“Our growth in the third quarter is broad-based, with all regions, distribution channels and brands contributing to it,” said Claus-Dietrich Lahrs, CEO and Chairman of the Managing Board of HUGO BOSS AG, of the publication of the quarterly report. “The results show that we have chosen the right path to achieve our goals for 2015.”
EBITDA before special items up 42% in Q3
In the third quarter of 2010, HUGO BOSS Group sales were up 14% on a currency-neutral basis. In euro terms, the Group posted a sales increase of 19% to EUR 538 million (2009: EUR 450 million). The improvement was supported by double-digit currency-neutral growth in all regions (Europe +12%, America +13%, Asia/Pacific +27%). Wholesale revenues were 6% higher than in the previous year after adjustment for currency effects. Retail sales (including outlets and online) increased by 36% after adjustment for currency effects.
The first-time consolidation of the joint venture with the Rainbow Group in China supported this development. On a like-for-like basis, revenues at directly operated retail stores rose by 15% after adjustment for currency effects. As a result of the growing share of retail sales, a consistent pricing policy and efficiency improvements in production and sourcing activities, the gross profit margin increased by 4.9 percentage points to 59.2% (2009: 54.3%). The rise in the gross profit margin also resulted in an increase of 4.5 percentage points in the EBITDA margin before special items, which amounted to 27.9% (2009: 23.4%).
Gross profit margin improves by 5.4 percentage points after nine months In the first nine months of 2010, HUGO BOSS Group sales were up 2% on a currency-neutral basis. In the reporting currency, revenues increased 6% to EUR 1,307 million (2009: EUR 1,238 million). Europe posted a currency-neutral decline of 2%, whereas sales in America and Asia/Pacific improved by 11% and 16% respectively. While wholesale revenues were down 8% after adjustment for currency effects, retail sales rose 27% in the first nine months. On a like-for-like basis and after adjustment for currency effects, the sales increase at directly operated retail stores amounted to 10%. The gross profit margin grew by 5.4 percentage points to 58.0% (2009: 52.6%). The EBITDA margin before special items rose by 3.1 percentage points to 20.9% (2009: 17.8%).
Considerable decrease in debt
Strict monitoring of net working capital led to a year-on-year improvement of 15% to EUR 265 million (September 30, 2009: EUR 311 million). The net financial position decreased by 34% to EUR 304 million (September 30, 2009: EUR 459 million).
Sales and earnings forecast raised
As third quarter results were considerably better than originally expected, the Group has raised its forecasts for the full year. Management now anticipates a currency-neutral sales increase of 5% for fiscal 2010 (previously: increase between 3% and 5%). As a result of significant improvements in the gross profit margin, operating income (EBITDA before special items) is expected to see stronger growth than sales of approximately 20% (previously: between 10% and 12%).
