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Investing.com -- Hugo Boss (ETR:BOSSn) has projected its 2025 sales to remain at roughly the same level as the previous year, as the company braces for continued macroeconomic and geopolitical volatility.
The German fashion house on Thursday said that it expects revenue to range between €4.2 billion and € 4.4 billion, reflecting a potential change of between -2% and +2% compared to the € 4.3 billion in sales recorded in 2024.
“Macroeconomic and geopolitical volatility to remain elevated in 2025, with business performance impacted by subdued consumer sentiment,” Hugo Boss said in a statement.
“Balanced approach between strategic investments and cost efficiency to ensure profitability increase,” the company added.
Analyst estimates from RBC Capital Markets indicate that Hugo Boss exceeded sales expectations for FY24, with reported revenue of € 4.31 billion surpassing the consensus of €4.26 billion.
EBIT of € 361 million was in line with forecasts, while EPS of € 3.09 met expectations. However, the company’s FY25 sales guidance is 3% below consensus, and its EBIT forecast at the midpoint is 1% lower than expected.
Hugo Boss emphasized that its strategic roadmap remains intact as it enters the final year of its ‘CLAIM 5’ strategy, which was launched in 2021. “
As we enter the final year of ‘CLAIM 5,’ our focus on delivering profitability improvements is sharper than ever,” said chief executive Daniel Grieder in a statement.
Gross margin performance was a bright spot, increasing by 30 basis points year-over-year, exceeding the consensus of +10bps.
In Q4 alone, margins improved by 90 basis points, reflecting sourcing efficiency measures that contributed at least +200bps. Promotional activity was no longer a drag in Q4, further supporting profitability.
Operating expense control was strong, with underlying growth of just +1% in H2, excluding € 50 million in store impairments.
Capital expenditure is projected to decrease further in 2025, ranging between € 200 million and € 250 million, down from € 286 million in 2024, reflecting a strategic shift towards greater efficiency.
Regional performance varied, with the Americas showing strong momentum in Q4, growing by 13% compared to consensus expectations of +6%.
EMEA sales grew by 6%, outperforming a consensus forecast of +3%, while APAC declined 2%, better than the expected -6% drop. Brick-and-mortar retail returned to growth in Q4, increasing 2% against a consensus expectation of a 1% decline, while brick-and-mortar wholesale and digital sales also exceeded expectations, growing by 15% and 11% in Q4, respectively.
Despite a cautious sales outlook, Hugo Boss anticipates an improvement in profitability. The company expects EBIT to increase between 5% and 22%, reaching between €380 million and €440 million, driven by sourcing efficiencies and disciplined cost management. The EBIT margin is also forecast to rise to between 9.0% and 10.0%, up from 8.4% in 2024.
Hugo Boss also announced a proposed dividend of € 1.40 per share for fiscal year 2024, up from € 1.35 in the previous year, signaling confidence in its ability to generate robust cash flow despite a challenging retail landscape.
RBC Capital Markets said that they view BOSS as a strong company that continues to gain market share in the premium apparel sector.
“Whilst we think that outlook for the premium apparel market does remain uncertain we are also encouraged by improved cost control in the business now,” the analysts said.
They believe the company is now prioritizing return on investment in areas such as marketing. Additionally, RBC Capital Markets expects further cost efficiencies, particularly in logistics, following the expansion of BOSS’s Filderstadt warehouse.