German fashion house Hugo Boss has announced a 3% year-on-year growth in its revenue for the first half of fiscal year 2024 (H1 FY24). The company's wholesale sales in physical stores saw a 7% growth, while revenue from physical retail stores remained stable. Online sales increased by 3% in the first half of fiscal year 2024.
Hugo Boss reported year-on-year revenue growth of 3 percent in the first half of fiscal year 24. Sales in the second quarter of fiscal year 24 decreased by 1 percent to 1.015 billion euros (about 1.09 billion dollars). Gross profit remained stable at 638 million euros, while operating expenses increased by 9 percent. EBIT decreased by 42 percent to 70 million euros, and net profit decreased by 50 percent. Sales of Boss menswear fell by 2 percent.
The company recorded a 1 percent decline in group sales during the second quarter of fiscal year 2024 (Q2 FY24). The company's total sales amounted to €1,015 million (approximately $1,090 million) in the second quarter of fiscal year 2024, compared to €1,026 million in the same period of the previous year, Hugo Boss said in a press release.
Gross profit remained relatively stable at €638 million. Operating expenses increased by 9% to €567 million, compared with €519 million previously, driven by higher sales and marketing expenses, which increased by 10% to €450 million, and higher administrative expenses, which increased by 8% to €117 million. As a result, operating profit (EBIT) experienced a significant decline of 42%, from €121 million to €70 million.
The financial result was a loss of €12 million, 28% better than the loss of €16 million in the second quarter of 2023. Pre-tax profit decreased by 50% to €54 million, compared to €109 million. As a result, net profit decreased by 50% to €39 million, compared to €78 million in the same period of the previous year, the company said in a press release.
Basic and diluted earnings per share also decreased by 51%, from €1.09 to €0.54. The tax rate remained constant at 28%.
In terms of brand performance, Boss Menswear saw a 2% drop in sales, reaching €794 million from €810 million. Boss Womenswear, however, saw a modest 1% increase, with sales amounting to €68 million, up from €67 million. Hugo brand sales rose 3%, totalling €152 million, compared to €148 million in Q2 FY23.
Segment sales decreased by 3% in the Europe, Middle East and Africa (EMEA) region, with sales falling from €620 million to €604 million. The Americas segment recorded an increase of 6%, from €236 million to €250 million. In the Asia-Pacific region, sales fell by 7% to €136 million, compared to €146 million previously. License sales increased by 3% to €26 million.
Looking at sales by distribution channel, physical retail sales fell 3% to €563 million from €580 million. Physical wholesale sales rose 5% to €236 million from €224 million previously. Digital sales decreased 4% to €189 million from €196 million, while licensing sales remained stable at €26 million.
“Weakening consumer confidence in most markets led to a rapid slowdown in growth across the industry, from which we were unable to fully escape. And while the macroeconomic environment is likely to remain challenging for the time being, we remain steadfast in our commitment to continue driving above-trend growth, capturing more market share and focusing even more on operational and organizational productivity,” he said. Daniel Grieder, CEO of Hugo Boss.
Fibre2Fashion (DP) Press Desk
