Q1 2025 Hugo Boss AG Earnings Call
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Michael Kuhn, Michael Stohr, Daniel Grieder, Christian Stohr
Good morning ladies and gentlemen and welcome to the Q1 2025 Results call. I am Yusef, the chorus call operator. I would like to remind you that all participants will be in this in only mode and that this conference is being recorded.
The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone.
Speaker Change: For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Stohr, Senior Vice President Investor Relations. Please go ahead.
Christian Stohr: Good morning, ladies and gentlemen, and welcome to our first quarter, 2025 Resides presentation.
Speaker Change: In his absence, our CEO , Daniel Grieder, was turned on a business trip in the U.S. We'll be leading today's presentation.
Speaker Change: We are also joined by Yves Samarich, Executive Vice-President Business Operations, who oversees both our global controlling function and our operations activities.
Speaker Change: He will participate in the Q&A session which will be managed out of Mettingham.
Speaker Change: Please be reminded that during our presentation all growth rates related to revenue will be discussed on a current adjusted basis unless stated otherwise.
Speaker Change: During the Q&A session, we kindly ask you to limit your questions to two participants to ensure a smooth and efficient discussion.
Now let's get started and over to you, Daniel.
Daniel Grieder: Thank you, Christian and good morning, everyone. Thank you for joining our call today. First of all, I would like to send Yves and his family a lot of strength and heartfelt support during this difficult time. Our thoughts are with you.
But let me start now with the update.
Daniel Grieder: Against the backdrop of an increasingly volatile lack of economic environment and police to report that we have delivered solid first quarter results.
Daniel Grieder: We exceeded market expectations on both revenues and earnings, demonstrating the strengths and resilience of our business model.
Daniel Grieder: Following a strong finish to 2024, the start to the new year proved more difficult, as we already pointed out in March.
Daniel Grieder: In the view of the mounting external challenges affecting global consumer sentiment and industry development, we focused even more on rigorous strategic execution and consistent financial discipline.
Consequently, we limited the revenue decline to 2% with group sales reaching nearly 1 billion years. A bit.
Daniel Grieder: Two key drivers we will discuss in more detail shortly but first let's take a step back and examine the broader metro context that shaped the operating environment in the first quarter.
Daniel Grieder: As we have all witnessed, Q2, a Q1 was marked by significant macroeconomic uncertainty, geopolitical tensions, rising trade convictions.
Daniel Grieder: and we consumer confidence all contributed to software consumer spending worldwide especially in China demand remained subdued.
and in the US, this lining sentiment impacted discretionary spending.
Daniel Grieder: In light of this external headwinds at Hugo Boss, we stayed focused on what we can control. Executing our strategic initiatives with strong focus on consumer, centricity, and driving through the cost efficiency.
Daniel Grieder: Form a decisive basis of this. They enable us to navigate the current challenges and position our business for long-term success.
Daniel Grieder: A great example of how we keep fueling consumer excitement in our strategic partnership with David Beckham
Daniel Grieder: We kicked off the year with the successful launch of the Boss One bodywear campaign and activation that generated strong media reach and further strengthened brand appeal.
Daniel Grieder: and just two weeks ago we took another major step with the launch of the first co-designed Beckham Expo collection.
Daniel Grieder: Building on the strong visibility generated by our partnership with David, our Spring Summer 2025 collections added further momentum and supported our brands across varying occasions.
Daniel Grieder: That's it. In light of the challenging external backdrop, Salesforce, both our brands came in slightly below the prior year level. Boss Manjari Dhar, Disline, 2%, Boss Women's Warrior, 1%, and Hugo, also 2%.
Daniel Grieder: We started with a mail where sales remained broadly stable, dislining by just 1% year over year. Sales in Germany came in at the prior year level, while the UK and France recorded slightly dislined.
Daniel Grieder: Meanwhile, our important Middle East retail business continued to grow trajectory further on the scoring our potential in the region.
In the American revenues were also down 1%
Daniel Grieder: Double-Day Chick-Rose in Latin America was more than upset by moderate this line in the U.S. market.
Daniel Grieder: Over there, economic concerns, including recession, tariffs, and immigration policies increasingly weighted on local and tourist demand.
Daniel Grieder: This led to solve the retail trends due to reduced footstrafic, while Brick and Martha Stohr, Martha Wholesale recorded further growth.
Daniel Grieder: Moving over to Asia Pacific, revenues this line is by 8% a subdued consumer confidence continue to damp demand in China.
Daniel Grieder: In contrast, Sousy's Asia and Pacific's Arthur Gross led by another robust performance in Japan. This underlines the broad-based appeal of our brands across the regions.
With this, let's move on to our channels.
Daniel Grieder: Brick and mortar re-kill this line by 4%, mainly to the reduced mall and store traffic, as well as some minor adverse calendars effects.
Daniel Grieder: This includes one less trading day compared to the prior year and the shift of Easter into Q2.
Daniel Grieder: While we achieved an increase in sales per transaction, this was not enough to offset the overall lower footfall, particularly in the US and China.
Daniel Grieder: Enhancing customer engagement and the in-store experience remains crucial for long-term success in this channel.
Daniel Grieder: The recent opening of our Boss Hello store in Shanghai, time with the Formula One Grand Prix is a prime example. We generated strong social media buzz and boosted the appeal of Boss among Chinese consumers.
Daniel Grieder: Turning the brick and mortar wholesale, the Riemann in this line is 3%
Daniel Grieder: This largely reflects broader retail pressures and slight delivery shifts, which should normalize in the coming quarters.
Daniel Grieder: Notably, total wholesale, including both physical and digital wholesale, recorded solid growth in Q1. This reflects a robust pre-order business and the stronger section of our latest collection.
Daniel Grieder: To conclude, on the channels, digital sales were up 4% driven by revenues generated with partners.
Daniel Grieder: At the same time, Hugo Boss.com experienced somewhat softer trends, in your reflecting the substitute consumer environment.
Daniel Grieder: With this, let's now shift our focus to profit and loss starting with the gross margin.
Daniel Grieder: In the first quarter, our gross margin remains stable at 61.4%. Efficiency gains in sourcing, lower product costs and reduced air-fried chair supported our margin development.
Daniel Grieder: In particular, we continue to benefit from structural improvements and higher economies of scale, realized through our operational platform.
Daniel Grieder: This allowed us to offset adverse impacts from channel and regional mixed currencies and more for no promotion of market environment.
Daniel Grieder: Turning to our cost base. In the first quarter we continue to make progress in driving cost efficiency across key business areas, including marketing sales, administration, resulting in flat operational expenses year over year.
Daniel Grieder: Telling and marketing expenses remains stable despite a slight increase in brick and mortar retail expenses as well as the 3% increase in marketing investments which amounted to 7.9% of sales.
Daniel Grieder: This was driven by the major brand initiatives such as our campaign with David Beckham and the Shanghai opening event.
Daniel Grieder: We anticipate the relative marketing spend to the be slightly lower in the coming quarters while maintaining our focus on driving brand awareness and consumer engagement.
Daniel Grieder: Finally, administration expenses declined 1%, underscoring the success of our continued effort to enhance operational efficiency.
Daniel Grieder: Importantly, this development primarily reflects prior strategic investment aimed at supporting long-term growth in front of the contrast.
Daniel Grieder: Our EBITDA, Marginary Main Stable at 15.2% highlighting the underlining strength of our operating model.
Daniel Grieder: Last but not least, earnings per share amounted to 51 cents down 8% versus the prior period.
Daniel Grieder: Now, round of our Q1 review, let's take a brief look at the remaining balance sheet and cash flow items.
Daniel Grieder: Great networking capital, increased by 2% currency adjusted, largely reflecting a 5% rise in inventories year over year.
Daniel Grieder: This development was driven by higher goods in transit, along with planned increase in inventory coverage.
Daniel Grieder: relates to the U.S. market in response to ongoing terrorist uncertainty.
Daniel Grieder: As percentage of sales, inventories stood at 25.1%, broadly in line with the level at the end of last year As a result
Daniel Grieder: Trade networking capital relative to sales amounted to 19.7% thus largely stable compared to last quarter.
Daniel Grieder: The Expectary Cash Flow Generation to accelerate over the course of the year, supported by improved earnings momentum and the more balanced working capital development.
Daniel Grieder: Looking ahead to the reminder of the year, Riemann committed?
Daniel Grieder: to implementing our claim-5 strategy while also driving improvements in profitability. Building on the strong foundation built in recent years, we will continue to execute 2025 with discipline, agility and impact.
Daniel Grieder: Importantly, we will continue to invest in key initiatives that strengthen brand momentum and deepen consumer engagement for both Boss and Hugo.
Daniel Grieder: These efforts will be supported by further improvements in sourcing and our ongoing focus on operational efficiency. However
Daniel Grieder: Our plans are unfolding within a broader context shaped by continuous
Daniel Grieder: A reality we cannot ignore as we plan and execute in 2025.
Daniel Grieder: In addition, the ongoing economic challenge is the potential impact of involving trade restrictions is a significant source of uncertainty.
Daniel Grieder: Global Trade Dynamics and ongoing terrorist discussions are creating an uncertain environment affecting both supply chains and consumer sentiment, especially in the US.
Daniel Grieder: Therefore, we continue to closely monitor the volatile environment as we move forward.
Daniel Grieder: Our globally diversified sourcing structure continues to be a resilient backbone of our operation.
Daniel Grieder: and around 20% of our total sourcing is done in-house mainly in Turkey, providing greater flexibility and control.
Daniel Grieder: Aside from Turkey, no other country accounts for a significant sourcing share. This angus scores the balanced nature of our supply chain.
Daniel Grieder: Also, when looking at the US market, which represents around 50% of group sales, our exposure remains well-contained. Good source from China account for only 4% of our US sourcing volume.
Daniel Grieder: Meanwhile, roughly one third of inbound sourcing, steams from Turkey and Peru. Both unaffected.
by the current terrorist discussions.
Daniel Grieder: To actively mitigate the impact of tariffs, already in place and absorb potential cost effects, we are pursuing several strategic measures. Beside increasing US infantry coverage, we are taking the following steps.
Daniel Grieder: to minimize our risk. Firstly, we redirect products coming from China to the US and replace them with items from other markets.
Daniel Grieder: This change aims to minimize the amount of merchandising flowing from China to the U.S. in the short term. Secondly,
Daniel Grieder: We continue to optimize our global sourcing footprint and leverage our flexible supply chain. This enables us to adapt sourcing decisions with relatively short lead times so we can adjust if new trades related to challenging arise.
Daniel Grieder: Thirdly, we are carefully evaluating potential prize adjustments. In any case, we would adopt a demand-sensitive pricing strategy to maintain our strong brand perception and our superior prize-value proposition.
Daniel Grieder: Even the ongoing and certainly around Terris, it's still too early to draw final conclusions.
Daniel Grieder: This set, thanks to our strategic measures, our solid Q1 performance and our resilient business model, we are confident in confirming our outlook for 2025.
Daniel Grieder: In doing so, we are taking the current terrorist regime into consideration.
Daniel Grieder: Consequently, we continue to expect group sales to remain broadly in line with the prior year.
Daniel Grieder: This remains a realistic and prudent view given the current economic landscape.
Daniel Grieder: At the same time, we continue to anticipate improvements on the bottom line.
Daniel Grieder: On the bottom line, we expect EBIT to increase to a level between 380 and 440 million euros, leading to an EBIT margin of 9 to 10%.
Daniel Grieder: This development will be driven by ongoing sourcing efficiencies supporting our growth margin as well as our continued focus on cost efficiency.
Daniel Grieder: In conclusion, while the road ahead may have its challenges, we remain committed to execute our strategy and improve profitability in 2025.
Daniel Grieder: With our powerful brands, resilient supply chain, and strong organizational platform, we are well equipped to address market shifts and
Daniel Grieder: As we look forward, we will continue to navigate with steady hands, sharp execution and the clear focus on delivering against our priorities for the reminder of the year. And with this, we are now very happy to take your questions.
Daniel Grieder: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: Anyone who wishes to ask the question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you have press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question.
Speaker Change: Anyone was a question made by Star One at this time. The first question comes from Manjari Dhar from Royal Bank of Canada. Please go ahead.
Manjari Dhar: Thank you for taking my questions. I had two if I may. My first question, I just wanted if you could give any color on what you've seen in terms of top line trends in April and maybe within that could you sort of want to find the impact on wholesale of the timing
due to the later timing of Easter. [inaudible]
Manjari Dhar: and then secondly, I just had a question on Ophex, showing some good cost control there. I just want to do if you could.
Manjari Dhar: Give any colour on how you expect the moving parts within off-pecs to trend for the full gear and appreciate your luck and some good cost control for the second half. Thank you.
[inaudible]
Speaker Change: Perfect. Manjari, thank you for a question. The first one, but also the second one I think I would hand over to Yves the first one, again on Topline Trends in April and what extent at the whole third time you shift or might impact our cue, our April performance and then the second one related to the OPEX expectations for full year 2025.
Speaker Change: Thank you, Manjari for your question, and let's start with the current trading trend. And just like in the past, we will not comment in detail on the performance by month.
Speaker Change: But as you know, we already indicated during the full year 24 results released in March that we have seen some trends deteriorating in particular in the month of February
Speaker Change: At the same time, March somehow showed improvement across all channels in particular supported by increased deliveries to our customers, both offline and online. So the key point here is that we are operating in a highly volatile environment.
Speaker Change: But overall, we are fully in line with our guidance across Q1 trends and I think the same continues to be true in recent weeks. You can just take those two comments and
Speaker Change: It's also, let's say, a comment on April . It's still volatile, but we are trading in line with our guidance overall.
Speaker Change: Second question on cost control. We strongly focus on driving sustainable cost efficiencies across all areas of the business.
Speaker Change: and this includes marketing, sales administration and this will definitely support our profitability target for 2025. And the Fled OPEC's development in Q1 reflects really structural discipline rather than one of our short-term delays.
Speaker Change: Efficiency gains are embedded in how we operate and allocate resources, and we are not afraid of a more difficult comparison base in H2, especially because you know when we started to really focus on this particular efficiency, we were implementing some short-term measures.
Speaker Change: But in addition to that, we were also working on some cost measures that need time to really unfold their impact.
talking about
Speaker Change: of a payroll efficiency and ortho-capic efficiency which naturally needs some time to really unfold its impact and this will give us support especially for the second half of this year.
Speaker Change: We remain confident to achieve at least the same development we have seen also in Q1 and are not afraid of the tougher compass for our cost development throughout the remainder of the year.
That's all very clear. Thank you.
Speaker Change: The next question comes from the line of Jurgen Kolb von Kepler-Chevere, please go ahead.
Jürgen Kolb: Thanks very much. Two questions indeed. First one or both of them on the US market. First of all, you stated Daniel that you are planning to assess the situation and potentially price increases would be one step and one alternative to react on the tarves.
I was wondering if you could-
Elaborate if...
Jürgen Kolb: You would also consider to be a leading brand in the marketplace or would you rather say we want to wait until let's say the American the typical American brands take the first step and then we'll follow will follow suit that's the first one and the second one again also on the US market as you're over there and what are your what are your experiences. And.
Jürgen Kolb: is boss right now in this a little bit more difficult environment, maybe performing better than some other brands, which might give you the chance to take some market share in a Gried, very volatile and difficult to forecast market.
Jürgen Kolb: Again, is that a chance to maybe do better and take this weakness as an opportunity? Thank you very much.
Christian Stohr: Thank you for your question. So Daniel, these are two questions I would actually like to end over to you since you are in the state at the moment. So the first question.
Christian Stohr: A little bit on pricing, Mr. Gretz, the US market, the second one.
Christian Stohr: and when it comes to the current market sentiment and our positioning.
Thank you, Daniel. Okay.
Thank you.
The way that Trump is taking, but…
Christian Stohr: and the fact is, when you look in shopping malls, when you go into outlet centers.
Christian Stohr: What is really a big concern is that the traffic went down, something like 20 to 30 percent.
and that has, of course, [inaudible]
Christian Stohr: An impact to everybody. You see that also the tourists when I just came to the US last week, you know, when you come into the airport, it's just less traffic from tourists.
I would say the country is quite affected.
Christian Stohr: of several strategic two-of-set additional costs. That's of course we look into it. Our approach
Christian Stohr: A commitment to maintain the price-value proposition of our brains, and what we all stand for, while enduring that any adjustments are aligned to this broader economic factors and general market conditions, I would say.
Christian Stohr: by taking a measured and strategic approach that's important we aim to balance the need to negate cost impacts with the importance of sustaining consumer loyalty and satisfaction.
Christian Stohr: So we are not just going in and just put a price increase on the table, I think we have to do it in a smart way and
Christian Stohr: We want to wait a little bit longer and see how it is developing.
Christian Stohr: I would one on the line effect that we as a brand, the US market became in 2023 our most successful biggest market. So our brand is at the moment and during the last few years we were gaining
and continuously, and this for both friends for both and Hugo.
Christian Stohr: You know, if you look at the electronic environment in the U.S. has really the softens since the start of the year. It's really started all by the start of this year.
Christian Stohr: Both local tourists, as I said, the demand. This is reflecting in the design in Mull, as I mentioned, and also waiting on our brick and mortar performance.
So we are monitoring, we are trying to be...
Christian Stohr: Open-minded and flexible to act in any directions but one thing we have in our hands is really the momentum of our brand as we fuel it as I mentioned before, for example, is the Beckham.
Christian Stohr: Campain, which is also very strong received here in the U.S.
I think Eric answered with those questions.
Yep, thanks very much. Good work.
The Safe Travels
and then Jurgen Stohr,
Speaker Change: Thank you, Daniel. And you're just for clarification purposes. The traffic decline that Daniel mentioned was not a Hugo Boss traffic number that we were sharing but basically...
Speaker Change: Patrick Numbers that we were observing in department stores and in basically Morals, so these are not numbers exclusive to us but market observations that we are currently seeing and the same is true also to what Daniel was sharing in terms of the overall sentiment in the market since the beginning of the year, so not necessarily...
I comment on just today's trading to avoid any confusion here.
Thanks.
Speaker Change: The next question comes from Grace Mollie for Morgan Stanley . Please go ahead.
Grace Molly: Hi, good morning. Two questions from me, please. Out of the first form would just be if you could provide an update on your wholesale order books and in particular given Daniel's comment tree bear, just see if you're seeing any change in terms of customer behaviour from your wholesale partners and how they're approaching for winter 2025. [inaudible]
and then my second question would just be, of course, Majim. [inaudible]
if you could just update us.
Grace Molly: in particular on promotions, just given they were still a headwind in Q1 and I think previously you had expected, you'd expect promotions at least on a four-year basis to have a neutral impact to just how you're evolving that assumption. Thank you very much.
Speaker Change: Thank you, great. So thank you for your questions. I will take the first one on the Vocal Order Book and then I hand over to Yves for the second question on your growth margin.
Christian, related to the 2025 guidance.
Speaker Change: So, no update really that I can share with you on the Jose site as we have already told you mid-March when we are fully recited to Louise. We are looking at a solid order intake for pretty much all 2025 and the showcases the support that we keep getting from our Jose partners.
Speaker Change: So clearly something that gives us a level of optimism when it comes to 2025.
Speaker Change: We've also not seen any larger cancellations as of now which would trigger any concern or maybe that's also where your question is looting to. So overall long story short, solid order index for the year and of course also the Aussie Channel will have to observe the most recent environment and how things keep doing but generally speaking, everything we have in our hands, everything we have in our books.
Speaker Change: Like I said, it makes us somewhat optimistic when it comes to that channel for this year at 2025 and don't forget when we talk about order intakes, we not just talk about brick-and-mortals, it will also talk about
Speaker Change: and the online part of our business where we are also working with a number of very successful online players in the market.
Speaker Change: Yves, that may be over to you for the second question on the Gross March and Outlook for 2025. Thank you for your questions. Just to give you some light on the Gross March and Outlook for 2025.
Speaker Change: We remain to be confident to further increase our gross margin for 2025.
Speaker Change: Let's say ship mode improvements, you know that in last few years we definitely already have improved our...
And now assuming that they don't re-accurate this year again.
Speaker Change: We'll give us a table and throw out the remainder of the year, especially because those effects had started mainly mid of last year and you might ask now the Red Sea conflict was already starting end of 23 or beginning twenty-four.
Speaker Change: That's definitely true, but we have seen definitely also some commercial vessels still trying to ship through the Suez Canal until end of Q1.
Speaker Change: and the re-routing happened especially in March and thereafter which extended delete times significantly and at the same time
Increased the cost for sea as well as air shipments.
Speaker Change: and we were also forced to absorb that to a certain extent and also to, let's say, get some husband also on the improvements we were trying to get in 24.
Speaker Change: Wild, this year we do not expect to re-happen again and we have adjusted our plans and are confident then to further decrease especially on air shipments and also the
Rates for
Speaker Change: C-Shiftman has come down in recent months, which will definitely give us some tailwind for our remainder of the year, especially second half of 2025.
Speaker Change: Great, thank you, and just follow up on what you're thinking in terms of your assumptions for promotion for the rest of the year, please.
Speaker Change: As we said have been somehow elevated end of last year and this hasn't changed significantly and the first quarter of this year so we assume the situation to remain on that elevated level throughout the year and this is baked into our guidance so mainly the improvement will come from sourcing efficiencies and supported by tailwinds coming from our ship mode optimization
Mining 9 months off this year.
Okay, great. Thank you, boss.
Thomas Chauvet: The next question comes from Thomas Shoeh from City, please go ahead.
Thomas Chauvet: Schipmans from the autumn collection and if I understand correctly that has reached the U.S. in early April before the 10% tariffs so it means you don't need to worry about price increase. I guess is that correct?
and secondly, could you talk about the David Beckham partnership?
Speaker Change: in terms of self-contribution in the medium term, or is it all about brand image? And do you have plans to launch a similar collaboration with a female celebrity for women's wear lines? Thank you.
Speaker Change: Thank you, Tomah, for your question, so I would actually like to end over the second question related to David Beckham to you, Daniel, and then Yves Muller will follow up on the US terrorist question. Daniel, can you please take Tomah's question on David Beckham?
Yeah.
Yeah, to talk about David that kind of. [inaudible]
An incredibly strong and successful partnership.
Speaker Change: As you know, Beckham is not relevant just in Europe . He is relevant in all the regions, even including Asia. He is, everybody is admiring no matter if all the young.
Speaker Change: It's male, female, it's really an incredible testimonial and partnership with him.
Speaker Change: That's number one. Number two, the campaign actually also outperformed any numbers on social media but most importantly also sales number have increased tremendously.
Speaker Change: Only I'm talking now about the underwear we reached in the first two months, over 20% increase of just that single underwear.
Speaker Change: But it's not only about the single underwear and the sales, it has also a spillover of the brand of other products especially the boss one suit which we sell along or next to the underwear because we want to have also higher ticket prices.
Speaker Change: because you have to get a lot of traffic into the store when you own this cell on the where. So the combination of that on the where.
Speaker Change: Boss, I don't know if you have seen the film when he basically drives into the garage and he is wearing first the suit and then he takes the suit out and then goes into the underwear so we highlight not only the underwear also the suit to get an higher average ticket.
Speaker Change: So from social media, from sales, and from image point of view, we would say this is a big success at the partnership with David Beckham.
Speaker Change: Now you ask also if we have a similar part as similar testimonial maybe in
and we are...
Speaker Change: We are keeping our eyes and ears open to find such a strong and partnership on the female side, but this is not so easy. I think Beckham was one of a kind.
Speaker Change: and that we still have to look in the female but we are positively that sooner or later we will do a similar approach also on the female side.
Thank you. Daniel and Yves, how are you?
Speaker Change: Combined with further reductions in air shipments, and naturally then we have to wait for our goods on the boat to arrive in our warehouse.
Speaker Change: Related to your question on US, we were trying to definitely to pile up as much as we can on Inbetries before and of Q1 into the US. This was mainly spring summer and partially also fall 25 merchandise, whereas
Speaker Change: Part of Fall and mainly winter are still entrended and as we already highlighted before we feel confident with the overall situation as it is, as of today with the current terrace in place because we are also able to.
Speaker Change: The terrorist currently in place in the US from China, we are trying to get it down as much as we can and re-roads to other countries and at the same time we will be able to replace those goods, especially winter merchandise with production from other countries to the US.
Thank you.
Thank you, Thomas.
Speaker Change: The next question comes from Susy Tibaldi, YPS, Vizklad.
Suzy Tivaldi: Thanks for taking my question. So the first one on wholesale, can you help us understand the magnitude of the timing effects?
Suzy Tivaldi: a double-digiting Q2 and just wanted to check the match or if we should consider also that the replenishment business may be seeing some different trends.
Suzy Tivaldi: And then my second, a follow-up on the growth margin on the promotional environment. Are you seeing a bit more promotions? Is this a comment globally or more US-specific given also the risk from your competitors building a lot of inventory?
Suzy Tivaldi: Well, if we think about the effects in part on the growth margin, for the few years, it's fair to say that, I mean, the weekly US dollar should be very much in your favor given your footprint. So any comment on this would be helpful. Thank you.
Speaker Change: and experience and identity in their podiatry care following hypertension with Colpre lymphadenope and bearing sickening results. I mean, we have people who deliver bariatric care, there are people who deliver kinds of rehabilitation care that heal with mucus and mitral fluid bubbles and minor problems like this,
Speaker Change: So, on your two questions, I'm starting with the second one, as Yves already indicated, we're seeing a similar level of promotion activity as you think about Q1.
Speaker Change: So, not too different from what we've seen in Q4 and we're seeing it.
Speaker Change: In particular, the widespread environment as of now and that as a consequence also speaks to the European market and probably also to some extent to the US market. [inaudible]
and you know that our-
Speaker Change: Josef Business, obviously in the Asia-Pacific region is rather limited.
Speaker Change: So you can assume that this phenomenon that we are observing for some time but again has really changed from Q4 into Q1 is something that we are observing in our largest regions Europe and the Americas in particular in that major plant environment.
Speaker Change: And speak about wholesale on your question in terms of delivery shift effect that is also something that I think is that you touched on.
Speaker Change: and that, in particular in March, we were quite successful when it comes to increase the deliveries to all customers.
Speaker Change: Again, offline and online. That's really where you have to look at the wholesale or the intake for the year. It's covering everything across the touch points.
Speaker Change: So, since we have done quite some shipments or deliveries in March, I think there might still be some positive shift effect into Q2 but rather on a minor note. Okay, so nothing.
Speaker Change: that you should emphasize too much or focus too much on, and there is an effect but like I said not as much as maybe be thought begin large.
Speaker Change: and maybe to add on your question on the exchange rate effect.
Speaker Change: You're right that we're going to get some treatment from the US dollar but at the same time we also have some negative effects resulting from other currencies especially on our top line like the Canadian dollar, the Chinese Remimbi or the Mexican peso.
Speaker Change: So, overall, we do not expect a substantial positive impact out of currencies for the remainder of the year.
Thank you.
Speaker Change: The next question comes from Adrian Duverger, von Goldman Sachs. Please go ahead.
Adrian Duwerger: Hey, good morning. Thank you very much for taking my questions.
Speaker Change: So could you please comment on the performance you have seen for the different clusters by Nationality, please? And if you could comment on what has changed versus Q4 and what have been the biggest surprises.
and my second question would be on your wholesale network.
Speaker Change: So I know you've been expanding it lately. Could you please comment a bit more on if the extension was more the extension of footprint or just you know seeing more opportunity to take more shelf space given the strength of the brand lately. I would imagine with the David Dechem marketing campaign, you would also be able to gain a bit more.
Thank you very much.
Speaker Change: Sorry Adrian, can you repeat your first question please? The first question would be if you can comment on the performance that you've seen on the different consumer clusters by nationality and what has changed since Q4 and what's been the biggest surprise this year.
Speaker Change: So I will start taking your second question on the hosting network and then we see if you are on myself. We will continue the first one.
Speaker Change: But I started the whole secretion and Daniel also feels free to add any comments once I'm done but...
Speaker Change: and obviously additional space in the Jose Channel, you might remember.
Speaker Change: That includes basically most of all the parts that are here in Europe , but also in the US market where we've been able to strongly bring more brand lines into the various channels so that the key success of the fact that we are now perceived as a tier 24, 7 brand. [inaudible]
Speaker Change: Like the US, irrespective of the current environment, you have this most strategic answer now.
Speaker Change: And on top, don't forget that there's also still a friendship, opportunity, so mono-brand, wholesale model that we're also looking into that we eventually will keep on expanding that we think about it for expanding in emerging markets.
and because it's a very promising model as we believe.
Speaker Change: So wholesale, good business for us, you know the size of it, let's not forget about our retail business either, but still saying that there is an opportunity to win more space, but like for like it's getting also more important.
Speaker Change: Christian, maybe I add to that. Indeed, so we gained, first of all, market chairs.
Speaker Change: with the brand line, as you mentioned, which was a very successful strategic move to the 24-7 lifestyle brand, as you mentioned. But indeed, we also gained market shares when we got also bigger shops.
Speaker Change: in the department stores and this for men and for women and not only for boss but also for Hugo but especially in the U.S. when you see it here it's very successfully enhanced the space in all the department stores.
and you mentioned also David Beckham.
Speaker Change: We were also able to open top-up stores with the next to the underwear campaign. We see on the wear-end of Davey Beckham.
Speaker Change: and that helped us in all over the world with these pop-up stores to gain another...
and also a win in more turnover.
So the closer model is our most.
Speaker Change: Constable, a business model, and we balanced over the past three years between Rital and Holesale, Holesale is becoming more, became stronger over the past three years and very successfully so which is still very disciplined and controlled distribution.
Adrian Duwerger: Great, thank you Daniel, and the last question Adrian, you had on the performance by consumer of a cluster.
Speaker Change: Well, we are still seeing that the Chinese consumers are obviously showing some.
Speaker Change: Softness, we have made a comment on the domestic performance of the Chinese market and you can assume that that
Speaker Change: Who speaks to the Chinese consumer as a whole. So that's one way to look at it in the US market.
Speaker Change: We think that Stohr is going into the US, but we are seeing Stohr from the US coming to Europe at least when we think about Q1. So I would say no major change in trends from a consumer profile perspective in Q1 compared to what we've seen last year with some weakness on the Chinese consumer. And maybe that's...
It's for now.
Speaker Change: Thank you, and just if you can comment on the European Castro as well.
Speaker Change: Well, like I said, a little bit less European struggling overseas, but other than that, I think now we start at...
Speaker Change: The important or more important travelling season for Europeans, at least within Europe . I don't forget about Southern European markets, Western markets as well. I think that's no coming up, where maybe you want in any case is not the most important quarter. [inaudible]
I mean, thank you very much for my questions.
Speaker Change: The overall tourist share hasn't changed substantially compared to last year. I think the only exception is the travel to the U.S. which due to obvious reasons are somehow declining.
Michael Kuhn,
Speaker Change: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Christian Stohr for any closing remarks.
Great, that completes today's concert call. And yay!
Speaker Change: I want to thank you for your understanding that today we were hosting that call in the different members, but of course it's always if there's any follow-up questions you may have, please feel free to call the
Speaker Change: Thank you very much for your participation and look forward to seeing many of you at the upcoming conferences. Thanks very much and goodbye.
Speaker Change: Ladies and gentlemen, the conference is now over. Thank you for choosing course call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
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