WWD.com/business-news/designer-luxury/boss-net-leaps-30-in-q4-6714040/
government-trade
government-trade

Hugo Boss Net Leaps 30% in Q4

Sales in the period rose by 22 percent to 607 million euros, or $787.3 million.

BERLIN — Strong fourth-quarter results helped Hugo Boss close 2012 with record sales and earnings, making this the group’s third record-breaking year in a row.

According to preliminary figures released Friday, the German apparel giant boosted net income attributable to equity holders 30 percent to 70 million euros, or $90.8 million, in the fourth quarter.

Sales rose by 22 percent to 607 million euros, or $787.3 million, in the period, or 18 percent on a currency adjusted basis. Boss said all regions and distribution channels contributed to the growth.

The group’s wholesale business also generated a double-digit increase, driven by positive effects from the new delivery cycle. While Boss did not release sales figures at this time for its own retail business, the group pegged fourth-quarter comp-store sales growth at 4 percent.

RELATED CONTENT: See More Earnings Coverage Here >>

In a research note, Citi analyst Thomas Chauvet touted the results as “the strongest growth in the premium and luxury apparel sector and one of the few companies to report double-digit growth in 4Q.” Moreover, Boss shares have “once again outperformed year-to-date the luxury sector.”

Yet as the Citi report noted, the strong fourth-quarter performance, especially regarding wholesale business, was “driven by the technical impact of the shift to a four-collection cycle (winter) as well as early spring 2013 deliveries.”

Another analyst concurred. “I wouldn’t overreact to fourth-quarter results. They’re primarily an effect of shifting spring deliveries forward.” Nonetheless, he said, “They’re doing well in the USA in particular, and are also doing a good job keeping their retail channel clear.” That is, making sure there’s not too much stock in the stores so there’s room to bring in new merchandise, he explained. “It should mean they’re positioned to start 2013 well,” said the analyst, who requested anonymity.

Earnings before interest, taxes, depreciation and amortization before special items surged 42 percent to 138 million euros, or $179 million, primarily fuelled by the strong sales growth and strict control of operating expenses, according to the company.

RELATED STORY: Hugo RTW Fall 2013 >>

For 2012, net income attributable to equity holders grew 8 percent to 307 million euros, or $394.8 million, with EBITDA before special items gaining 13 percent to 529 million euros, or $680.3 million.  Sales rose 14 percent to 2.35 billion euros, or $3.02 billion, which corresponds to growth of 10 percent on a currency-neutral basis.

All dollar figures are converted from the euro at an average exchange rate for the periods to which they refer.

At the present time, Boss chief executive officer Claus-Dietrich Lahrs said that “despite the still challenging market environment, I am confident that we will continue to post stronger growth than the overall market in 2013.”

Final results for fiscal 2012 and the outlook for 2013 will be published on March 14.