Hugo Boss reaffirms 2024 guidance, Asia challenges linger
By Josh White
Date: Tuesday 05 Nov 2024
(Sharecast News) - Hugo Boss reaffirmed its full-year guidance for 2024 after reporting modest revenue growth in the third quarter, with a 1% increase year-to-date, although challenges in the luxury market meant it was unlikely to meet its 2025 targets.
The German fashion brand's revenue rose by 4% in the Americas and 1% in Europe, the Middle East, and Africa (EMEA), offsetting a 7% decline in the Asia-Pacific region, primarily due to continued weak demand in China.
Total quarterly revenue remained flat at €1.02bn, while profit before tax fell 12% to €78m, reflecting macroeconomic pressures and consumer caution, particularly in the Asia-Pacific region.
In its third quarter, Hugo Boss reported EBIT of €95m, down 7%, with an EBIT margin of 9.3%.
The company managed to keep operating expenses stable, demonstrating a continued emphasis on cost efficiency.
That strategy contributed to a year-to-date free cash flow of €197m, an improvement driven by optimised trade net working capital.
Amid a challenging environment, Hugo Boss said it was focussed on strengthening customer engagement, launching its BOSS Fall/Winter 2024 campaign with brand ambassador David Beckham, and expanding its customer loyalty program, Hugo Boss XP, which saw a 25% rise in members over the past year.
Key initiatives for the fourth quarter included a holiday campaign featuring an all-star cast and the opening of a new flagship Boss store in Shanghai in December.
Chief executive officer Daniel Grieder reiterated the company's commitment to driving profitability through efficiency gains and strategic investments, while maintaining its 2024 revenue target of 1% to 4% growth.
"As we approach the important final quarter of 2024, we will continue investing in key strategic initiatives and projects to further strengthen our brands and elevate customer connection with Boss and Hugo," he said.
"At the same time, we remain focused on leveraging our strong operational platform and driving further cost efficiencies.
"This balanced approach is essential for safeguarding our profitability in 2024 and beyond, while ensuring the long-term success of Hugo Boss."
Reporting by Josh White for Sharecast.com.
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