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Hugo Boss meets 2018 targets, reveals Q4 sales growth of 7 percent

By Prachi Singh

Jan 22, 2019

Management

On a preliminary basis, Hugo Boss Ag said that group sales grew by 7 percent in the reporting currency and 6 percent in local currencies to 783 million euros (889 million dollars) with both the company’s own retail business and the wholesale business recording positive growth. On non-audited basis, Hugo Boss achieved sales of 2,796 million euros (3,174.5 million dollars) for the full year, which represents an increase of 2 percent in the reporting currency and 4 percent on a currency-adjusted basis driven by growth of the group’s own retail business. The group anticipates that EBITDA before special items in 2018 will roughly remain on prior year level at around 491 million euros.

“We look back on a successful 2018. We increased our pace of growth and achieved our full-year targets, supported by a very good fourth quarter,” said Mark Langer, Chief Executive Officer of Hugo Boss in a statement, adding, “The new year will entirely be focused on the execution of our business plan until 2022. We will personalize our offerings even more and accelerate important business processes.”

Review of fourth quarter performance of Hugo Boss

The company added that adjusted for currency effects, sales in the group's own retail business grew 4 percent both on a comp store basis and in total, despite the prior year's high comparison basis. On a comp store basis, Asia/Pacific was once again the fastest growing region for Hugo Boss. In particular, in China the positive trend continued with the company achieving high single-digit currency-adjusted comp store sales growth also in the fourth quarter. Currency-adjusted comp store sales in the Group's own retail business in Europe and in the Americas grew at a mid-single digit and low single digit rate, respectively.

The group's own online business grew by 37 percent currency-adjusted in the fourth quarter, while sales in the wholesale business increased by 15 percent in local currencies. The company further said that besides double-digit growth in the replenishment business, which allows Hugo Boss to react to short-term demand from wholesale partners, delivery shifts led to sales increases compared to the prior year. Also Great Britain and France, where total sales in the fourth quarter grew at double-digit rates each, benefited from this. Business in Germany remained stable in an overall ongoing challenging market environment. In the United States, Hugo Boss achieved a mid-single digit sales increase in the fourth quarter with comp store sales growth in the group’s own retail business and higher sales with wholesale partners contributing to this development.

For the whole year, the company’s own online business, recorded more than 100 million euros in sales. However, the company added that the positive effects resulting from the increase in sales and a continued strict cost management were offset by investments in product quality, negative currency effects and investments in the digital transformation of the business model.

Picture:Facebook/Boss