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Hugo Boss’s second-quarter sales declined 1 per cent to €1.02 billion, according to the company’s preliminary results — the group’s weakest quarterly sales growth since CEO Daniel Grieder joined in June 2021, according to Citi analyst Thomas Chauvet. The weak performance caused the company to cut its outlook for the first time since Grieder’s appointment, per Citi.
EBIT dropped to €70 million in Q2 of 2024, down from €121 million in the same period last year. Hugo Boss said macroeconomic and geopolitical challenges weakened consumer demand (in March the company warned its €5 billion sales target for 2025 might be delayed due to weak demand, too). Shares were down 9 per cent on Tuesday morning following the release of the preliminary results on Monday night. The company joins Burberry in showing signs of soft demand, albeit to a lesser extent.
Hugo Boss now expects sales to increase by 1 to 4 per cent, reaching between €4.2 and €4.35 billion (previously the group predicted sales to increase 3 to 6 per cent, from €4.3 to €4.45 billion). It also expects EBIT to develop in the range of -15 per cent to +5 per cent (€350 million to €430 million), compared to previous expectations of 5 to 15 per cent EBIT growth to between €430 million and €475 million. Hugo Boss will publish its full Q2 results on 1 August.
“Following three years of nearly flawless execution and delivery on (ever-increasing) market expectations, Boss is facing a more subdued demand environment for premium casualwear, potentially disrupting 2H24E (second half of 2024 expectations) and delaying further the achievement of 2025 sales and margin targets,” Chauvet said in a note.
Weaker demand was felt across all brands: Boss menswear revenues declined 2 per cent while Boss womenswear was up 2 per cent, and Hugo sales were up 3 per cent thanks to the launch of denim line Hugo Blue.
The Americas posted 5 per cent year-on-year growth in Q2, while EMEA declined 2 per cent and Asia Pacific was down 4 per cent. Bricks-and-mortar wholesale grew 5 per cent, however bricks-and-mortar retail was down 2 per cent due to lower store traffic. Digital sales declined 4 per cent.
“We are operating in a period of significant global macro uncertainty, which also affected our performance in the second quarter,” Grieder said in a statement. “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. By translating this sales performance and focusing even more on operating effectiveness, we have the ability to return to profitable growth in the second half.”
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