“We had a good start to the year,” said Claus-Dietrich Lahrs, CEO and Chairman of the Managing Board of Hugo Boass, adding, “Thanks to a strong development in Europe, we were able to compensate for the challenging market environment, above all in North America and China. At the same time, our strategic focus on Boss Womenswear resulted in double-digit growth rates in this part of our business.”
Given the ongoing challenges in the American apparel retail market, revenues declined by 2 percent after adjustment for currency effects in this region. In Asia, sales growth accelerated to 7 percent in local currencies, above all due to a strong development in Japan and Australia.
First quarter wholesale sales were 6 percent below the prior-year quarter on a currency-adjusted basis. The own retail business (including outlets and online) posted a 19 percent increase in sales in local currencies. Currency-adjusted comp store sales growth in this channel accelerated as compared to previous quarters and reached 6 percent. The total number of directly operated stores at the end of the first quarter stood at 1,007. In addition to 13 new openings, the Metzingen headquartered group took over 12 shop-in-shops previously operated by wholesale partners. 28 points-of-sale were closed.
The group's gross profit margin improved by 360 basis points to reach 65.4 percent. The adjusted EBITDA margin in the first quarter stood at 21.4 percent, 90 basis points below the previous year.
The Management of Hugo Boss confirms the outlook for the year given in March. The company plans to achieve high single-digit sales growth after adjustment for currency effects and thus to post stronger growth than in the previous year. All regions are expected to contribute to the achievement of this goal. The Group is anticipating to achieve double-digit growth in its own retail business once again, while the wholesale channel will remain broadly stable. The operating result (EBITDA before special items) is also expected to post a high single-digit increase. The group is planning to open around 50 new stores excluding takeovers. Due to the expected increase in earnings and continued strong cash flow development, company forecasts a positive net financial position at the end of 2014.