Hugo's head of Germany expects stable sales in 2025 in the midst of volatile markets

The fashion and lifestyle company of Germany, Hugo Boss, has anticipated that sales in 2025 remain widely in line with the previous year, varying between € 4.2 billion and € 4.4 billion (~ $ 4.58 billion and $ 4.80 billion), which reflects a possible 2 % decrease or a growth of up to 2 percent.

Macroeconomic and geopolitical volatility will remain high in 2025, with commercial performance affected by the feeling of moderate consumer. A balanced approach between strategic investments and profitability efficiency is expected to boost profitability growth. Sales in Europe, the Middle East and Africa (EMEA) are expected to remain stable, while the Americas will grow in the percentage range of a single low digit. It is anticipated that the Asia/Pacific region will see a moderate decrease, which reflects the uncertainties surrounding the recovery of China's industry.

Hugo Boss expects sales to range between € 4.2 billion and € 4.4 billion (~ $ 4.58 billion and $ 4.80 billion) in 2025. Despite macroeconomic volatility, profitability must improve. In 2024, sales grew 3 percent to a record of 4,307 billion euros (~ $ 4.69 billion), with a strong impulse of the fourth quarter. Ebit fell 12 percent to € 361 million (~ $ 393.49 million), while net income fell 17 percent year -on -year.

It is expected that the profitability of the group will improve, with the EBIT forecast to increase between € 380 million and € 440 million, corresponding to a margin of Ebit of 9.0 percent to 10.0 percent, more than 8.4 percent in 2024. Commercial working capital (TNWC), since a percentage of sales is expected to remain between 19 and 20 percent, backed by the continuous inventory of management. Capital expenditure (CAPEX) is expected to obscure between 200 million euros and € 250 million, reflecting an approach to CAPEX efficiency and the normalization of logistics investments.

“Since the launch of 'claim 5' in 2021, we have achieved significant progress on our strategic trip and has provided a growth higher than the trend. In 2024, we continue our growth trajectory, reaching record sales of € 4.3 billion, backed by a strong performance in the last quarter. This success underlines the greatest relevance of Boss and Hugo and highlights the great potential of our two brands,” He said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said,” he said, “he said.” Daniel Grieder, Executive Director (CEO) of Hugo Boss. “When entering the last year of 'claim 5', our approach in offering profitability improvements is more clear than ever. The solid base we have built in recent years fills us with confidence in our ability to succeed.”

Financial performance in fiscal year 2024

Hugo Boss reported a strong growth of the upper line in fiscal year 2024 (FY24), achieving record revenues of € 4,307 billion (~ $ 4.69 billion), an increase of 3 percent in the terms informed and adjusted by currency. The growth was particularly robust in the fourth quarter (Q4), with sales that increase 6 % year after year to € 1,249 billion (~ $ 1.36 billion), supported by a solid holiday season.

The sales impulse was promoted by brand and products initiatives, with men's clothing for men and women's clothing that grows 3 percent, while Hugo's sales increased 5 percent, reinforced by the successful launch of Hugo Blue.

As for the region, growth varied in key markets. In EMEA, income increased by 3 percent, driven by strong sales in Germany and two -digit profits in emerging markets, with sales of the fourth quarter of 6 percent. The Americas saw a 8 percent sales increase, backed by a high growth of a single digit in the US. And an increase of 13 percent in the fourth quarter. In contrast, Asia/Pacific sales decreased by 2 percent, affected by the weak demand of consumers in China, although Southeast Asia and the Pacific recorded a high growth of a single digit.

Retail and mortar income revenue remained plans during the year, since the highest transaction sales were compensated by the lowest traffic of the store amid the feeling of moderate consumer. However, the fourth quarter saw a 2 percent increase, indicating a return to growth. The wholesale business worked hard, with an increase in sales of 8 percent throughout the year and a 15 percent jump in the fourth quarter, reflecting a strong demand for boss and Hugo among retail partners. The expansion of the company's global franchise also contributed to its performance.

The company's digital business continued its ascending trajectory, registering an increase in income of 6 percent in 2024, with the 11 percent increase in sales of the quarter quarter. This growth was driven by improvements in the official channel and an increase in digital sales through partner platforms.

The company improved its gross margin to 61.8 percent in 2024, 30 basic points, driven by the efficiency of obtaining and reduced use of aerial light. Cost savings measures maintained a 6 percent operational expenses growth, with a slower increase in the second half (H2). Sales expenses increased by 7 percent, mainly due to brick and mortar costs. Ebit decreased 12 percent to € 361 million (~ $ 393.49 million), affected by € 47 million in deterioration charges, reduced Ebit's margin to 8.4 percent. Ebitda grew 3 percent to € 775 million, while net revenues fell 17 percent to € 224 million, with EPS to € 3.09.

“We have not only taken advantage of our growth opportunities, but we have also placed the same emphasis on improving the efficiency of profitability in all commercial areas, including operations, marketing, sales and administration. And I am very happy to have achieved substantial progress in the second half of the year,” said Grieder. “We managed to unlock significant productivity profits, which effectively limited the growth of expenses and supported our background development. At the same time, we generated a strong free cash flow in 2024, highlighting the strength of our business model.”

Fiber2Fashion News Desk (SG)

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