The Company Defied the Trend of Slowdown for the Accessible Luxury Segment
Hugo Boss evaded expectations of a downturn in spending for aspirational shoppers in 2023, reporting an 18 per cent uplift in full-year sales on a currency-adjusted basis to a record €4.2 billion. However, its fourth-quarter profits missed analyst expectations, sending shares down 10 per cent in early day trading.
The German company has exceeded its €4 billion 2025 sales target two years ahead of schedule, according to its preliminary results, released on Tuesday. The fourth quarter was the most successful in Hugo Boss’s history from a top-line perspective, with sales growing 13 per cent year-on-year to €1.18 billion.
EBIT increased 17 per cent to €121 million in Q4 — 5 per cent below consensus. Full-year EBIT rose 22 per cent to €410 million.
“We ended 2023 on a high note, making it a record year for Hugo Boss,” said CEO Daniel Grieder in a statement. “The double-digit top and bottom-line improvements in the final quarter are all the more remarkable considering the current challenging global market environment.”
Sales in EMEA grew 7 per cent year-on-year in Q4, reflecting strong results in Germany and France. The Americas maintained momentum, growing 18 per cent. APAC saw a 33 per cent increase as sales improved in China and Southeast Asia.
Sales from digital channels were up 26 percent in Q4, driven by both revenues from the brand’s own website and from retail partners. In brick-and-mortar stores, sales were up 12 percent as productivity and selling space improved.
Following the plateau of post-pandemic spending and expectations of recession, 2023 saw a general downturn for the aspirational luxury or premium-level consumer bracket, while luxury brands reoriented themselves to focus more on their biggest spenders. Hugo Boss defied the trend that saw softened outlooks for many of its peers, however, indicating that the company’s refreshed strategy as Boss and Hugo has been pivotal in bringing in a greater share of the market.
