Following today’s release of Hugo Boss’s figures for the full year to 31 December 2022; Louise Deglise-Favre, Apparel Analyst at GlobalData, a leading data and analytics company, offers her view: “Hugo Boss ended FY2022 on a high, with currency adjusted sales rising 15% in Q4, contributing to full-year sales growth of 27%, thanks to the impressive success of its brand refresh at the beginning of the year. Its design revamp to include more casualwear and sportswear within its ranges helped modernize its image and resonate more with Gen Z consumers, as did its global marketing campaigns featuring high profile celebrities and athletes such as models Kendall Jenner and Naomi Campbell, boxer Anthony Joshua, rapper Future and TikTok star Khaby Lame. However, the group remains cautious in its FY2023 guidance, aware that such high levels of growth are not sustainable and high inflation and potential recessions in Europe will have an impact on consumer spending. It expects FY2023 sales to grow by mid-single digits and operating EBIT to increase between 5% and 12% to €350-375m, after a rise of 46.9% in FY2022.
“The group’s success in FY2022 was driven by its two largest regions, EMEA and the Americas, which grew 32% and 29% respectively on a currency-adjusted basis, due to insatiable consumer demand in key markets such as France, the UK, the US and the Middle East, where its marketing push was highly successful. Growth in Asia-Pacific was much more muted at only 6% due to persisting lockdowns in China throughout the year dampening the strong performances registered in the rest of the region. The end of China’s zero-COVID policies will hopefully allow the brand to finally see the full impact of its brand refresh in this key market in FY2023, and bring the region back to high levels of growth, especially as it will be less impacted by inflation.
“Both the HUGO and BOSS brands performed similarly in FY2022, with reported sales rising 32.0% and 30.9% respectively. Within the BOSS brand, menswear continued to be the most successful, with currency-adjusted sales rising 27% on the year compared to 21% for BOSS womenswear. BOSS womenswear remains less than a tenth of the size of menswear, so the brand needs to improve awareness of its womenswear offer if it wants to establish itself as a solid player within this market. Hugo Boss also continued to invest in its online proposition in FY2022, relaunching an improved version of its app and investing in data analysis tools to help identify consumer needs. These efforts allowed the group’s digital sales to rise 15% on the year, despite being up against tough comparative growth of 55% in FY2021. However, the online channel still only accounts for 17.7% of total sales, so it must continue to improve its proposition through features like personalized product recommendations and showing its products on models of different sizes if it hopes to fulfil its ambitions of becoming a “leading premium tech-driven fashion platform.”
