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Strong growth in all regions bolsters Hugo Boss Q3 sales
07 Nov '14
3 min read
Led by the Americas and the Asia Pacific region in particular, Germany based luxury fashion marketer – Hugo Boss reported a 9% year-on-year hike in third quarter of 2014 sales.
Hugo Boss sales rose 9% in the third quarter of 2014 to EUR 717 million from EUR 658 million in the third quarter of 2013.
“This performance was spurred by the Americas and Asia/Pacific in particular, which contributed growth rates of 11% and 13%, respectively, in local currencies,” Hugo Boss said.
Driven by an improving wholesale business, the pace of growth accelerated at Hugo Boss in the core markets of both, US and China.
“With a currency-adjusted 8% increase in sales, growth in Europe remained robust. However, momentum weakened across all regions towards the end of the reporting period, particularly in our own retail business”, it informed.
Currency-adjusted sales from Hugo Boss’s own retail business, which includes stores and online were up 11% from the same period of the prior year.
While, on a comparable store basis, currency-adjusted revenue growth from the retail division grew 4% year-on-year in the reporting quarter.
Benefiting from improved orders compared with the prior quarters and a shift in deliveries between the second and the third quarter, wholesale revenues climbed 7% after currency adjustment.
Gross profit margin expanded by 60 basis points from a year ago quarter to 64.1% in the quarter under review, primarily as a result of strong growth from its own retail business and reduced markdowns.
In the third quarter of 2014, EBITDA before special items at EUR 182 million went up by 5% from the prior year, when it stood at EUR 173 million.
Hugo Boss said operating expenses rose as a result of increased distribution and marketing expenses, causing the EBITDA margin to contract by 90 basis points to 25.4% from 26.3% in the year earlier period.
However, third quarter of 2014 net income climbed 2% to EUR 115 million from the corresponding quarter of 2013.
Working capital at the end of September 30, 2014 stood at EUR 548 million, up 23% from the quarter ending September 30, 2013.
This was primarily due to a 19% rise in inventories to EUR 486 million from EUR 409 million in the prior year quarter, mainly resulting from the expansion of its own retail business.
However, due to lower capital expenditure, net financial liabilities dropped by 16% to EUR 153 million at the end of September 30, 2014, from EUR 182 million at the end of September 30, 2013.
For the full year, Hugo Boss expects currency-adjusted sales to grow by 6% to 8%, and operating profit to rise by 5% to 7%, both up from 2013.
Hugo Boss plans to open around 50 new stores, excluding takeovers and expects capex of around EUR 130 million, which will be spent mainly on expansion and renovation of its own retail network. (AR)
Hugo Boss sales rose 9% in the third quarter of 2014 to EUR 717 million from EUR 658 million in the third quarter of 2013.
“This performance was spurred by the Americas and Asia/Pacific in particular, which contributed growth rates of 11% and 13%, respectively, in local currencies,” Hugo Boss said.
Driven by an improving wholesale business, the pace of growth accelerated at Hugo Boss in the core markets of both, US and China.
“With a currency-adjusted 8% increase in sales, growth in Europe remained robust. However, momentum weakened across all regions towards the end of the reporting period, particularly in our own retail business”, it informed.
Currency-adjusted sales from Hugo Boss’s own retail business, which includes stores and online were up 11% from the same period of the prior year.
While, on a comparable store basis, currency-adjusted revenue growth from the retail division grew 4% year-on-year in the reporting quarter.
Benefiting from improved orders compared with the prior quarters and a shift in deliveries between the second and the third quarter, wholesale revenues climbed 7% after currency adjustment.
Gross profit margin expanded by 60 basis points from a year ago quarter to 64.1% in the quarter under review, primarily as a result of strong growth from its own retail business and reduced markdowns.
In the third quarter of 2014, EBITDA before special items at EUR 182 million went up by 5% from the prior year, when it stood at EUR 173 million.
Hugo Boss said operating expenses rose as a result of increased distribution and marketing expenses, causing the EBITDA margin to contract by 90 basis points to 25.4% from 26.3% in the year earlier period.
However, third quarter of 2014 net income climbed 2% to EUR 115 million from the corresponding quarter of 2013.
Working capital at the end of September 30, 2014 stood at EUR 548 million, up 23% from the quarter ending September 30, 2013.
This was primarily due to a 19% rise in inventories to EUR 486 million from EUR 409 million in the prior year quarter, mainly resulting from the expansion of its own retail business.
However, due to lower capital expenditure, net financial liabilities dropped by 16% to EUR 153 million at the end of September 30, 2014, from EUR 182 million at the end of September 30, 2013.
For the full year, Hugo Boss expects currency-adjusted sales to grow by 6% to 8%, and operating profit to rise by 5% to 7%, both up from 2013.
Hugo Boss plans to open around 50 new stores, excluding takeovers and expects capex of around EUR 130 million, which will be spent mainly on expansion and renovation of its own retail network. (AR)
Fibre2fashion News Desk - India
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