Germany-based luxury fashion group Hugo Boss has reported a 1 per cent decrease in currency-adjusted preliminary group sales in the second quarter of fiscal 2024 (Q2 FY24), compared to the previous year’s level. Similarly, sales in group currency also saw a decline of 1 per cent, amounting to €1.015 billion (approximately $1.1 billion), compared to €1.026 billion in Q2 FY23.
Hugo Boss reported a 1 per cent decrease in currency-adjusted Q2 FY24 sales, amounting to €1.015 billion (~$1.1 billion).
Sales increased by 5 per cent in the Americas but declined in EMEA and Asia-Pacific.
Brick-and-mortar wholesale sales grew by 5 per cent, while digital business fell by 4 per cent.
Operating profit dropped to €70 million.
The company’s performance varied significantly across different regions. In the Americas, Hugo Boss continued its growth trajectory with a 5 per cent increase in sales. However, this was offset by moderate revenue declines in Europe, Middle East, and Africa (EMEA) and Asia-Pacific, which fell by 2 per cent and 4 per cent respectively in the second quarter, the company said in a press release.
From a channel perspective, the company maintained its momentum in brick-and-mortar wholesale, experiencing a 5 per cent increase in sales. In contrast, revenues for the group’s digital business declined by 4 per cent compared to the previous year. Brick-and-mortar retail also saw a slight decrease in revenues, down 2 per cent, which reflected lower store traffic.
The overall softer consumer sentiment impacted performances across the company’s brands. Currency-adjusted revenues for Boss menswear were 2 per cent below the prior-year level. In contrast, Boss womenswear saw a 2 per cent increase in sales on a currency-adjusted basis. The Hugo brand performed well, with currency-adjusted sales up by 3 per cent, supported by the successful launch of its new denim-focused brand line, Hugo Blue.
Operating profit (EBIT) for the second quarter amounted to €70 million on a preliminary basis, a significant decrease from €121 million in Q2 FY23. Despite this, the company achieved a robust improvement in gross margin, which increased by 50 basis points to 62.9 per cent from 62.3 per cent in the same period last year.
Additionally, Hugo Boss reported a positive development in inventory management, with inventory levels down 7 per cent year-over-year on a currency-adjusted basis.
“We are operating in a period of significant global macro uncertainty, which also affected our performance in the second quarter,” said Daniel Grieder, chief executive officer of Hugo Boss. “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.”
Fibre2Fashion News Desk (DP)