In the Americas, growth in local currencies picked up pace compared to the previous quarter to reach 7 percent. Adjusted for currency effects, sales in Asia were up 2 percent on the previous year. The Group managed to step up its growth pace in the second quarter compared to the first three months of the year. Against this backdrop, Management reconfirms its sales and profit targets for the full year.
“Our consistently strong growth in Europe and our upturn in the Americas form the basis of these very solid quarterly results,” said Claus-Dietrich Lahrs, CEO and Chairman of the Managing Board of Hugo Boss, adding, “Despite the persistently difficult environment in some key markets, we will grow even faster in the second half of the year, particularly in terms of earnings. We will expand our presence and brand strength in womenswear so as to secure long-term, profitable growth following on from this year's double-digit sales increases.”
Revenues in wholesale distribution channel were 6 percent below the prior-year level on a currency-adjusted basis. Currency-neutral sales in the Group's own retail business (including outlets and online business), in contrast, rose by 17 percent. On a comp store basis, currency-adjusted revenue growth in this channel came to 4 percent.
Gross profit margin increased by 150 basis points to 66.7 percent leading to EBITDA before special items showing a stronger increase than sales, rising by 8 percent. The adjusted EBITDA margin thus expanded by 60 basis points to 19.7 percent in the second quarter.
In the first half of the fiscal year, there was growth in all regions. Europe was the strongest region with a currency-adjusted sales increase of 9 percent. Sales in the Americas rose by 3 percent in local currencies despite a persistently challenging market environment in the apparel retail sector. In Asia, first-half sales were up 4 percent on the prior year after adjustment for currency effects. Solid growth, particularly in Australia and Japan, more than compensated for a more muted development in China.
The Group’s wholesale revenues declined by 6 percent in local currencies. In contrast, the Group's own retail business (including outlets and online business) grew by 18 percent before currency effects in the first half. Currency-adjusted comp store sales were up 5 percent on the prior year. The number of own retail stores saw a net expansion of 18 in the first six months, rising to 1,028 sites. In addition to 37 new openings, 14 stores previously operated by wholesale partners were taken over. 33 smaller-sized stores and shop-in-shops were closed.
For 2014, 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. Company is planning to open around 50 new stores.