Hugo Boss (BOSS) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales declined 1% year-over-year to €1,015 million, outperforming the sector average decline of 4% due to strong brand momentum and digital engagement, despite weak retail sentiment in China and the UK.

• EBIT dropped 42% to €70 million in Q2, reflecting weak consumer demand, higher operating expenses, and market uncertainty.

• H1 2024 group sales rose 3% currency-adjusted to €2,029 million, but EBIT fell 25% to €139 million due to increased costs and challenging macroeconomic conditions.

• The CLAIM 5 strategy and brand initiatives, including digital engagement and partnerships, continue to drive relevance and long-term growth, especially among younger audiences.

• The company remains committed to strategic investments and cost discipline to navigate market headwinds.

Financial highlights

• H1 2024 sales grew 3% year-over-year, with BOSS menswear up 2%, BOSS womenswear up 4%, and HUGO up 6%.

• Q2 sales: EMEA down 2%, Americas up 5%, Asia-Pacific down 4%.

• Brick-and-mortar wholesale sales rose 5% in Q2, while retail sales fell 2% and digital sales declined 4%.

• Gross margin improved by 50 bps in Q2 and 30 bps in H1, reaching 62.1%.

• Operating expenses increased 7% in H1, mainly due to inflation, retail expansion, and higher selling and marketing costs.

Outlook and guidance

• 2024 group sales expected to rise 1%-4% to €4.20–4.35 billion, with a slight negative currency impact.

• Full-year EBIT targeted between €350 million and €430 million (–15% to +5% vs. prior year).

• Gross margin forecasted above 62% for 2024, aligning with the midterm range of 62%-64%.

• Operating expenses in H2 anticipated to increase by 1%-3% due to cost-saving initiatives.

• Free cash flow projected at around €500 million for 2024, with H1 free cash flow at €156 million.