HUGO BOSS WITH STRONG PERFORMANCE IN Q4 2024 – PROFITABILITY TO INCREASE IN 2025 DESPITE CHALLENGING MARKET CONDITIONS

Q4/FY 2024 developments

• Currency-adjusted Group sales increase 3% to record level of EUR 4.3 billion in 2024, fueled by strong performance in Q4 (+6%)
• Accelerating momentum in the Americas (Q4: +13%; FY: +8%) and EMEA (Q4: +6%; FY: +3%); Asia/Pacific (Q4: –2%; FY: –2%) impacted by subdued consumer demand in China 
• Robust revenue improvements in brick-and-mortar wholesale (Q4: +15%; FY: +8%) and digital (Q4: +11%; FY: +6%); brick-and-mortar retail returns to growth in Q4 (Q4: +2%; FY: 0%)
• Gross margin improvements (Q4: +90 bp; FY: +30 bp) driven by substantial efficiency gains in sourcing
• Growth in operating expenses excl. retail impairments¹ declines noticeably in the second half of 2024, reflecting accelerated focus on cost efficiency (H1: +6%; H2: +1%)
• EBIT totals EUR 361 million (2023: EUR 410 million), impacted by retail impairments¹; EBIT margin amounts to 8.4% (2023: 9.8%)
• Free cash flow amounts to EUR 497 million in 2024 (2023: EUR 96 million), fueled by improvements in trade net working capital and CapEx efficiency
• Proposed dividend of EUR 1.40 per share for fiscal year 2024 reflects confidence in ongoing robust cash-flow generation (2023: EUR 1.35)

Outlook 2025

• Macroeconomic and geopolitical volatility to remain elevated in 2025, with business performance impacted by subdued consumer sentiment
• Group sales projected to remain broadly in line with prior year, ranging between EUR 4.2 billion and EUR 4.4 billion (–2% to +2%)
• Balanced approach between strategic investments and cost efficiency to ensure profitability increase
• EBIT to increase between +5% and +22% to EUR 380 million and EUR 440 million; EBIT margin to grow to a level of between 9.0% and 10.0%, supported by further efficiency gains

Daniel Grieder, Chief Executive Officer of HUGO BOSS: “Since the launch of ‘CLAIM 5’ in 2021, we have made significant progress on our strategic journey and delivered above-trend growth. In 2024, we continued our growth trajectory, hitting record sales of EUR 4.3 billion, supported by a strong performance in the final quarter. This success underscores the increased relevance of BOSS and HUGO and highlights the great potential of our two brands. Yet, the macroeconomic challenges intensified in 2024 and led to a sharp industry slowdown. We therefore focused even more on customer centricity and on our most impactful initiatives. From welcoming David Beckham for a multi-year partnership with BOSS to unveiling our new denim line HUGO Blue and launching our new customer loyalty program HUGO BOSS XP, we kept customers inspired and engaged throughout the year. We have not only capitalized on our growth opportunities, but also placed equal emphasis on improving cost efficiency across all business areas – including operations, marketing, sales, and administration. And I am very pleased that we made substantial progress in the second half of the year. We managed to unlock meaningful productivity gains, which effectively limited expense growth and supported our bottom-line development. At the same time, we generated strong free cash flow in 2024, highlighting the strength of our business model. As we enter the final year of ‘CLAIM 5,’ our focus on delivering profitability improvements is sharper than ever. The solid foundation we have built over the past years fills us with confidence in our ability to succeed. At the same time, macroeconomic and geopolitical volatility remains high, weighing on consumer sentiment and impacting our business performance since the beginning of the year. Against this backdrop, we stay focused and vigilant, closely monitoring global market developments. Likewise, we remain committed to leveraging the strength of our brands, while aligning strategic investments with efficient cost management. This balanced approach will help us drive profitability and create shareholder value in 2025 and beyond.”

¹ In fiscal year 2024, HUGO BOSS recorded non-cash impairment charges totaling EUR 47 million (2023: write-ups of EUR 4 million), reflecting the challenging brick-and-mortar retail environment in 2024. Including impairments/write-ups, operating expenses on a reported basis were up 7% in H1 and up 5% in H2 2024.

Sales performance in fiscal year 2024
HUGO BOSS recorded solid top-line improvements in fiscal year 2024, benefiting from the continued execution of its “CLAIM 5” strategy and improved brand relevance of BOSS and HUGO. Against the backdrop of persistent macroeconomic and geopolitical challenges, currency-adjusted Group sales increased 3%. In Group currency, revenues also expanded by 3%, reaching a record level of EUR 4,307 million in 2024. Growth was particularly robust in the final quarter of 2024, with momentum accelerating quarter over quarter, supported by a successful holiday season. Consequently, Group sales in Q4 came in 6% above the prior-year level, both in reported and currency-adjusted terms, amounting to EUR 1,249 million (Q4 2023: EUR 1,177 million).

• In 2024, the execution of several key brand and product initiatives as part of the “CLAIM 5” continued to fuel momentum for both brands. Consequently, currency-adjusted revenues for both BOSS Menswear and BOSS Womenswear were up 3%, while currency-adjusted sales for HUGO expanded by 5%, supported by the successful launch of HUGO Blue.  
• From a geographical perspective, growth in 2024 varied across regions. In EMEA, currency-adjusted revenues increased by 3%, driven by sales improvements in Germany and double-digit growth in emerging markets. In the fourth quarter, currency-adjusted revenues in EMEA expanded by 6%. In the Americas, sales in 2024 were up 8% currency-adjusted with all markets contributing to growth, including a high single-digit uptick in the important U.S. market. This performance reflects robust momentum throughout the year, including revenues improving by 13% in Q4. Currency-adjusted sales in Asia/Pacific, on the other hand, remained 2% below the prior-year level, both on a full-year and fourth-quarter basis. While HUGO BOSS posted high single-digit growth in Southeast Asia & Pacific, sales in China remained below the prior-year level, reflecting overall muted local consumer demand. Sales in the license business increased 4% in 2024.
• In 2024, currency-adjusted revenues in brick-and-mortar retail (including freestanding stores, shop-in-shops, and outlets) remained on par with the prior-year level. An increase in sales per transaction was offset by a decline in store traffic, reflecting muted consumer sentiment across key markets. In the fourth quarter, however, revenues in brick-and-mortar retail returned to growth, up 2% currency-adjusted. In brick-and-mortar wholesale, currency-adjusted sales expanded by 8% in 2024 – including a 15% uptick in the final quarter – reflecting robust demand for BOSS and HUGO among wholesale partners. While this enabled both brands to further improve visibility and penetration at key department stores, the Company also successfully expanded its global franchise business in emerging markets. At the same time, also the Group’s digital business continued its growth trajectory with currency-adjusted sales up 6% in 2024, driven by an 11% revenue increase in Q4. This performance reflects improve­ments at hugoboss.com as well as an increase in digital sales generated with partners.

Earnings development for fiscal year 2024

• In fiscal year 2024, HUGO BOSS recorded a solid improvement in its gross margin, up 30 basis points to a level of 61.8%. Efficiency gains in sourcing as well as a successful reduction in the airfreight share, which more than compensated for an overall rise in global freight costs, provided substantial tailwinds to gross margin development. These gains more than compensated for adverse channel and regional mix effects, unfavorable currency effects, and an overall promotional environment. Gross margin development was particularly strong in the fourth quarter, up 90 basis points to a level of 62.4%.
• Following the implementation of several cost efficiency measures, HUGO BOSS successfully mitigated growth in operating expenses over the course of the year. Overall, this translated into operating expenses growing by 6% in fiscal year 2024, with the increase in the second half of the year being substantially lower compared to the first half. When excluding non-cash impairment charges, operating expenses were up 4% in 2024, with operating expenses in the second half broadly on the prior-year level (H1: +6%; H2: +1%).
• Selling and marketing expenses were up 7% in 2024, growing 180 basis points to a level of 43.4% of Group sales (2023: 41.6%). As part of this, selling expenses for brick-and-mortar retail were up 14%, totaling EUR 989 million or 23.0% of Group sales (2023: EUR 870 million; 20.7%). The increase was driven by inflation- and expansion-related costs, alongside non-cash impairment charges of EUR 47 million in 2024 (2023: write-up of EUR 4 million), reflecting the challenging brick-and-mortar retail environment in 2024. Marketing investments, on the other hand, decreased 6% to EUR 309 million (2023: EUR 328 million). This primarily reflects the Company’s focus on driving marketing efficiency by prioritizing brand initiatives with the highest return. Consequently, marketing investments added up to 7.2% of Group sales (2023: 7.8%), in line with the Company’s target range of 7% to 8%.
• Administration expenses remained broadly stable in 2024, as overall cost inflation was largely offset by efficient overhead cost management. In particular, HUGO BOSS implemented several initiatives to enhance organizational productivity by eliminating non-essential spending and prioritizing key strategic initiatives. As a percentage of sales, administration expenses decreased by 10 basis points to a level of 10.0% (2023: 10.1%).
• Supported by the Company’s enhanced focus on cost efficiency, particularly in the second half of the year, the decrease in operating profit (EBIT) was limited to 12%. As a result, EBIT amounted to EUR 361 million in 2024, including non-cash impairment charges of EUR 47 million (2023: write-up of EUR 4 million). Accordingly, the Group's EBIT margin decreased by 140 basis points to a level of 8.4%, as sales and gross margin improvements were more than offset by the increase in operating expenses.
• EBITDA increased by 3% to EUR 775 million (2023: EUR 752 million), resulting in a slight increase in EBITDA margin to 18.0% (2023: 17.9%).
• At EUR 59 million, net financial expenses (financial result) were 11% above the prior-year level, mainly reflecting higher interest expenses. The Group tax rate was slightly above the prior year, thus gradually normalizing to a level of 26%.
• Consequently, net income amounted to EUR 224 million, 17% below the prior-year level. As part of this, net income attributable to shareholders also decreased by 17% to EUR 213 million, resulting in earnings per share of EUR 3.09.

Net assets and financial position for fiscal year 2024

• Trade net working capital (TNWC) decreased by 9% on a currency-adjusted basis and amounted to EUR 791 million (2023: EUR 870 million), mainly reflecting the efficient management of trade receivables and trade payables. Inventories remained broadly on the prior-year level, totaling EUR 1,072 million (2023: EUR 1,066 million), mainly reflecting an increase in goods in transit. As a percentage of Group sales, however, inventories reached 24.9%, down 50 basis points year over year (2023: 25.4%), reflecting the Company’s measures to optimize inventory levels. Accordingly, the moving average of TNWC as a percentage of sales based on the last four quarters improved to a level of 19.6% (2023: 20.8%).
• Capital expenditure decreased 4% to EUR 286 million (2023: EUR 298 million), reflecting the Company’s focus on driving CapEx efficiency. In 2024, HUGO BOSS prioritized strategically relevant investments in its global distribution network, the further digitalization of its business model, and the expansion of its logistics capacities and headquarters.
• Free cash flow amounted to EUR 497 million in fiscal year 2024, significantly above the prior-year level (2023: EUR 96 million) and thus underlining the Company’s highly cash-generative business model. This development was supported by particularly strong cash flow generation in Q4, mainly reflecting improvements in trade net working capital and increased CapEx efficiency.
• The net financial position, excluding the impact of IFRS 16, improved to minus EUR 78 million at the end of fiscal year 2024 (2023: minus EUR 213 million). Including the impact of IFRS 16, this corresponds to minus EUR 1,038 million (2023: minus EUR 1,006 million).

Outlook for fiscal year 2025

• In 2025, the final year of “CLAIM 5,” HUGO BOSS remains committed to making further strategic progress and driving profitability improvements. By investing in key strategic initiatives, the Company is determined to further drive brand relevance and exploit its growth opportunities. At the same time, HUGO BOSS remains focused on leveraging its global sourcing activities and driving additional cost efficiencies by rigorously managing operating expenses.   
• HUGO BOSS expects fiscal year 2025 to be marked by ongoing macroeconomic and geopolitical volatility. In particular, subdued consumer sentiment and muted store traffic have been weighing on business performance since the beginning of the year, with the overall market environment remaining uncertain also going forward.
• Against this backdrop, HUGO BOSS forecasts Group sales in reporting currency to remain broadly in line with the prior year, ranging between EUR 4.2 billion and EUR 4.4 billion in 2025. Sales in the EMEA region are forecast to remain around the prior-year level, while sales in the Americas are projected to increase in the low single-digit percentage range. For Asia/Pacific, HUGO BOSS anticipates sales to moderately decrease, reflecting ongoing uncertainties regarding the further recovery of industry development in China.
• At the same time, HUGO BOSS anticipates notable profitability improvements in fiscal year 2025, supported by its ongoing focus on driving additional sourcing and cost efficiencies. Consequently, operating profit (EBIT) is expected to increase to a level of between EUR 380 million and EUR 440 million, with EBIT margin forecast to improve to a level of 9.0% to 10.0% in 2025 (2024: 8.4%).
• Trade net working capital (TNWC) as a percentage of sales is expected to remain at a level of between 19% and 20% in 2025, with continued optimizations in inventory management anticipated to support this development.
• Capital expenditure is forecast to range between EUR 200 million and EUR 250 million in 2025, reflecting the Company’s increased emphasis on driving CapEx efficiency as well as a normalization in logistics investments going forward.

Dividend proposal for fiscal year 2024

• The Managing Board and the Supervisory Board intend to propose to the Annual General Meeting on May 15, 2025 a dividend of EUR 1.40 per share for fiscal year 2024. This reflects an increase of 4% compared to the prior-year level (2023: EUR 1.35) and highlights the Company’s commitment toward a progressive dividend. The decision underscores the robust financial position of HUGO BOSS as well as its confidence to generate significantly positive cash flows also in the future.
• The proposal is equivalent to a payout ratio of 45% of the Group’s net income attributable to shareholders in fiscal year 2024 (2023: 36%), in line with the Company’s target payout ratio of between 30% and 50%, as laid out in “CLAIM 5.”

HUGO BOSS publishes Annual Report 2024

• Further information can be found in the HUGO BOSS Annual Report 2024. This year’s report comes with the motto “FOCUS,” highlighting the Company’s emphasis on game-changing initiatives and efficiency gains in 2024, laying an important foundation for the long-term success of HUGO BOSS. The digital report offers several interactive features, exciting stories, and a dedicated video statement of Daniel Grieder, CEO of HUGO BOSS.

If you have any questions, please contact:

Media Relations
Carolin Westermann
Senior Vice President Global Corporate Communications
Phone: +49 7123 94-86321
E-mail: carolin_westermann@hugoboss.com

Investor Relations
Christian Stöhr
Senior Vice President Investor Relations
Phone: +49 7123 94-87563
E-mail: christian_stoehr@hugoboss.com