Hugo Boss reports a significant downturn in financial performance amid challenging market conditions.
- The premium fashion brand’s operating profit fell by 42% in Q2 to €70m (£59m).
- Overall group sales decreased by 1% to €1.01bn (£857m) as macroeconomic challenges persist.
- Sales trends varied regionally, with growth in the Americas but declines in EMEA and Asia Pacific.
- CEO Daniel Grieder emphasises ongoing commitment to growth despite market difficulties.
Hugo Boss, a German premium fashion brand, has witnessed a substantial drop in its operating profit by 42% in the second quarter of the year, totalling €70 million (£59 million). This decline comes shortly after the company revised its annual sales and profit forecasts downward due to weakening consumer demand.
Group sales experienced a slight decline of 1% year-on-year, reaching €1.01 billion (£857 million) in the second quarter. The company attributed this decrease to persistent macroeconomic and geopolitical challenges that have adversely affected global consumer demand. Key markets, including China and the UK, were notably impacted by these conditions.
In terms of regional performance, there was a mixed picture. In the Americas, Hugo Boss recorded a 5% year-over-year increase in currency-adjusted sales, driven by its lifestyle positioning. Conversely, the company’s performance in the EMEA region saw a decline of 2% in currency-adjusted sales, reflecting subdued consumer sentiment in the UK and a further deceleration in markets such as Germany and France. The Asia Pacific region fared similarly, with a 4% decrease in currency-adjusted sales, mainly impacted by reduced consumer confidence in China.
These financial results come in the wake of Hugo Boss’s decision to downgrade its financial forecasts for 2024. The company now anticipates a modest increase in sales of between 1% and 4% in group currency, equating to a range of €4.20 billion (£3.52 billion) to €4.35 billion (£3.65 billion). Previously, Hugo Boss forecasted an increase of 3% to 6%, aiming for €4.30 billion (£3.61 billion) to €4.45 billion (£3.73 billion) in sales. Similarly, its EBIT expectations for 2024 have been adjusted to between -15% and +5%, amounting to approximately €350 million (£294 million) to €430 million (£361 million), down from the previous estimate of a 5% to 15% rise.
CEO Daniel Grieder commented on the challenging market environment, stating that the global market environment “deteriorated substantially” in the first half of 2024. He noted that the weakening consumer sentiment across markets has led to a slowdown in growth, which has impacted the industry significantly. Despite these challenges, Grieder highlighted the company’s steadfast commitment to driving above-trend growth, capturing further market share, and enhancing operational and organisational productivity.
Hugo Boss remains focused on strategic growth, despite facing considerable market challenges.
