Hugo Boss AG (ETR:BOSSn) says its annual operating profit will be higher than expected. This is because the German fashion house overcame a drop in Chinese demand caused by COVID to have its first-ever quarterly sales of more than €1 billion ($1.0833).
In preliminary results released on Tuesday, the company based in Metzingen said that its earnings before interest and taxes for its fiscal year 2022 will go up by 47% to €335 million, which is more than its previous forecast of between €310 million and €330 million. The number was put at €327.1 million by most estimates on Bloomberg.
Hugo Boss said that the fourth quarter was a big part of this bottom-line beat, with the last three months adding €104 million to the returns. In 2021, the EBIT margin is expected to go from 8.2% to 9.2%.
On a reporting currency basis, quarterly sales jumped 18% year over year to €1.07B. The company said this was because of a new marketing initiative that helped drive shoppers to its BOSS athletic wear and HUGO progressive fashion brands.
Hugo Boss said in a statement, “The new and strong brand image of BOSS and HUGO drove brand momentum throughout the year, leading to strong sell-through rates and allowing both brands to successfully grow their market share around the world.”
Sales growth was strong in both the U.S. and Europe. Europe’s currency-adjusted sales went up 18% thanks to strong sales in the U.K., France, and Germany. But this was partly cancelled out by a 3% drop in the Asia/Pacific region, where demand was hurt by strict COVID-19 restrictions in China that led to temporary store closures.
On March 9, the group will release its final results for the year 2022 and its plans for the next fiscal year.