Sales and Earnings Development of the Business Segments

EMEA

Sales in the EMEA region (Europe, Middle East, and Africa) were up 13% currency-adjusted in fiscal year 2023. This performance was driven by the successful execution of “CLAIM 5” that propelled brand momentum for both BOSS and HUGO, thereby supporting local demand in particular. In addition, business with international tourists picked up noticeably during the course of the year. All channels contributed to growth, with the Group’s brick-and-mortar retail business posting high single-digit revenue improvements while brick-and-mortar wholesale was up double-digit. At the same time, the Group’s digital business continued its double-digit growth trajectory.

Momentum was particularly strong in key European markets as well as in Emerging Markets. Germany posted double-digit revenues increases reflecting broad-based growth across all channels. Sales particularly in France also recorded double-digit growth, with all channels contributing to growth. Being up against a particularly strong comparison base from the prior year, revenues in the UK remained slightly below the prior-year levels. This development also reflects the overall increasingly challenging market environment, which led to a softening in local consumer sentiment. At the same time, momentum in Emerging Markets, including Eastern Europe and the Middle East, remained strong throughout 2023, as reflected by significant double-digit improvements compared to the prior-year level.

At EUR 586 million, segment earnings in EMEA came in 7% above the prior-year level (2022: EUR 548 million), corresponding to an EBIT margin of 22.9% (2022: 23.8%). Improvements in sales were more than offset by a modest decline in gross margin and higher operating expenses, reflecting a step-up in marketing investments, as well as higher variable rental, fulfillment, and administration expenses. Notes to the Consolidated Financial Statements, Note 24

Americas

In the Americas, currency-adjusted revenues increased by 23% in 2023. This performance first and foremost reflects the improved perception of BOSS and HUGO following the successful implementation of the 24/7 brand images as part of our “CLAIM 5” strategy, especially in the important U.S. market. Both brands successfully expanded their visibility at key department stores, leading to further market share gains in fiscal year 2023. From a channel perspective, regional growth was broad-based as reflected by double-digit revenue improvements in brick-and-mortar retail, brick-and-mortar wholesale, and our digital business.

Momentum was fueled by double-digit growth across all markets. In the United States, the largest market for HUGO BOSS, the development was driven by robust double-digit growth across all consumer touchpoints. While trends were similar in Canada, HUGO BOSS continued to record particularly strong momentum in Latin America, also reflecting broad-based growth across all channels.

Segment earnings in the Americas amounted to EUR 157 million in fiscal year 2023 (2022: EUR 123 million), corresponding to an EBIT margin increase of 80 basis points to a level of 16.4% (2022: 15.6%). In addition to strong sales improvements, this development was supported by a robust increase in gross margin. Notes to the Consolidated Financial Statements, Note 24

Asia/Pacific

Revenues in Asia/Pacific significantly accelerated in fiscal year 2023, expanding 32% on a currency-adjusted basis. This development was driven by a strong performance in Southeast Asia & Pacific as well as a noticeable recovery of our business in China following the market’s reopening in early 2023. All three channels, brick-and-mortar retail, brick-and-mortar wholesale, as well as digital, posted double-digit sales increases.

In the wake of the market’s reopening following the abandonment of COVID-related restrictions in early 2023, our business in China recorded a noticeable recovery, leading to strong double-digit sales improvements in 2023. This performance was driven by broad-based growth across all consumer touchpoints. In addition to a significant improvement in mainland China, business in Hong Kong and Macau has picked up strongly, reflecting a gradual recovery in tourism. At the same time, also Southeast Asia & Pacific posted robust double-digit sales improvements in fiscal year 2023, including strong double-digit growth in Japan.

Segment earnings in the Asia/Pacific region amounted to EUR 124 million, 68% above the prior-year level (2022: EUR 74 million), translating into an EBIT margin increase of 570 basis points to a level of 21.5% (2022: 15.8%). The strong top-line performances enabled us to generate significant operating leverage, thereby more than offsetting a slight decline in gross margin. Notes to the Consolidated Financial Statements, Note 24

Licenses

Sales in our license business increased by 13% currency-adjusted compared to the prior year. This performance was fueled by strong double-digit growth in the important fragrance business, also reflecting the strong uptick in international tourism driving revenues in travel retail. In addition, the Company extended its 24/7 lifestyle offering also as part of its global license business, thereby selectively expanding into lifestyle areas such as equestrian or cycling, which further spurred momentum in fiscal year 2023. Earnings Development, Sales by Distribution Channel

At EUR 88 million, license segment earnings increased 15% compared to the prior year (2022: EUR 77 million). Notes to the Consolidated Financial Statements, Note 24

Five-year overview of business segments