BERLIN — Deteriorating market conditions put the brakes on Hugo Boss’ growth momentum in 2014, with consolidated net income for the year inching up 1 percent.
In final figures released Thursday, Boss reported consolidated net income of 334.5 million euros, or $444.6 million. As previously reported, operating profit rose 5 percent to 590.8 million euros, or $785.3 million, with group sales gaining 6 percent to reach 2.57 billion euros, or $3.42 billion.
Despite a slower rate of growth, as the German group pointed out, Boss still achieved record sales and earnings in 2014. All dollar figures are converted from the euro at average exchange rates for the period to which they refer.
Related Articles
At the end of trading Thursday on Xetra, the electronic platform of the Frankfurt Stock Exchange, Boss shares were down 1.68 percent to 117.05 euros, or $127.58 at current exchange.
You May Also Like
For the year ahead, Boss said that although challenging market conditions will continue, the group expects to book mid-single-digit gains in currency-adjusted group sales, supported by all regions.
Own retail sales are expected to outpace group growth, with ongoing gains in retail comp store sales. Fifty new stores are slated to open in 2015, with additional takeovers planned. Boss is forecasting a 5 to 7 percent increase in earnings before interest, taxes, depreciation and amortization before special items.
Chief executive officer Claus-Dietrich Lahrs said Boss would be “expanding our market position in the luxury and women’s wear segments and reinforcing our own retail business by offering omnichannel services.…Looking ahead over the next few years, Hugo Boss faces excellent prospects for growth.”
The group’s own retail business was the main growth driver in 2014. The Boss retail network, which grew by 31 doors to 1,041 units in 2014, boosted sales 12 percent, with currency-adjusted comp-store sales up 3 percent. Retail sales now generate 57 percent of group sales, up from 54 percent in 2013 and 40 percent in 2010. The Boss wholesale business, on the other hand, slipped 2 percent.
The Boss women’s wear business also made strong gains, with sales advancing 10 percent to 289 million euros, or $384.2 million. The group noted that under artistic director Jason Wu, Boss women’s wear grew by as much as 18 percent compared with 2013. In total, women’s wear constitutes 11 percent of total Boss sales, on par with 2013. The group has said it expects women’s wear to contribute at least 15 percent of total sales by 2020, which analysts at HSBC said is “realistic.”
The managing and supervisory board are proposing an 8 percent increase in the dividend to 3.62 euros, or $3.84 at current exchange.