Germany-based fashion brand Hugo Boss has experienced a significant increase in sales during the second quarter of fiscal year 2022. Compared to the same period last year, sales have risen by 34%, reaching €878 million ($1.03 billion), marking the strongest second quarter in the company’s history. Additionally, sales have surpassed pre-pandemic levels, rising by 29% compared to the second quarter of 2019, indicating a continued recovery for the brand.
This exceptional growth can be attributed to the successful implementation of Hugo Boss’ ‘CLAIM 5′ growth strategy, which was introduced a year ago. The strategy aims to enhance the brand’s relevance and appeal among consumers, particularly millennials and Generation Z. Through marketing initiatives such as global brand campaigns for Boss and Hugo, as well as collaborations with popular figures like Khaby and Mr. Bathing Ape, the brand has generated excitement and buzz on social media.
Both Boss and Hugo have witnessed significant double-digit improvements in their sales. Boss Menswear recorded a 35% increase in revenues compared to the previous year and a 29% growth compared to 2019. Boss Womenswear also experienced growth, with a 23% increase in sales compared to the previous year and a 6% growth compared to 2019. Hugo’s sales were up by 37%, resulting in a 39% growth over a three-year period.
In terms of regions, Europe and the Americas have shown particularly strong growth, with sales increasing by 41% and 45% respectively compared to the previous year. Key markets in Europe, including Great Britain, France, and Germany, have contributed to the double-digit improvements. In the Americas, the US market has played a significant role in cultivating Hugo Boss’ 24/7 brand image. However, the Asia/Pacific region showcased mixed results, with sales in Southeast Asia & Pacific compensating for a decline in mainland China due to COVID-19-related store closures.
The brand’s strong performance has been evident across all distribution channels. The digital business has seen double-digit growth, with total digital revenues more than doubling compared to pre-pandemic levels. Brick-and-mortar retail has also experienced robust double-digit sales improvements, while brick-and-mortar wholesale has witnessed a 51% increase in revenues.
As a result of the strong top-line performance in Q2, the operating profit (EBIT) has doubled to €100 million ($117 million) compared to the same period last year. This improvement can be attributed to an increase in gross margin, driven by a higher share of full-price sales and operating expense leverage. Despite non-cash impairment charges related to its store network in Russia, Hugo Boss has seen a significant improvement in EBIT compared to pre-pandemic levels.
Based on its impressive performance, Hugo Boss has raised its sales forecast for fiscal year 2022. The brand now anticipates sales to increase between 20% and 25%, reaching a new record level of €3.3 billion ($3.88 billion) to €3.5 billion ($4.11 billion). EBIT is also expected to rise between 25% and 35%, reaching a range of €285 million ($335 million) to €310 million ($364 million). This updated forecast reflects the brand’s confidence in its growth prospects and the effectiveness of its strategies.
Overall, Hugo Boss’ considerable sales growth in the second quarter of FY22 demonstrates the brand’s resilience and ability to adapt to changing market conditions. Through its focus on brand refreshment, marketing initiatives, and collaborations, the brand has successfully captured the attention and loyalty of consumers, resulting in impressive sales figures. With an optimistic outlook for the future, Hugo Boss is well-positioned to continue its growth trajectory and maintain its position as a leading fashion brand.
Useful links:
1. Hugo Boss Official Website
2. Business of Fashion
