For a while it looked like Hugo Boss‘ extravagant marketing spend, star-studded celebrity campaigns and improved product lines were going to allow the German menswear specialist to reach its stated goal of generating 5 billion euros in sales by 2025. But a somewhat moribund 2024 and the likelihood of a much more volatile year to come has ended that ambition for the time being.
In 2024, Hugo Boss reported growth of 3 percent, in currency adjusted terms, and sales of 4.31 billion. The positive full-year results came on top of a slightly more robust fourth quarter, which saw Hugo Boss sales rise 6 percent to hit 1.25 billion euros. But otherwise over the year, sales had been lackluster.
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During an online press conference reporting 2024 results in Germany on Thursday morning, Hugo Boss chief executive officer Daniel Grieder didn’t quite concede defeat, calling 2024’s results a “milestone” on the journey toward the 5 billion euro objective.
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Grieder set the goal as part of a strategy he implemented at Hugo Boss in 2021, when he took on the top job. Over 2022 and 2023, when Grieder’s “Claim 5” strategy and increased marketing spend really started to impact, Hugo Boss’ real growth rocketed up, averaging around 20 percent a quarter over the two years. That made the 5 billion target realistic. But in 2024, Hugo Boss was forced to lower guidance and executives conceded they wouldn’t get to the 5 billion in 2025.
On Thursday morning, Grieder remained upbeat. “Let’s be clear, we really remain confident that the 5 billion is absolutely doable,” he told journalists. “With all we have invested in the brand in the past three years…we are absolutely convinced that we have in place all the ingredients to get to this 5 billion.”
The target is only delayed, he argued. But when pushed as to how long a delay, Grieder said, “We are confident we will reach it. But on the timing, we just keep it open.”
In reality, even if the company continued to grow at 2024’s rate — something guidance for the coming year suggests won’t happen — it would still take Hugo Boss at least five or six more years to reach 5 billion euros in sales.
The German company expects 2025 to be another tough year, “marked by ongoing macroeconomic and geopolitical volatility,” and executives noted that the start of the year had already seen uncertain consumers limit their spending.
As a result Hugo Boss issued guidance slightly below market consensus. Group sales in 2025 are now expected somewhere between a fall of 2 percent and an increase of 2 percent, with final sales sitting between 4.2 billion and 4.4 billion euros.
Hugo Boss predicts EBIT — earnings before income and taxes — to improve in 2025 though, increasing somewhere between 5 percent and 22 percent, to between 380 million euros and 440 million euros. In 2024, Hugo Boss’ EBIT fell 12 percent and equaled 361 million euros.
“In response to the growing external challenges and industry headwinds we adjusted our game plan,” Grieder said. The plan now is to focus on deepening customer relationships with measures like Hugo Boss’ loyalty program, which has grown to 10 million members.
It also involves a “strong commitment to protecting profitability … placing emphasis on increasing cost efficiency across all business areas,” Grieder said, although at this point in time does not involve any staff layoffs.
Hugo Boss’ chief financial officer Yves Mueller went into more tangible detail on what cost efficiencies might entail. The company’s use of air freight is still too high, Mueller explained, and the business is working on getting suppliers to adjust their ordering and shift to sea freight.
“We are constantly improving this but it takes some time,” he noted. “In terms of costs this has tremendous effect. Because a decrease of 1 percentage point in airfreight is worth around 500 million euros in terms of cost margins savings.”
Another cost-saving measure involves shared service centers. Currently Hugo Boss is consolidating New York personnel into its Mexico operation, which will then provide back office functions for the whole of the Americas region, Mueller said.
The company has also been working on ensuring that its supply chains are prepared to deal with any tariffs or trade war, Mueller continued. Over the last three years, sourcing out of China has decreased from somewhere in the mid-teens as a percentage of the company’s global supply to below 5 percent, he explained.
“So we see ourselves as well prepared. On the other side, this whole tariff discussion creates a lot of uncertainty,” he argued. And “where we have a lot of uncertainties around the world, this had direct effect on consumer sentiment.”
In 2024, Hugo Boss saw the most growth in the Americas, with sales there rising 8 percent. This reflected high-single-digit growth in the U.S. market, which Hugo Boss has put special focus on and which makes up around 24 percent of sales in the Americas. But in 2025, the company only expects low-single digit growth in the Americas.
Sales in the group’s home market, EMEA — Europe, the Middle East and Africa — grew 3 percent, “driven by sales improvements in Germany and double-digit growth in emerging markets,” the company explained in a statement. This result is likely to be similar in 2025.
Meanwhile revenues in Asia-Pacific shrank 2 percent, mainly due to muted consumer demand in China, the company said. Hugo Boss expects China to continue to be a challenging market in 2025 too, Grieder added, and moderate declines are expected to continue in Asia-Pacific in 2025.
In 2024, in terms of product categories, the more casual and smaller Hugo line, which includes a new denim offering, grew most, with sales rising 5 percent. The company’s mainstay, the more formal Boss menswear line, rose 3 percent and brought in 3.33 billion euros. Boss womenswear also grew 3 percent.
Grieder sees womenswear as having huge potential for the group. “But we need to be careful … it’s something you need to build carefully,” he explained of the still-small size of this segment, which brought in 297 million euros last year.
Market analysts from the likes of Baader Bank, Goldman Sachs, Deutsche Bank and UBS said Hugo Boss’ numbers for 2024 roughly met their expectations. They agreed that the change in focus was appropriate and the company was right to be cautious about its outlook for 2025.