Hugo Boss sales and earnings soar in FY14

Hugo Boss said that despite achieving record sales and earnings last fiscal year, the deterioration in market conditions emerging towards the end of the year, in particular in Europe, has continued to impact business this fiscal year. In 2014 as a whole, the group's currency-adjusted as well as reporting currency sales rose by 6 percent to 2,572 million euros (2,711.7 million dollars). The company expects positive growth momentum in 2015 with currency-adjusted group sales increase at a mid-single-digit rate, and operating profit EBITDA before special items between 5 percent and 7 percent.

In the fourth quarter of last year, Hugo Boss was able to increase group sales by 3 percent after currency adjustments. In euro terms, this corresponds to an increase of 5 percent. Sales growth on a currency-adjusted basis exceeded the group average in Europe with 4 percent rise and in Asia with 5 percent. A 1 percent increase was achieved in the Americas.

“We did well in a challenging market environment last year," said Claus-Dietrich Lahrs, Chief Executive Officer of Hugo Boss, adding, “We will be expanding our market position in the luxury and womenswear segments and reinforcing our own retail business by offering omni-channel services."

Sales in the group's own retail business including outlets and online business increased by 6 percent over the previous year on a currency-adjusted basis in the fourth quarter. Comp store sales in the group's own retail business were unchanged. The wholesale business remained stable compared with the previous year before currency effects. The gross margin contracted by 80 basis points to 68.2 percent compared to 69 percent, in the fourth quarter, last year. Driven by sales growth and disciplined cost management, EBITDA before special items still climbed by 6 percent and adjusted EBITDA margin increased by 30 basis points to 24.5 percent.

Driven by double-digit growth in Great Britain and expansion in nearly all markets in the region, sales in Europe increased by 7 percent. In the Americas, sales climbed by 4 percent on a currency-neutral basis. Asia/Pacific posted a 7 percent increase in currency-neutral sales owing to market share gains in China and solid growth in the other markets.

Full year sales in the group's own retail business were up 12 percent on the previous year on a currency-adjusted basis. Currency-adjusted comp store sales rose by 3 percent. The group’s retail network grew by a net 31 to 1,041 in the course of the year. Wholesale sales declined by 1 percent before currency effects.

The womenswear business rose at a particularly sharp rate, with sales climbing by 10 percent, adjusted for currency effects, this translates into an increase of 11 percent. Boss womenswear under the guidance of Artistic Director Jason Wu grew by as much as 18 percent over the previous year. The strong growth in the group's own retail business as well as lower markdowns caused the gross margin to improve by 120 basis points to 66.1 percent.

The Managing and the Supervisory Board of Hugo Boss have decided to propose an 8 percent increase in the dividend to 3.62 euros (3.82 dollars) for fiscal year 2014. Retail comparable store sales in 2015 are expected to rise. In addition to the opening of around 50 new stores, growth in this sales channel will be additionally driven by takeovers. Wholesale sales will be slightly lower compared to the prior year.