From WWD Issue 07/15/2011
Expansion of its retail activities and substantial growth in the U.S. and China allowed Hugo Boss AG to more than quintuple its second-quarter profits and lift its guidance for the full year.
In the three months ended June 30, the Metzingen, Germany-based apparel firm registered net income of 31 million euros, or $44.6 million, versus 6 million euros, or $7.7 million, during the corresponding 2010 quarter. Earnings before interest, taxes, depreciation, amortization and special items more than doubled to 63 million euros, or $90.6 million, from 31 million euros, or $39.5 million.
Sales expanded 24.6 percent to 405 million euros, or $582.6 million, from 325 million euros, or $414.6 million.
Dollar figures have been calculated at average exchange for the periods to which they refer.
“The positive development was due primarily to the comp-store sales growth in the group’s own retail business and the expansion of the group’s own retail activities,” the company said. “The most significant increase in sales was posted in China and in the U.S. market.”
Among the company’s U.S. initiatives during the second quarter was the redesign of the its Hugo store in SoHo in May.
The second-quarter results prompted the company to increase its expectations for 2012, raising its anticipated increase in sales, after adjustment for currency fluctuation, to an increase of 15 to 17 percent, versus its earlier estimate of a 12 percent gain, and its forecast for EBITDA before special items to 25 to 30 percent, from at least 15 percent.
Net income for the first half rose 54.8 percent to 113 million euros, or $162.6 million, from 73 million euros, or $102.4 million, while EBITDA excluding special items was up 58.5 percent to 195 million euros, or $280.6 million, from 123 million euros, or $172.5 million. Sales rose 22.9 percent to 945 million euros, or $1.36 billion, from 769 million euros, or $1.08 billion.
The company said it plans to discuss results for the quarter and a half and its outlook for the year during a presentation July 28.
Shares of Hugo Boss fell 1.1 percent to 69.60 euros, or $100.15, in trading in Frankfurt Thursday.