Hugo Boss : Financial Reports 2024 Quarterly Statement Q1 2024

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

HUGO BOSS RECORDS FURTHER TOP- AND BOTTOM-LINE IMPROVEMENTS IN Q1 AND CONFIRMS FULL-YEAR OUTLOOK

• Group sales in Q1 increase 5% to EUR 1,014 million; up 6% currency-adjusted
• Both brands, all regions, and all channels contribute to sales growth
• EBIT grows 6% to EUR 69 million; EBIT margin up 10 basis points
• Inventories decline by 2%, resulting in a free cash flow of plus EUR 13 million
• Top- and bottom-line outlook for full-year 2024 confirmed

I am pleased that we delivered further sales and earnings improvements also in the first

says Daniel Grieder, Chief Executive Officer of HUGO BOSS	In a volatile
market environment, we remain focused on rigorously executing	, capi-

talizing on our numerous growth opportunities. By leveraging our strong business platform, we remain equally committed to realizing further efficiencies. All of this will enable us to continue our profitable growth trajectory also

In the first quarter of 2024, HUGO BOSS recorded further top- and bottom-line improvements amid a challenging macroeconomic and geopolitical backdrop. This development primarily

, with a particular focus on leveraging important growth opportunities, while at the same time, enhancing effectiveness and efficiency. Consequently, Group sales in the three-month period amounted to EUR 1,014 million (Q1 2023: EUR 968 million). This represents an increase of 6% currency- adjusted, with revenue improvements across both brands, all regions, and all distribution channels. In Group currency, revenues expanded by 5%. At the same time, EBIT grew by 6% to EUR 69 million (Q1 2023: EUR 65 million), implying an EBIT margin expansion of 10 basis points to a level of 6.8% (Q1 2023: 6.7%).

Brand and product initiatives drive growth for BOSS and HUGO

Both BOSS and HUGO recorded robust demand in the first quarter, driven by the successful

also includes the launch of the latest Spring/Summer 2024 collections, which have once again been well received among consumers and wholesale partners alike. Two accompanying brand campaigns, innovative marketing activations around the globe, and impactful

HUGO BOSS AG

Holy-Allee 3, 72555 Metzingen, Germany

Phone [phone]

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

Page 2

collaborations further fueled brand relevance in the three-month period. Altogether, these initiatives supported further revenue improvements across both brands. Currency-adjusted sales for BOSS Menswear were up 5%, while revenues at BOSS Womenswear increased by 7% during the first three months of the year. At HUGO, currency-adjusted sales grew by 9%, supported by the successful launch of its new, denim-focused brand line HUGO BLUE.

Revenue improvements across all regions

All regions recorded further sales growth in the three-month period. In EMEA, currency- adjusted revenues increased by 5%, mainly reflecting robust sales improvements in Germany as well as a double-digit plus in emerging markets. In the Americas, revenues were up 11% currency-adjusted with all key markets contributing to growth. This also includes a double- digit uptick in the important U.S. market. Sales in Asia/Pacific were up 4% currency-adjusted in the first quarter. While Southeast Asia & Pacific once again posted double-digit growth, sales in China remained below the prior-year level, reflecting overall muted local demand.

All channels record further sales growth in Q1

From a channel perspective, all consumer touchpoints contributed to growth in the first

quarter. T-digit growth trajectory with currency-adjusted sales up 10%, reflecting improvements at hugoboss.com as well as an increase in digital sales generated with partners. At the same time, revenues in brick-and-mortar retail business grew by 3% currency-adjusted, reflecting both further store productivity improvements as well as moderate space expansion over the past twelve months. Currency-adjusted sales in brick-and-mortar wholesale expanded by 8%,

emphasizing robust demand for the Spring/Summer 2024 collections. This, in turn, enabled both BOSS and HUGO to further improve visibility and penetration at key department stores.

EBIT up 6% despite further investments into the business

In the first quarter of 2024, HUGO BOSS generated an operating profit (EBIT) of

EUR 69 million, 6% above the prior-year level (Q1 2023: EUR 65 million). As a result, the

Group's EBIT margin increased by 10 basis points to a level of 6.8% (Q1 2023: 6.7%). This performance was supported by a stable gross margin development as well as slight operating expense leverage.

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

Page 3

Decline in inventories supports free cash flow generation

As a result of the measures implemented over the course of 2023 to optimize its inventory levels, HUGO BOSS recorded a further gradual normalization. Year over year, inventories declined by 2% currency-adjusted to a level of EUR 1,034 million (March 31, 2023: EUR 1,065 million). Consequently, at 24.4%, inventories as a percentage of Group sales came in well below the prior-year level, while also further improving compared to the end of fiscal year 2023 (March 31, 2023: 27.7%; December 31, 2023: 25.4%). This, in turn, supported free cash flow generation, amounting to plus EUR 13 million in the first quarter (Q1 2023: minus EUR 120 million).

HUGO BOSS confirms outlook for full-year 2024

Against the, HUGO BOSS confirms its top- and bottom-line outlook for the current fiscal year. The Company remains vigilant with regard to the persistently high levels of macroeconomic and geopolitical uncertainty, which are expected to continue weighing on global consumer sentiment in fiscal year 2024. Accordingly, HUGO BOSS continues to expect Group sales in the reporting currency to increase within a range of 3% to 6% in 2024 to a level of around EUR 4.30 billion to EUR 4.45 billion (2023: EUR 4.2 billion). This includes the expectation of currencies having a

-line development. At the same time, the

Company continues to anticipate EBIT to grow between 5% and 15% to a level of around EUR 430 million to EUR 475 million in 2024 (2023: EUR 410 million). Consequently, the EBIT margin is forecast to increase to a level of between 10.0% and 10.7% (2023: 9.8%).

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

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Q1 sales development by brand

• Both BOSS and HUGO recorded robust demand in the first quarter, driven by the success-
  ful This also includes the launch of the latest Spring/Summer 2024 collections, which have once again been well received among consumers and wholesale partners alike. Two accompanying brand campaigns, innovative marketing activations around the globe, and impactful collaborations further fueled brand relevance in the three-month period. Consequently, HUGO BOSS posted robust sales improvements across brands. Momentum
  was broad-based across all wearing occasions, reflecting approach.
• • Currency-adjustedrevenues for BOSS Menswear were up 5% on the prior-year level, while sales for BOSS Womenswear increased by 7% in the first quarter of 2024.
  • At HUGO, currency-adjusted sales grew 9% year over year, supported by the successful launch of its new brand line HUGO BLUE at the end of February, aimed at further seizing business opportunities in denimwear.

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

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Q1 sales development by segment

• In EMEA, currency-adjusted revenues increased by 5% with the performance varying across key European markets. While the Company recorded robust sales growth in Germany, revenues in the UK remained below the prior-year level, reflecting an overall softening consumer sentiment. Sales in France remained broadly stable year over year. At the same time, the Company continued to drive double-digit improvements in emerging markets.
• In the Americas region, revenues were up 11% currency-adjusted with all key markets contributing to growth. This first and foremost reflects double-digit sales increases in the important U.S. market, with broad-based growth across all consumer touchpoints. Also in Latin America and Canada, HUGO BOSS maintained its growth trajectory, as reflected by robust sales improvements in both markets.
• Sales in Asia/Pacific were up 4% currency-adjusted in the first three months of 2024. While Southeast Asia & Pacific once again posted double-digit growth, sales in China remained below the prior-year level, reflecting overall muted local demand.
• Sales in the license business increased 3% currency-adjusted, driven by robust improvements in the important fragrance business.

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

Page 6

Q1 sales development by channel

For details by channel and region, please refer to page 15.

• brick-and-mortarretail business (including freestanding stores, shop-in- shops, and outlets) grew by 3% currency-adjusted, reflecting both further store productivity improvements as well as moderate space expansion over the past twelve months. From a regional perspective, the momentum in brick-and-mortar retail was particularly robust in the Americas, while Asia/Pacific also contributed to growth. Brick- and-mortar retail revenues in EMEA remained on par with the prior-year level.
• Currency-adjustedsales in brick-and-mortarwholesale expanded by 8% compared to the prior year, emphasizing wholesale partnersrobust demand for the Spring/Summer

2024 collections. This, in turn, enabled both BOSS and HUGO to further improve visibility and penetration at key European and U.S. department stores. At the same time, growth was supported by the expansion of the

• digital business continued its double-digit growth trajectory also in the first quarter of 2024, with currency-adjusted sales up 10%. This reflects both improvements at
  digital flagship hugoboss.com as well as an increase in digital sales generated with partners.

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

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Q1 earnings development

(in EUR million)
			Jan.-March 2024		Jan.-March 2023		Change in %
Sales			1,014		968		5
Cost of sales			(391)		(374)		(5)
Gross profit			623		594		5
In % of sales			61.4		61.4		0 bp
Operating expenses			(554)		(529)		(5)
In % of sales			(54.6)		(54.6)		10 bp
Thereof selling and marketing expenses			(442)		(414)		(7)
Thereof administration expenses			(112)		(114)		2
Operating result (EBIT)			69		65		6
In % of sales			6.8		6.7		10 bp
Financial result			(12)		(12)		(3)
Earnings before taxes			57		53		7
Income taxes			(16)		(15)		(7)
Net income			41		38		7
Attributable to:
Equity holders of the parent company			38		35		9
Non-controlling interests			3		4		(16)
Earnings per share (in EUR)1			0.55		0.50		9
Tax rate in %			28		28
1 Basic and diluted earnings per share.

• At 61.4%, the gross margin in the first quarter remained on par with the prior-year level. Efficiency gains in sourcing coupled with more favorable product and freight costs provided substantial tailwinds to gross margin development. This, in turn, compensated for adverse channel mix effects, an overall promotional environment, as well as unfavorable currency effects.
• Operating expenses increased by 5% in the first quarter, with higher selling and marketing expenses more than offsetting a slight decrease in administration expenses. As a percentage of sales, however, operating expenses decreased by 10 basis points, as improvements in marketing and organizational effectiveness more than compensated for

further investments into the business

.

• Selling and marketing expenses were up 7% compared to the prior-year period, mainly attributable to an increase in fulfilment, payroll, and variable rental expenses in light of further top-line improvements. Marketing investments, on the other hand,
  came in below 2023 levels, reflecting marketing effectiveness as well as major brand initiatives in the prior-year period. Total marketing investments thus decreased to a level of EUR 77 million (Q1 2023: EUR 90 million), representing 7.5% of Group sales (Q1 2023: 9.3%), in line with the

.Selling expenses for the

-and-mortar retail business were up 12% to EUR 219 million, thus increasing to a level of 21.6% of Group sales (Q1 2023: 20.1%). Overall, as a percentage

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

Page 8

of sales, selling and marketing expenses grew by 70 basis points to a level of 43.6% (Q1 2023: 42.8%).

• • Administration expenses decreased by 2% as compared to the prior-year period, supported by further improvements in organizational effectiveness. As a percentage of sales, administration expenses decreased by 80 basis points to a level of 11.0%
    (Q1 2023: 11.8%).
• Spurred by further top-line improvements, operating profit (EBIT) increased by 6% to EUR 69 million in the first quarter of 2024. Accordingly, the Group's EBIT margin increased by 10 basis points to a level of 6.8%, reflecting both the stable gross margin development

.

• At EUR 12 million, net financial expenses (financial result) remained virtually unchanged compared to the prior-year level. Higher interest expenses were largely offset by more favorable foreign exchange rates in the three-month period.
• Consequently, net income amounted to EUR 41 million, up 7% against the prior-year level. Net income attributable to shareholders increased by 9% to EUR 38 million, resulting in earnings per share of EUR 0.55, also up 9% compared to the prior year.

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

Page 9

Net assets and financial position

1. Change compared to March 31, 2023.
2. Excl. the impact of IFRS 16.

• Trade net working capital (TNWC) increased 14% on a currency-adjusted basis. Lower inventories were more than offset by an increase in trade receivables, mainly attributable

tostrong performance in wholesale. Trade payables, on the other hand, came in below the prior-year level, primarily reflecting lower order volumes as part of the

TNWC

as a percentage of sales based on the last four quarters amounted to 21.2%, thus above the level recorded in the prior-year period (Q1 2023: 16.4%).

• Year over year, inventories were down 2% currency-adjusted, reflecting measures implemented over the course of 2023 to optimize its inventory levels. Conse- quently, at 24.4%, inventories as a percentage of Group sales came in well below the prior-year level, while also further improving compared to the end of fiscal year 2023 (March 31, 2023: 27.7%; December 31, 2023: 25.4%). HUGO BOSS remains confident of reducing inventories to a level below 20% of Group sales by 2025.
• Excluding the impact of IFRS 16, the net financial position of HUGO BOSS totaled minus EUR 269 million at the end of the first quarter of 2024 (March 31, 2023: minus EUR 151 million). Including the impact of IFRS 16, the net financial position totaled minus EUR 1,067 million compared to minus EUR 908 million as of March 31, 2023.

Quarterly Statement for Q1 2024

Metzingen, May 2, 2024

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1 Change compared to Q1 2023.

• Capital expenditure increased by 15% to EUR 47 million in the three-month period
  (Q1 2023: EUR 41 million). The further step-up in capital expenditure aims to support the store network, further digitalizing its business model, and expanding its logistics capacities.
• Free cash flow amounted to plus EUR 13 million (Q1 2023: minus EUR 120 million), supported by the improvements in EBIT and the advancements in optimizing inventory levels.

Network of freestanding retail stores

• As of March 31, 2024, the number of own freestanding retail stores amounted to 490, and thus remained broadly unchanged as compared to December 31, 2023.
• • In the first three months of the year, a total of four BOSS stores were newly opened across all three regions. At the same time, three HUGO stores have been added to the

takeover in Poland.

• On the other hand, six freestanding stores with expiring leases were closed, in particular across EMEA.