HUGO BOSS sees strong growth in directly operated stores
HUGO BOSS announces first quarter results of 2010. The structural realignment of the Group implemented in 2009 with systematic expansion of directly operated stores (DOS) is taking effect and making a positive contribution to the sales and earnings development. Therefore, in the context of the generally improved market environment, sales from directly operated retail stores increased by 25% to EUR 83 million in the first quarter of 2010 (Q1 2009: EUR 67 million).
By contrast, considerably lower pre-order volumes from the recession-dominated year 2009 were still impacting sales in wholesale business. Against this background, the HUGO BOSS Group generated total sales of EUR 444 million in the first three months of the current fiscal year (Q1 2009: EUR 484 million), equivalent to a year-on-year decline of 8%.
“We have taken advantage of the economic challenge of the past year and created the conditions to allow us to exploit our growth potential even more effectively. On this basis and on the basis of the development in pre-orders for fall/winter, we are confident that 2010 will be a year of growth again for HUGO BOSS”, says Claus-Dietrich Lahrs, Chairman and CEO of the Managing Board of HUGO BOSS AG.
The trends in the international sales breakdown in the first quarter correspond to the growth markets identified for HUGO BOSS. Alongside overall continued sales declines in the European markets, growth was generated in North America and in the Asia/Pacific region.
Sales in Europe as a whole amounted to EUR 305 million, down 12% (adjusted for currency effects: 13%) on the previous year (Q1 2009: EUR 348 million).
By contrast, sales in the Americas increased by 5% in the local currency in the first three months of the current fiscal year. In the reporting currency, there was a 3% increase to EUR 82 million (Q1 2009: EUR 79 million). Sales in the U.S. were up 8% in the local currency. On a euro basis, sales increased by 2% to EUR 59 million (Q1 2009: EUR 58 million).
In the Asia/Pacific region, sales growth of 4% (adjusted for currency effects: 3%) to EUR 48 million was achieved (Q1 2009: EUR 47 million). At EUR 21 million, sales in the growth market China were considerably higher than in the previous year (Q1 2009: EUR 17 million).
Operating profit before interest, depreciation and amortization and special items (EBITDA before special items) decreased by 12% in the first quarter to EUR 92 million (Q1 2009: EUR 105 million). The adjusted EBITDA margin decreased slightly year-on-year to 20.7% (previous year: 21.6%). Consolidated net income decreased from EUR 64 million in the previous year to EUR 56 million.
At EUR 70 million, the operating cash flow was significantly above the figure for the first quarter of 2009 (EUR 46 million) due to improved inventory and receivables management. Net financial position decreased further to EUR 316 million as of March 31, 2010. A year ago, it had been at EUR 546 million and as of December 31, 2009 it amounted to EUR 379 million.
The HUGO BOSS Group will continue rigorously with the optimization measures already successfully implemented, particularly the expansion of its own retail business, and anticipates positive development in sales and earnings in the second half of the fiscal year. For the year as a whole, sales growth in the single-digit percentage range is anticipated, whilst adjusted EBITDA is expected to increase somewhat more strongly than sales in 2010.