German fashion house Hugo Boss has raised its sales target to 5 billion euros by 2025, up 11 percent CAGR against 2022.
The company expects EBIT to reach at least 600 million euros with EBIT margin of at least 12 percent.
“Hugo Boss is raising its 2025 top and bottom-line ambition. While it aims to achieve its previous mid-term sales target of 4 billion euros already this year, Hugo Boss is now confident of generating revenues of around 5 billion euros by 2025. This represents a strong compound average growth rate (CAGR) of 11 percent compared to fiscal year 2022, thus well above the anticipated industry growth,” said Daniel Grieder, chief executive officer of Hugo Boss.
Hugo Boss to achieve higher revenue target by 2025
The company will therefore continue to keep its marketing investments at a level between 7 percent and 8 percent of group sales until 2025. Consequently, by 2025 the company is now targeting sales of around 3.5 billion euros for Boss menswear, around 500 million euros for Boss womenswear and around 1 billion euros for Hugo.
The company aims to increase revenues in brick-and-mortar retail to more than 2.5 billion euros by 2025. In this context, the company is targeting store productivity improvements of at least 3 percent per year, supported by investments of up to 600 million euros between 2021 and 2025 to modernise, further optimise, and selectively expand its global retail footprint.
Hugo Boss to expand global footprint
The plan includes the further rollout of the latest and more digitised Boss and Hugo store concepts as well as growing the full-price store network to around 500 points of sale by 2025. The company will further strengthen its global franchise business by increasing the total number of full-price franchise stores from 300 to around 500 over the coming years. Overall, the Company is now targeting brick-and-mortar wholesale sales of around 1.3 billion euros by 2025.
The digital business is expected to continue its double-digit growth trajectory in the years to come, with digital sales still expected to cross more than 1 billion euros by 2025. The licence business is expected to contribute up to 200 million euros to Group revenues by 2025. The company will continue to exploit its strong momentum in EMEA, where sales are forecast to grow at a mid to high-single-digit CAGR (2022 2025) to a level of more than 2.8 billion euros, with strong contributions expected from both key markets and important growth markets such as the Middle East.
In the Americas, revenues are projected to grow at a high single-digit CAGR to around 1 billion euros by 2025. In Asia/Pacific, revenues are set to grow at a low double-digit CAGR with expansion from current 13 percent to around 20 percent by 2025, implying a revenue level of around 1 billion euros in China.
“The superior top-line ambition is coupled with significant improvements in EBIT, which is forecast to grow to a level of at least 600 million euros by 2025, representing a strong CAGR of at least 21 percent compared to fiscal year 2022. Consequently, HUGO BOSS now targets an EBIT margin of at least 12 percent by 2025. The increased EBIT margin target reflects the company updated gross margin projections, exceeding initial expectations,” added Grieder.