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2023 was a record year for Hugo Boss: the German fashion brand sees this as confirmation of its new strategy, which focuses mainly on profit growth.
Right strategy
Hugo Boss performed solidly in 2023: its sales climbed 18 % to the record level of 4.2 billion euros. Even more strikingly, operating profit even rose 22 % to 410 million euros (ensuring a margin of 9.8 %).
Both the Boss and Hugo branches gained market share, allowing the German fashion group to revise its sales and profit targets upwards twice in 2023. CEO Daniel Grieder sees it as confirmation that its CLAIM 5 strategy, now in its second year, is the right one. However, his comments serve mainly to reassure analysts and shareholders, who were disappointed with the high cost of growth last quarter.
Slowdown in sales
Despite the excellent results, the company warns of weak consumer confidence, which could delay its five-billion-euro revenue target. For 2024, the fashion group is now counting on sales growth between 3 and 6 %, with operating profit rising 5 to 15 %. The profit margin should also improve to a level between 10.0 and 10.7 %. Hugo Boss maintains its EBIT target of at least 12 % for 2025.
This year, both Boss and Hugo will continue rolling out their latest store concepts, which has been already completed in around 200 stores. In addition, the retailer plans to invest in digitisation and artificial intelligence for purchasing, production and logistics operations. This should allow the company to raise its market share even further in 2024.
