Hugo Boss : Press Release - Full Year Results 2023

Press release on the full year 2023 results

Metzingen, March 7, 2024

2023 MARKS RECORD YEAR FOR HUGO BOSS FURTHER TOP- AND BOTTOM-LINE IMPROVEMENTS TARGETED FOR FISCAL YEAR 2024

Fiscal year 2023

• Currency-adjustedGroup sales increase 18% to record level of EUR 4.2 billion
• EBIT grows 22% to EUR 410 million; EBIT margin up 60 basis points to 9.8%
• Proposed dividend of EUR 1.35 for 2023; +35% compared to prior year

Outlook 2024

• Management continuity ensured with reappointment of Managing Board members
• Sales to grow between 3% and 6% to around EUR 4.30 billion to EUR 4.45 billion
• EBIT to increase by 5% to 15% to around EUR 430 million to EUR 475 million; EBIT margin to improve to a level of between 10.0% and 10.7%

5ambition

• Focus on leveraging business platform to drive efficiencies and profitability
• Sales ambition of EUR 5 billion might be slightly delayed amid weak consumer sentiment
• 2025 EBIT margin target of at least 12% reconfirmed

HUGO BOSS looks back on a successful business performance in fiscal year 2023, marked by strong top- and bottom-line improvements. This development primarily reflects the robust brand momentum of BOSS and HUGO, fueled by the consistent execution of key brand,

trategy. By

continuing their growth trajectories in 2023, both BOSS and HUGO gained further market shares. In doing so, HUGO BOSS achieved its full year 2023 sales and earnings targets, which had been revised upwards twice during the year.

3 was another year of remarkable success forDaniel Grieder,

Chief Executive Officer of HUGO BOSS The second full year of executing

growth strategy was characterized by strong achievements across all business areas and has accelerated the momentum of our two brands BOSS and HUGO. These successes prove that

HUGO BOSS AG

Holy-Allee 3, 72555 Metzingen, Germany

Phone +49 7123/94 0

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 2

HUGO BOSS records strong top- and bottom-line improvements in 2023

As announced in January 2024, Group sales in fiscal year 2023 increased by 18% on a currency-adjusted basis. In Group currency, sales grew by 15% to a record level of

EUR 4,197 million (2022: EUR 3,651 million). For the first time in the history of HUGO BOSS, sales crossed the EUR 4 billion threshold, exceeding its initial mid-term sales target two years ahead of plan. Growth was once again broad-based in nature, with all brands, regions, and distribution channels contributing with double-digit improvements.

At the same time, HUGO BOSS recorded strong bottom-line improvements in 2023, as operating profit (EBIT) increased by 22% to EUR 410 million (2022: EUR 335 million). This development was mainly driven by the top-line performance, which more than offset

additional investments in the business. As a result, the EBIT margin increased by 60 basis points to a level of 9.8% (2022: 9.2%).

Following more than two years of successful strategy execution, HUGO BOSS has laid an important foundation for sustainable and profitable growth. In 2024, the Company will build on the regained strength of BOSS and HUGO and further drive brand relevance. Having successfully anchored its position in consumerminds in recent years, going forward, HUGO BOSS will put even more emphasis on fostering engagement with consumers, aiming to retain their loyalty in the long term. In this context, HUGO BOSS will continue to invest into compelling brand-building initiatives and enhance 24/7 lifestyle images. The recent launch of the BOSS and HUGO Spring/Summer 2024 collections, including the first-time drop of HUGO Blue, thereby marks the next chapter along

.

To foster growth and amplify efficiencies, HUGO BOSS will continue to leverage its high- quality channel mix, ensuring a seamless brand experience and driving synergies across all consumer touchpoints. This also includes the further rollout of the latest BOSS and HUGO store concepts. With more than 200 stores renovated globally, HUGO BOSS has successfully accelerated its omnichannel approach, thus enhancing the shopping experience and increasing store productivity. At the same time, HUGO BOSS will continue to optimize its business operations platform, aimed at driving further effectiveness and efficiencies. As part of this, the Company will put a particular focus on driving digitalization and leveraging the power of artificial intelligence along its global sourcing, production, and logistics activities. Altogether, these strategic initiatives will provide a robust foundation to achieve further top- and bottom-line improvements in the years to come.

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 3

Early reappointment of Managing Board members to ensure business continuity

In order to ensure continuity and long-term business success, the Supervisory Board of HUGO BOSS decided on the long-term composition of the Managing Board, with effect of April 1, 2024. As announced on March 6, Daniel Grieder was reappointed Chairman of the Managing Board and CEO of HUGO BOSS until December 31, 2028. At the same time, Oliver Timm, in addition to his role as CSO of HUGO BOSS, was appointed Deputy CEO. He was already reappointed CSO in March 2023 until December 31, 2026. Also on March 6, Yves Müller was reappointed CFO and COO of HUGO BOSS until December 31, 2027. With the long-term and staggered appointment of all Managing Board members, the Supervisory Board is setting an important course for the future of HUGO BOSS, aimed to ensure the continued successful execution of "CLAIM 5."

HUGO BOSS strives for additional market share gains in 2024 and beyond

In light of its regained brand momentum and unwavering commitment to rigorously executing CLAIM 5,HUGO BOSS is confident of successfully continuing its growth trajectory. In particular, the Company aims to gain further market shares also in the years to come. In this context, in fiscal year 2024, HUGO BOSS expects Group sales in reporting currency to increase within a range of 3% to 6% to a level of around EUR 4.30 billion to EUR 4.45 billion. In doing so, the Company is factoring in the persistently weak consumer confidence, which is currently curbing global retail spending, in particular in distinct European economies. Increasing geopolitical tensions, including the unabated conflicts in Ukraine and the Middle East, pose additional uncertainty in 2024.

Against the backdrop of the ongoing macroeconomic and geopolitical uncertainties, the ales ambition of EUR 5 billion might be slightly delayed. Irrespective of this,

HUGO BOSS continue. Company therefore remains fully committed to exploiting these opportunities in 2024 and beyond be it from a brand, product, distribution, or geographical perspective.

"With 'CLAIM 5,' we have laid an important foundation for sustainable, long-term success," says Daniel Grieder. "We will continue to build on this foundation and capitalize on our numerous growth opportunities, while the macroeconomic and geopolitical backdrop remains uncertain. At the same time, we will further strengthen our operational execution and enhance effectiveness, leveraging our strong business platform to realize significant efficiency gains, while we continue our growth journey."

EBIT margin ambition of at least 12% by 2025 reconfirmed

HUGO BOSS remains all the more confident with regard to its future bottom-line opportunities. The Company continues to target noticeable improvements in profitability, with EBIT expected to grow faster than sales also in the coming years. Accordingly, HUGO BOSS reconfirms its ambition of improving its EBIT margin to a level of at least 12% by 2025. For the

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 4

current fiscal year, the Company expects EBIT to grow between 5% and 15% to a level of around EUR 430 million to EUR 475 million. Consequently, the EBIT margin is forecast to increase to a level of between 10.0% and 10.7% in 2024.

The anticipated improvements in profitability primarily reflect the Comp organizational and operational platform built in recent years, which will enable HUGO BOSS to further strengthen its operational execution and enhance effectiveness, realizing strong efficiency gains going forward. In particular, the Company aims to further optimize its end-to- end operations. This encompasses leveraging its global sourcing activities, in addition to optimizing vendor allocation and freight modes. Altogether, these effects will provide substantial tailwind to the gross margin development in 2024 already, and thus strongly

and 2025. the ongoing commitment to further optimize its operating expense structure. Besides a particular focus on further enhancing cost efficiency in brick-and-mortar retail as well as across headquarter functions, this also includes the overall reduction of collection complexity.

Dividend increase of 35% proposed for fiscal year 2023

-term growth

opportunities, the Managing Board and Supervisory Board intend to propose to the Annual General Meeting on May 14, 2024, a dividend of EUR 1.35 per share for fiscal year 2023. This corresponds to an increase of 35% year over year (2022: EUR 1.00). The proposal is equivalent to a payout ratio of 36

2023 laid

Further information can be found at group.hugoboss.com. This also includes the HUGO BOSS Annual Report 2023,featuring many interactive elements, captivating stories, and dedicated video statements from all three Managing Board members.

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 5

Earnings development for fiscal year 2023

INCOME STATEMENT (in EUR million)

1 Basic and diluted earnings per share.

• Group sales in 2023 increased by 18% currency-adjusted to a record level of EUR 4,197 million. In Group currency, this corresponds to an increase of 15%.
• • In 2023, the collections of BOSS and HUGO have once again been very well received by both customers as well as wholesale partners alike. Thanks to the accompanying global 360° brand campaigns as well as several exciting fashion events, BOSS and HUGO recorded robust momentum throughout the year. With double-digit increases across all wearing occasions, momentum was once again broad-based, fully reflecting both

-adjusted revenues for BOSS Menswear grew 16%, while revenues for BOSS Womenswear even expanded by 24%. At HUGO, currency-adjusted sales were up 22%.

• All regions contributed to growth in 2023, posting double-digit sales improvements. In EMEA, currency-adjusted revenues expanded by 13%, reflecting double-digit growth in key markets such as Germany and France, as well as a particularly strong performance in emerging markets. With revenues up 23% currency-adjusted, momentum in the Americas remained strong throughout 2023, with all key markets posting double-digit

growth, including the important U.S. market. In Asia/Pacific, currency-adjusted revenues grew 32%, reflecting double-digit sales improvements in both China and

Southeast Asia & Pacific.license business increased by 13% currency-adjusted, led by double-digit growth in the important fragrance business.

• Also from a channel perspective, growth in fiscal year 2023 was broad-based with double-digit revenue improvements across all consumer touchpoints. Currency- adjusted sales in brick-and-mortarretail (including freestanding stores, shop-in-shops, and outlets) expanded by 15%, driven by both store productivity improvements, as well

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 6

as additional selling space. The former also reflects the successful execution of various

network, including the rollout of the latest store concepts for BOSS and HUGO. In brick- and-mortarwholesale, currency-adjusted sales grew 18% in 2023. This performance

HUGO collections, which enabled both brands to further improve their visibility and win market shares around the globe. At the same time, growth was supported by the

digital business successfully continued its double-digit growth trajectory, with currency-adjusted sales up 26% reflecting both double-digit revenue increases at hugoboss.com as well as notable improvements in digital revenues generated with partners. Overall, total digital sales thus increased to 19% of Group sales (2022: 18%).

• At 61.5%, the gross margin in fiscal year 2023 came in 30 basis points below the prior-year level. Positive impacts from lower freight cost levels were more than offset by unfavorable currency effects as well as an increasingly promotional environment towards the end
  of 2023.
• Operating expenses grew 13% in fiscal year 2023, reflecting an increase in both selling and marketing expenses as well as higher administration expenses. As a percentage of sales, however, operating expenses decreased 90 basis points to a level of 51.7%, as further efficiency gains, particularly in brick-and-mortar retail, more than offset important

• Selling and marketing expenses increased by 13%, mainly due to an increase in fulfilment, variable rental, and payroll expenses in light of the strong top-line momentum. Besides that, the development is also attributable to higher marketing investments, largely reflecting the successful brand campaigns and fashion events over the course of the year. Total marketing expenses grew 14% to EUR 328 million, representing 7.8% of Group sales (2022: EUR 288 million; 7.9% of sales). Marketing

brick-and-mortar retail

business totaled EUR 870 million in 2023, up 8% compared to the prior year (2022: EUR

807 million), thus improving to a level of 20.7% of Group sales (2022: 22.1%). Overall, as a percentage of sales, selling and marketing expenses decreased by 60 basis points to a level of 41.6% in 2023 (2022: 42.1%).

• • Administration expenses increased by 11% in fiscal year 2023. This development is mainly attributable to ongoing investments in the organization and its employees, resulting in higher payroll expenses and an increase in digital investments. Overall, as a percentage of sales, administration expenses decreased by 30 basis points to 10.1% (2022: 10.5%).
• Operating profit (EBIT) increased by 22% to EUR 410 million in fiscal year 2023. This development was driven by the strong top-line performance, enabling the Company to generate operating leverage despite ongoing investments into the business as well as the

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 7

EBIT margin increased 60 basis

points to 9.8%.

• At EUR 53 million, net financial expenses (financial result) in fiscal year 2023 were 7% above the prior-year level, as the Company recorded higher interest expenses in lease accounting under IFRS 16, reflecting the overall higher interest rate levels.
• The Group tax rate was slightly above the prior year, thus gradually normalizing to a level of 24%. In the prior year, lower-than-anticipated back tax payments and the revaluation of deferred tax assets supported a particularly low tax rate.

• Accordingly, thefor fiscal year 2023 amounted to EUR 270 million, up 22% against the prior-year level. Net income attributable to shareholders increased by 23% to EUR 258 million, while earnings per share grew 23% to EUR 3.74 in fiscal year 2023.

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 8

Net assets and financial position for fiscal year 2023

• Trade net working capital (TNWC) increased by 46% on a currency-adjusted basis, first and foremost reflecting a higher inventory position, aimed at supporting growth across channels. The moving average of TNWC as a percentage of sales based on the last four quarters amounted to 20.8% (2022: 15.0%).
• • Inventories were up 11% currency- inventories reflecting core merchandise as well as fresh merchandise for current and upcoming collections, aimed at supporting the top-line momentum. In light of implemented measures to optimize inventory levels going forward, the Company recorded a gradual normalization of inventories towards the end of fiscal year 2023, down 8% as compared to Q3 2023. Consequently, at 25.4%, inventories as a percentage of Group sales came in below the prior-year level (2022: 26.7%). Based on this, HUGO BOSS remains confident of improving inventories to a level below 20% of Group sales by 2025. At the same time, trade receivables increased noticeably, mainly strong performance in wholesale as well as the ongoing

expansion of the global franchise business. Trade payables, on the other hand, came in moderately below the prior-year level, primarily reflecting lower order volumes as part

to reduce core merchandise inflow.

1 Excl. the impact of IFRS 16.

• Capital expenditure increased by 55% to EUR 298 million in 2023 (2022: EUR 192 million). The further step-up in capital expenditure aims to support the ongoing successful
  further digitalizing its business model, and expanding its logistics capacities.
• Free cash flow amounted to EUR 96 million in fiscal year 2023 (2022: EUR 166 million). The year-over-year decline particularly reflects the significant step-up in investments, which was only partially offset by improvements in EBIT.

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 9

• Excluding the impact of IFRS 16, the net financial position of HUGO BOSS at the end of fiscal year 2023 totaled minus EUR 213 million (December 31, 2022 excluding IFRS 16: plus EUR 38 million). Including the impact of IFRS 16, the net financial position at the end of fiscal year 2023 totaled minus EUR 1,006 million (December 31, 2022: minus EUR 767 million).

Network of freestanding retail stores

• In fiscal year 2023, the number of own freestanding retail stores moderately increased to 489.
• • A total of 33 BOSS stores were newly opened across all regions, with a particular focus on expanding the distribution footprint in China. In addition, a total of four HUGO stores opened their doors in EMEA and the Americas. On the other hand, the Company closed 18 stores with expiring leases across EMEA and Asia/Pacific, aimed at further optimizing its distribution network.
  • The total selling space around 186,000 sq m at year-end(December 31, 2022: around 177,000 sq m). Brick- and-mortar sales productivity increased by 4% to a level of around EUR 12,400 per square meter (2022: around EUR 11,900 per square meter), fully in line with the
    level of more than EUR 13,000 per square meter by 2025. The increase in 2023 reflects, first and foremost, the robust top-line performance as well as the successful execution of strategic initiatives to further optimize and modernize the global store network, including the ongoing rollout of the latest store concepts for BOSS and HUGO.

Press release on the full year 2023 results

Metzingen, March 7, 2024

Page 10

Outlook 2024

OUTLOOK FOR FISCAL YEAR 2024

• Based on the robust brand momentum for BOSS and HUGO, in fiscal year 2024, the primary focus of HUGO BOSS will be on further executing its "CLAIM 5" strategy. In particular, HUGO BOSS is committed to driving additional market-share gains and achieving further top- and bottom-line improvements.
• For the global apparel industry, fiscal year 2024 is expected to be dominated by the ongoing high levels of macroeconomic uncertainty, including elevated inflation and interest rate levels, as well as mounting geopolitical tensions, with both expected to continue weighing on global consumer sentiment and retail spending.
• Against this backdrop, HUGO BOSS expects Group sales in reporting currency to increase within a range of 3% to 6% in 2024, with all segments contributing to growth. The Company expects sales in the EMEA region to grow in the low to mid-single-digit percentage range, while sales in the Americas are forecast to increase at a mid- to high single-digit rate. For Asia/Pacific, HUGO BOSS is confident of achieving growth in the high single- to low double-digit range in 2024.
• At the same time, HUGO BOSS anticipates EBIT to grow by between 5% and 15% to a level of around EUR 430 million to EUR 475 million in 2024. Consequently, EBIT margin is expected to improve to a level between 10.0% and 10.7% (2023: 9.8%), with strong support

coming from expected gross margin improvements in 2024. The latter will benefit from the

further-to-end operations, with additional support stemming from lower product costs, following a decline in commodity prices.

• Broadly in line with EBIT growth, HUGO BOSS also expects net income to increase within a range of 5% to 15% in 2024.
• Trade net working capital as a percentage of sales is expected to improve slightly, approaching a level of 20% in 2024. In particular, HUGO BOSS aims to further optimize its