First quarter sales at Hugo Boss decreased 16 percent overall to 555 million euros (605 million dollars), corresponding to a currency-adjusted decline of 17 percent. The company said in a statement that after a very encouraging start to the New Year, the global spread of the coronavirus led to a significant impact on the business. The double-digit sales decline significantly weighed on earnings with EBIT amounting to minus 14 million euros (15.2 million dollars) compared to 57 million euros in the same quarter of 2019.
“The Covid-19 pandemic is an unprecedented exceptional situation for our company too,” said Mark Langer, Chief Executive Officer of Hugo Boss AG, adding, “We have done our utmost to ensure the financial flexibility and stability of our company. I am absolutely convinced that together we will safely navigate Hugo Boss through this unusual time.”
Hugo Boss posts 31 percent sales drop in Asia-Pacific region
In the Asia/Pacific region, the effects began to be noticeable from late January, and currency-adjusted sales were down by a total of 31 percent in the first quarter. The company added that decline in currency-adjusted sales in Europe and the Americas was less pronounced at 14 percent and 17 percent, respectively.
The company further said that while the vast majority of the company-owned store network was affected by temporary closures in the first quarter, the group’s own online business saw currency-adjusted growth of 39 percent. In total, retail sales decreased 17 percent in the first quarter, while wholesale revenues declined 18 percent.
Unlike in Europe and the Americas, where business is still significantly impacted as a result of the pandemic and the continuing closures of points-of-sale, Hugo Boss is currently seeing steady improvements in mainland China. The company said, since the end of March all Hugo Boss retail stores and shop-in-shops have been reopened over there, and the sales achieved in April were around 15 percent to 20 percent below the prior year level.
Hugo Boss anticipates 50 percent decline in Q2 sales
The company further said that temporary closure of a large number of stores of Hugo Boss will weigh on the group’s sales and earnings development for the full year. Hugo Boss expects both sales and earnings declines in the second quarter of 2020 to be more pronounced than those recorded in the first quarter due to the continuing closures of the group’s own stores as well as points-of sale at important partners in Europe and the Americas. Overall, these two regions combined usually contribute around 85 percent to group sales. In total, the company expects currency-adjusted group sales to decrease by at least 50 percent in the second quarter.