Sales and earnings development of the business segments

Europe

In Europe, including the Middle East and Africa, currency-adjusted sales were 41% above the prior-year level. While the impact of COVID-19 still weighed noticeably on business performance, particularly at the beginning of the year, consumer sentiment improved significantly as the year progressed. In particular, local demand picked up significantly. On a two-year-stack basis, sales remained only 2% below 2019 levels, although on average around 20% of the Group’s own retail stores were affected by temporary closures.

HUGO BOSS recorded significant double-digit growth across all distribution channels compared to the prior year, with the Company’s digital business developing particularly strong. Compared to pre-pandemic levels, digital sales recorded significant double-digit improvements. At the same time, sales in both, brick-and-mortar retail as well as brick-and-mortar wholesale, remained below pre-pandemic levels, reflecting long-lasting pandemic-related restrictions , which weighed on the sales performance, in particular in the first half of the year.

All core markets in Europe, including Germany, Great Britain, France, and the Benelux countries, recorded low to mid-double-digit sales growth in fiscal year 2021, driven by strong local demand. At the same time, HUGO BOSS recorded a noticeable business recovery in the markets of southern Europe, which were particularly affected by sales declines in the prior year due to their comparatively high dependence on tourism. In addition, the Company achieved high double-digit sales increases in growth markets such as Russia and the United Arab Emirates, with growth rates well above 2019 levels.

Driven by the significant sales improvements in fiscal year 2021, segment profit in Europe quadrupled to EUR 347 million (2020: EUR 87 million). This corresponds to an EBIT margin of 19.9% (2020: 7.1%). Notes to the Consolidated Financial Statements, Note 24

Americas

In the Americas, HUGO BOSS recorded a particularly strong business recovery in fiscal year 2021. Growth was driven by strong improvements in consumer sentiment and very robust local demand post lockdowns. At the same time, HUGO BOSS made significant progress in expanding its casualwear offerings and thereby strengthening its product range at the point of sale, particularly in the important U.S. market. Successful collaborations with Russell Athletic and the NBA, which were particularly well received by younger customers, also contributed to this. In total, the Company thus succeeded to return to growth only one year after the pandemic-related decline in revenues. Compared to 2020, currency-adjusted sales growth totaled 78%, which corresponds to a currency-adjusted increase of 4% on a two-year-stack basis.

Growth in the Americas was driven by a strong uplift in brick-and-mortar retail. Besides overall robust local demand and the strengthening of the product offerings, the expansion of the Company’s shop-in-shop network at key U.S. retail partners also contributed growth. While revenues in brick-and-mortar wholesale also strongly recovered, the Company’s digital business recorded significant double-digit growth.

Thanks to high double-digit growth, the overall business in the U.S. almost fully recovered from the sales declines recorded in the prior year, thus returning to pre-pandemic levels. Canada and Latin America also recorded significant sales growth compared to the prior year. While business in Canada remained slightly below pre-pandemic levels due to long-lasting lockdowns and store closures, business in Latin America returned to strong sales growth as compared to 2019.

In light of the noticeable business recovery, segment profit in the Americas amounted to EUR 61 million, reflecting a strong increase as compared to the prior year (2020: minus EUR 97 million). This corresponds to an EBIT margin of 11.3% (2020: minus 31.6%). Notes to the Consolidated Financial Statements, Note 24

Asia/Pacific

Also in Asia/Pacific, HUGO BOSS was able to further accelerate its business recovery in 2021, as reflected by currency-adjusted sales growth of 22%. The upward trend was particularly strong in the first half of the year. However, with the start of the second half, renewed pandemic-related restrictions in various markets, including temporary store closures, weighed on consumer sentiment. Consequently, for the full year, currency-adjusted sales remained 3% below pre-pandemic levels.

While all distribution channels recorded double-digit sales improvements, the Company’s digital business performed particularly well. On a two-year-stack basis, digital sales of HUGO BOSS even tripled, driven by strong growth on relevant multi-brand platforms.

While HUGO BOSS continued to experience strong momentum in mainland China in the first half of the year, further pandemic-related restrictions weighed on consumer sentiment in the following months. In light of very robust local demand, HUGO BOSS recorded currency-adjusted growth of 18% in full year 2021, representing an increase of 24% as compared to 2019. Other markets in the region, including Japan, Oceania, and Southeast Asia, also recorded double-digit sales growth in 2021, while remaining below pre-pandemic levels due to persistent pandemic-related restrictions as well as the ongoing noticeable decline in tourism.

Segment profit in the Asia/Pacific region totaled EUR 74 million in 2021 (2020: EUR 32 million). The corresponding EBIT margin thus came to 17.4% (2020: 9.3%). Also here, the strong profitability improvements were driven by significant sales growth recorded in the past fiscal year. Notes to the Consolidated Financial Statements, Note 24

Licenses

Sales in the license business increased by 20% currency-adjusted compared to the prior year, reflecting double-digit growth across all major product groups, including fragrances, eyewear, and watches. On a two-year-stack basis, currency-adjusted sales remained 8% below 2019 levels as the lack of international travel continued to weigh on revenues in travel retail in 2021. Earnings Development, Sales by Distribution Channel

At EUR 63 million, license segment profit increased 17% compared to the prior year (2020: EUR 54 million). Notes to the Consolidated Financial Statements, Note 24