecast for wholesale sales is a decline in the low to mid single-digit percentage rates. License business is expected to grow at a double-digit rate. In addition, the Group specifies its earnings forecast for the full year and now expects EBITDA before special items to remain broadly stable.
The progress being made in implementing the strategic realignment is visible in many areas. Thus, the reopening of the first BOSS stores with the new store concept in Geneva and Birmingham marks an important milestone. The modern and inviting design together with the integration of digital services is enhancing the shopping experience substantially. HUGO BOSS is also stepping up digitalization in its wholesale business. In October, selected wholesale partners had the opportunity to order the HUGO Fall/Winter 2018 collection for the first time via a digital showroom specially developed by HUGO BOSS.
From the end of the year, first parts of the Spring/Summer 2018 collection, which reflects the focus on BOSS and HUGO for the first time, will be available in retail stores. The repositioning of the two brands has been accompanied by numerous online and offline events and campaigns over the past few months. Thus, Formula 1 world champion Lewis Hamilton and Hollywood actor James Marsden presented their personal favorites from the BOSS Menswear collection in the global “Own Your Journey” social media campaign. Consumer response to the advertised styles has been extremely positive. In July, BOSS Womenswear unveiled its “Gallery Collection” in an extraordinary presentation at the Berlin Fashion Week. Looking forward, capsule collections of both brands will be used to generate heightened attention. Finally, HUGO presented itself to a young and fashion-conscious audience at “Bread & Butter by Zalando” in Berlin at the beginning of September. All styles were available online immediately after the show under the “see now, buy now” motto.