BERLIN — Following a record year in 2010, Hugo Boss has sustained the momentum into 2011, posting double-digit growth in first-quarter earnings and sales.
This story first appeared in the April 29, 2011 issue of WWD. Subscribe Today.
Net income for the quarter surged 48 percent to 83.5 million euros, or $114.2 million. Operating income (earnings before interest, taxes, depreciation and amortization before special items) rose 43 percent to 132 million euros or $180.5 million, while group sales gained 21 percent in euros (19 percent on a currency-adjusted basis) to reach 539 million euros or $736.9 million. All dollar figures are converted from the euro at an average exchange rate for the period.
All regions generated double-digit earnings and sales gains. Moreover, the quarter’s strong performance extended to all Boss brands, product categories and distribution channels, chief executive officer Claus-Dietrich Lahrs pointed out. “We will certainly have another good quarter in Q2,” he told WWD.
In Europe, earnings were up 21 percent, and the region’s sales rose 14 percent. Eastern Europe, which had been hard hit in 2010, saw sales grow 30 percent in the quarter, and, despite shaky national economies, sales in Spain and Portugal gained 26 percent and 24 percent in the U.K. Domestic sales were up 14 percent.
The Americas posted a 98 percent rise in earnings, which Boss attributed to both increased sales, which grew 21 percent, as well as an improved gross profit margin linked to the group’s ever-widening retail business.
“The U.S. is certainly the driving engine because of its sheer size. And I don’t see any major changes in the quarter to come,” Lahrs commented.“ Wholesale business in the states was up 25 percent in the quarter, and rose 29 percent in Boss directly operated stores there.
In the Asia-Pacific region, earnings also rose a significant 64 percent, with sales up 46 percent.
Overall, the group’s wholesale business has shown a solid recovery, with sales up 10 percent on a currency adjusted basis.
Boss’ own retail channel, including outlets and online, advanced 38 percent on a currency adjusted basis, while comp-store sales in directly operated Boss stores rose 8 percent in local currency.
Seventy new doors are planned for 2011 — 15 relating to the acquisition of U.K. franchise partner Moss Bros. One third of the remaining 55 doors will be based in China, Lahrs said.