On the back of an ongoing spending to drive brand awareness, Hugo Boss reported revenues jumped 25 percent to 968 million euros over the first three months of 2023.
“We look back on an excellent start to the year, as we further accelerated brand momentum,” Hugo Boss CEO Daniel Grieder said in a statement, noting that Hugo Boss now expects to achieve its stated ambition of making 4 billion in annual sales in 2023, two years ahead of schedule.
Hugo Boss also raised guidance for the year. Instead of increasing between 4 and 6 percent as originally expected, the German brand now expects sales to grow around 10 percent in 2023.
The Q1 result comes after just over a year of an all-encompassing brand refresh that has brought Hugo Boss record-breaking financial results, after the brand was badly impacted by the COVID-19 health crisis, on top of several years of more staid sales results.
Grieder has focused on modern suiting with a more casual bent, as well as undertaking major marketing efforts and enlisting celebrity star-power to help boost sales.
The biggest increase came in the Americas, where sales rose 38 percent, currency adjusted, to bring in 195 million euros.
The German company has placed particular focus on the U.S., with collaborations with the likes of Russell Athletic and the National Basketball Association, as well as its recent celebrity-studded show in Miami. Sales in the U.S. rose 31 percent, currency adjusted, over the first quarter.
Sales in Asia-Pacific region gained 31 percent to bring in 141 million euros over Q1. Between January and March this year, Hugo Boss reported a “significant uptick in consumer sentiment in China after the abandonment of COVID-related restrictions” and a 25 percent increase in sales there.
In Europe, the Middle East and Africa, which still makes up around two-thirds of its business, Q1 sales rose 21 percent to 609 million euros. Business was particularly good in France and Germany, where sales rose 17 percent and 28 percent respectively.
Its more formal menswear line, Boss – continued to make up the majority of sales, gaining 23 percent in Q1. Boss womenswear rose 28 percent while the more casual Hugo line grew 31 percent.
Operating expenses rose by 21 percent in the first quarter to 529 million euros, with the costs of selling and marketing amounting to 414 million euros and administration costs adding another 114 million euros.
The company said that increased spending was “more than compensated for” by a positive result in EBIT, which increased by 63 percent to 65 million euros in Q1.
Hugo Boss raised its outlook for EBIT, predicting that this would grow somewhere between 10 and 20 percent over the course of this year, to come in between 370 million and 400 million euros. Previously the company had only expected EBIT to grow between 5 and 12 percent.
“At the same time, the company remains vigilant due to the persisting high levels of macroeconomic and geopolitical uncertainties,” Hugo Boss cautioned in its statement.
