Comparison of actual and forecast business performance

  • Consistent execution of strategy with positive effect on business performance in 2019
  • Business in North America and Hong Kong below initial expectations
  • Challenging market environment requires adjustment of full year 2019 outlook

During the course of the year, HUGO BOSS was confronted with growing economic uncertainties in some of its key markets. In particular, in North America the market environment further deteriorated during the course of the year, thus weighing on the Group’s top- and bottom line performance. In addition, business in Hong Kong was significantly impacted by the political unrest and demonstrations. The publication of preliminary results for the third quarter in October led the Company to adjust its financial outlook for the full year 2019. In light of a strong increase in sales and earnings in the final quarter, HUGO BOSS ultimately achieved its adjusted full-year targets. Over the course of the year, the consistent execution of its strategy had a particular positive effect on business performance.

In fiscal year 2019, HUGO BOSS thus made significant progress in the execution of its strategic growth drivers. With currency-adjusted sales growth of 35%, sales in the own online business saw strong double-digit growth for the second year in a row. This was due not only to sales growth recorded in the own online store, but also to the intensification of partnerships with online retailers through the concession model. In addition, in 2019 the Company benefited from ongoing strong sales momentum in the important growth market of China. Double-digit sales growth in mainland China more than compensated for a decline in Hong Kong. The Company also made further progress in the continued optimization of its global retail network. Thanks to the consistent renovation of a number of key BOSS stores over the course of the year, approximately 100 of own retail stores were already equipped with the latest store concept by the end of the year. Overall, HUGO BOSS increased its retail sales productivity in brick-and-mortar retail by 4% to EUR 11,100 per sqm in 2019. Thanks to a significant double-digit increase in sales from casualwear, the HUGO brand recorded currency-adjusted growth of 5% over the past year. Consequently, HUGO also made an above-average contribution to the Group’s growth. Group Strategy

Comparison of actual and forecast business performance (in EUR million)



Result 2018


Original forecast 20191


Adjusted forecast in October 20191


Result 20191


Excluding the impact of IFRS 16.



Group sales




Increase at a mid-single-digit percentage rate2


Increase at a low single-digit percentage rate2


Increase by 2%2 to EUR 2,884 million

Gross profit margin




Increase of up to 50 basis points


Largely stable development


Decrease by 20 basis points to 65.0%





Increase at a high single-digit percentage rate


Decrease to an amount of between EUR 330 million and EUR 340 million


Decrease by 4% to EUR 333 million

Group's net income




Increase at a high single-digit percentage rate


Decrease at a mid- to high single-digit percentage rate


Decrease by 10% to EUR 212 million

Capital expenditure




EUR 170 million to EUR 190 million


EUR 180 million to EUR 190 million


EUR 192 million

Free cash flow




EUR 210 million to EUR 260 million


EUR 160 million to EUR 180 million


EUR 207 million

With an increase of 2% on a currency-adjusted basis to EUR 2,884 million, Group sales for fiscal year 2019 were within the adjusted forecast range. Initially, the Company had anticipated a currency-adjusted increase in Group sales at a mid-single-digit percentage rate. While sales in Europe and Asia/Pacific grew, business in the Americas fell short of expectations as a result of the persistently difficult market environment in the U.S. and in Canada. Earnings Development, Sales Performance

At 65.0%, the gross profit margin was 20 basis points below the prior year level and thus at the lower end of the adjusted forecast range. Besides higher markdowns, in particular in North America, currency effects had a negative impact on the gross profit margin. This was only partially compensated by positive effects from the growing share of sales of the Group’s own retail business. Excluding the effects of IFRS 16, the operating profit (EBIT) in fiscal year 2019 decreased 4% to EUR 333 million. EBIT was therefore within the adjusted forecast range, but lower than originally expected. In addition to the lower gross profit margin, an increase in operating expenses contributed to the decline compared to the prior year. The increase in operating expenses is mainly attributable to additional investments in the Group’s own retail business. Excluding the effects of IFRS 16, the Group’s net income was 10% below the prior year level, hence at the lower end of the adjusted forecast range. The Company had originally expected to be able to achieve a high single-digit increase in its EBIT and net income in 2019. Earnings Development, Income Statement

At EUR 192 million, capital expenditure in 2019 was slightly higher than the original forecast range of EUR 170 million to EUR 190 million. The majority of capital expenditure was related to the further optimization and modernization of the Group’s retail store network. At EUR 207 million, free cash flow was 22% higher than in fiscal year 2019 and thus at the lower end of the original forecast range of EUR 210 million to EUR 260 million (excluding the effects of IFRS 16). The increase is largely attributable to improvements in trade net working capital.Net Assets Financial Position

The targets for fiscal year 2020 are presented in the Outlook section. Outlook