Hugo Boss (BOSSn.DE) exceeded industry expectations with a 20% revenue increase in the second quarter. Despite weak demand in China and the US, the German fashion behemoth did okay. Rebranding and marketing worked.
China’s tardy rebound from the pandemic produced worry in the luxury goods industry, but Hugo Boss showed strength. After accounting for currency, the fashion brand reported a 56% growth in sales in China, even though the economy is improving more slowly than predicted. Tourism boosted the company’s standing throughout EMEA and the Americas. Both times.
Hugo Boss opened 17 new stores in the first half of the year. The brand focused on the Asian market, where sales increased significantly after currency adjustments. The fashion giant’s first larger store in Guangzhou, China’s fifth-largest city, will open in the fourth quarter.
The recent improvement in Hugo Boss’s outlook didn’t affect Wednesday morning’s 1% decline, even though shares had already increased 32% this year. However, Deutsche Bank analysts remain cautious and suspicious about the improved working capital, especially given the retailer is struggling with overstocking. Despite first-half inventory levels rising 53% in adjusted currency prices, Hugo Boss wants things to return to normal slowly. By 2025, the corporation plans to reduce stocks to 20% of sales. Stocks made 56.6% of sales in June.
After currency adjustments, second-quarter sales reached 1.03 billion euros ($1.13 billion). Analysts predicted this. The company has benefited from the growth of the Boss and Hugo brands, especially among younger clients.
Hugo Boss now predicts 12%–15% revenue growth. It now expects revenues of 4.1 billion to 4.2 billion euros, up from 10% growth to 4 billion euros, due to the company’s incredible sales momentum.
Hugo Boss anticipates a profitable 2023. The corporation now aims for 400–420 million euros, up from 370–400 million euros. Hugo Boss wants 20%–25% growth.
Hugo Boss is growing steadily and has a plan. These prove that the organization can handle adverse markets and connect with younger, more discerning customers.
Euros equal 0.9097 dollars.