Hugo Boss turnover increases, forecasts sales and profit growth in FY19

For the full year, sales of the Hugo Boss Group, the company said in a
statement, rose by 2 percent to 2,796 million euros (3,160.7 million
dollars) in 2018 and on a currency-adjusted basis, the increase was 4
percent. The company added that decline in gross profit margin is mainly
due to investments in the product quality and negative currency effects.
EBIT rose by 2 percent, however, the EBIT margin declined by 10 basis point
and net income was also up by 2 percent in fiscal year 2018.

“2018 was a good year for Hugo Boss. 2019 will be an even better year
for our company,” said Mark Langer, CEO of Hugo Boss, adding, “The current
year will be all about the execution of our Business Plan 2022. With the
focus clearly set on our strategic priorities, we are ensuring profitable
growth in 2019 and beyond. Strong momentum in our own online business and
in Asia will make a significant contribution this year.”

Hugo Boss reports strong growth in FY18

Currency-adjusted sales in the group’s own retail business grew by 4
percent, supported by strong growth of 41 percent in the company’s own
online business, while comp store sales were up 5 percent and
wholesale currency-adjusted sales increased 5 percent. Sales in the license
business were down 4% on the prior year.

Among brands, the company added, while Boss achieved currency-adjusted
sales growth of 6 percent, Hugo recorded a sales decrease of 4
percent. Boss benefited in particular from high single-digit growth in
businesswear and casualwear. Hugo recorded strong double-digit growth in
casualwear, which was more than offset by declines in businesswear caused
by changes in the distribution strategy.

The company further said that the number of own freestanding retail
stores increased by three in fiscal year 2018, to 442. 13 newly opened Boss
stores, mainly in Europe and Mainland China, were offset by 22 closures of
Boss stores with expiring leases or relocation in two cases. In addition,
twelve Hugo stores with their own store concept were opened in selected
major cities, including London and Paris.

Hugo Boss expects mid-single-digit revenue rise in FY19

Hugo Boss expects to increase group sales in 2019 at a mid-single-digit
percentage rate on a currency-adjusted basis. The group assumes that sales
in Europe will increase by a low to mid-single-digit percentage rate
adjusted for currency effects. Based on the assumption of further increases
in the US business, currency-adjusted sales in the Americas are expected
also increase at a low to mid-single-digit percentage rate in 2019. In
Asia, currency-adjusted sales are forecast to grow by mid- to high
single-digit percentage rates, driven by significant growth in the Chinese

For the group’s own retail business, sales in 2019 are expected to grow
at a mid to high single-digit percentage rate on a currency-adjusted basis.
The forecast is based on the assumption that comp store sales will grow at
a mid-single digit percentage rate and that the online business will
contribute over-proportionately to the growth of the group’s own retail
business again in 2019. Wholesale sales for the current year are expected
to be slightly below the prior year’s level, mainly reflecting the ongoing
conversion of online platforms into concession businesses. License sales
are expected to grow in the mid-single-digit percentage range.

Hugo Boss aims to increase the group’s gross profit margin in 2019 by up
to 50 basis points compared to the prior year. The group expects EBIT to
increase at a high single-digit percentage rate in 2019. Above all, the
predicted increase in gross profit is expected to contribute to this. The
group’s net income is also forecast to grow at a high single-digit
percentage rate compared to the prior year.

The managing board and supervisory board of Hugo Boss Ag intend to
recommend a 5 cent increase in dividend, to 2.70 euros per share, at the
annual shareholders’ meeting for fiscal year 2018.



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