The macroeconomic and geopolitical volatility will remain elevated in 2025, with business performance impacted by subdued consumer sentiment. A balanced approach between strategic investments and cost efficiency is expected to drive profitability growth. Sales in Europe, Middle East, and Africa (EMEA) are expected to remain stable, while the Americas are projected to grow in the low single-digit percentage range. The Asia/Pacific region is anticipated to see a moderate decline, reflecting uncertainties surrounding China’s industry recovery.
Hugo Boss is expecting sales to range between €4.2 billion and €4.4 billion (~$4.58 billion and $4.80 billion) in 2025.
Despite macroeconomic volatility, profitability is set to improve.
In 2024, sales grew 3 per cent to a record €4.307 billion (~$4.69 billion), with strong Q4 momentum.
EBIT fell 12 per cent to €361 million (~$393.49 million), while net income dropped 17 per cent YoY.
The group’s profitability is expected to improve, with EBIT forecast to rise to between €380 million and €440 million, corresponding to an EBIT margin of 9.0 per cent to 10.0 per cent, up from 8.4 per cent in 2024. Trade net working capital (TNWC) as a percentage of sales is expected to remain between 19 per cent and 20 per cent, supported by continued inventory management optimisations. Capital expenditure (capex) is projected to range between €200 million and €250 million, reflecting a focus on capex efficiency and normalisation of logistics investments.
“Since the launch of ‘CLAIM 5’ in 2021, we have made significant progress on our strategic journey and delivered above-trend growth. In 2024, we continued our growth trajectory, hitting record sales of €4.3 billion, supported by a strong performance in the final quarter. This success underscores the increased relevance of Boss and Hugo and highlights the great potential of our two brands,” said Daniel Grieder, chief executive officer (CEO) of Hugo Boss. “As we enter the final year of ‘CLAIM 5,’ our focus on delivering profitability improvements is sharper than ever. The solid foundation we have built over the past years fills us with confidence in our ability to succeed.”
Financial performance in fiscal 2024
Hugo Boss reported strong top-line growth in fiscal 2024 (FY24), achieving record revenues of €4.307 billion (~$4.69 billion), a 3 per cent increase in both reported and currency-adjusted terms. Growth was particularly robust in the fourth quarter (Q4), with sales surging 6 per cent year-over-year to €1.249 billion (~$1.36 billion), supported by a strong holiday season.
Sales momentum was fuelled by brand and product initiatives, with Boss Menswear and Boss Womenswear each growing 3 per cent, while Hugo sales increased 5 per cent, bolstered by the successful launch of Hugo Blue.
Region-wise, growth varied across key markets. In EMEA, revenue increased 3 per cent, driven by strong sales in Germany and double-digit gains in emerging markets, with Q4 sales up 6 per cent. The Americas saw an 8 per cent sales increase, supported by high single-digit growth in the US and a 13 per cent uptick in Q4. In contrast, Asia/Pacific sales declined 2 per cent, impacted by weak consumer demand in China, though Southeast Asia & Pacific recorded high single-digit growth.
Brick-and-mortar retail revenue remained flat for the year, as higher sales per transaction were offset by lower store traffic amid subdued consumer sentiment. However, Q4 saw a 2 per cent increase, signalling a return to growth. The wholesale business performed strongly, with an 8 per cent full-year sales increase and a 15 per cent jump in Q4, reflecting strong demand for Boss and Hugo among retail partners. The company’s global franchise expansion also contributed to its performance.
The company’s digital business continued its upward trajectory, posting a 6 per cent revenue increase in 2024, with Q4 sales rising 11 per cent. This growth was driven by improvements in the official channel and increased digital sales through partner platforms.
The company improved its gross margin to 61.8 per cent in 2024, up 30 basis points, driven by sourcing efficiencies and reduced airfreight use. Cost-saving measures kept operating expense growth at 6 per cent, with a slower increase in the second half (H2). Selling expenses rose 7 per cent, mainly due to brick-and-mortar costs. EBIT declined 12 per cent to €361 million (~$393.49 million), impacted by €47 million in impairment charges, lowering EBIT margin to 8.4 per cent. EBITDA grew 3 per cent to €775 million, while net income dropped 17 per cent to €224 million, with EPS at €3.09.
“We have not only capitalised on our growth opportunities but also placed equal emphasis on improving cost efficiency across all business areas – including operations, marketing, sales, and administration. And I am very pleased that we made substantial progress in the second half of the year,” said Grieder. “We managed to unlock meaningful productivity gains, which effectively limited expense growth and supported our bottom-line development. At the same time, we generated strong free cash flow in 2024, highlighting the strength of our business model.”
Fibre2Fashion News Desk (SG)
