Hugo Boss has revised its financial outlook for 2024 amid a tough second quarter, reflective of the current challenging market conditions.
- The company’s updated revenue growth prediction suggests a noticeable decrease from previous estimates.
- Operating profit expectations have similarly been revised downward, highlighting the challenges faced.
- Second-quarter sales figures indicate varied performance across geographic regions and product lines.
- CEO Daniel Grieder remains optimistic about long-term growth in light of strategic investments.
Hugo Boss recently announced a adjustment of its financial forecast for the fiscal year 2024 after encountering a challenging second quarter. The premium fashion brand now projects a modest sales increase of 1% to 4%, amounting to between €4.20bn (£3.52bn) and €4.35bn (£3.65bn). This is a decrease from the previously anticipated 3% to 6% increase to a range of €4.30bn (£3.61bn) to €4.45bn (£3.73bn).
In terms of operating profit (EBIT) for the full year, the fashion house now anticipates a development range of -15% to +5%, which translates to around €350m (£294m) to €430m (£361m). This is down from the earlier forecast of a 5% to 15% rise, which was expected to reach values between €430m (£361m) and €475m (£399m).
The firm has attributed these downward revisions to ongoing macroeconomic and geopolitical challenges that have suppressed global consumer demand and slowed industry growth. Second-quarter sales figures reflected a 1% decrease in group sales compared to the previous year, with revenues reaching €1.0bn (£84m). Regionally, sales declined by 2% in EMEA and 4% in Asia/Pacific, but the Americas experienced a 5% increase.
Wholesale sales through bricks-and-mortar outlets grew by 5%, although retail sales fell by 2%, mirroring reduced store traffic. The company’s operating profit for the second quarter stood at €70m (£58m) on a preliminary basis, marking a substantial 42% year-on-year decline.
In terms of specific product categories, currency-adjusted revenues for Boss menswear decreased by 2%, while sales for Boss womenswear saw a 2% currency-adjusted increase. Meanwhile, Hugo’s currency-adjusted sales rose by 3%, aided by the launch of its new denim-focused line, Hugo Blue.
Despite these challenges, Hugo Boss reported that its second-quarter revenues continued to exceed 2019 levels by more than 50%, indicating strong brand momentum and significant market share gains for both Boss and Hugo over the last three years. CEO Daniel Grieder stated, “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.”
The financial adjustments made by Hugo Boss for 2024 highlight the complexities and uncertainties in the current global market conditions.
