Hugo Boss’ revenue dropped by 17% at constant rates, during the first quarter of 2020. Forecasts for the second? Business in China is recovering, while the online segment grows: that being said, forecasts say -50% sales. The group also stated it plans to cut investments by 1/3.
-17% for Hugo Boss in the first quarter
As we were saying, Hugo Boss’ sales for the first quarter of 2020 stopped at 555 million euro, or -16% at current rates and -17% at constant rates. EBIT was negative 14 million euro, against the 57 million euro profits of the same quarter of 2019. The group currently has 75% of its retail points shutdown, and the company states it cannot make accurate estimates over sales and profits for 2020 as a whole, but it warns that the decrease between 2nd quarters 2020 vs. 2019 will be of at least -50%. The brand’s management is sure the situation will improve from the 3rd quarter on.
The good news
Hugo Boss mentions “constant improvements” in China, where stores have reopened. “The results for the month of April in the country were between 15% and 20% lower than the previous year”, reads a group’s publication. Online sales, meanwhile, increased by 39% in the first quarter of 2020, and the initial data for April showcases that the digital channel doubled in comparison to the same period of the previous year.
Hugo Boss announced it will cut the investments’ budget by 1/3 in 2020. Moreover, the group is working with its suppliers to cut the entry of additional stock by lowering the production level demanded. Additionally, the board has suspended the 2019 dividend payment, beside from the legal minimum of 0,04 euro per share.