Annual Report 2020

Income Statement

Income statement (in EUR million)



Jan. – Dec. 2020


Jan. – Dec. 2019


Change in %








Cost of sales







Gross profit







In % of sales






(400) bp

Operating expenses







In % of sales






(2,000) bp

Thereof selling and distribution expenses







Thereof impairment charges1






< (100)

Thereof administration expenses







Operating result (EBIT)






< (100)

In % of sales






(2,410) bp

Financial result







Earnings before taxes






< (100)

Income taxes






> 100

Net income






< (100)

Earnings per share (in EUR)2






< (100)

Income tax rate in %








Non-cash impairments on non-current assets related to the negative impact of COVID-19 on the Group’s own retail business.


Basic and diluted earnings per share.

At 61.0%, the gross profit margin was 400 basis points below the prior-year level (2019: 65.0%). The decrease was mainly driven by a market environment characterized by increased markdown activity as a result of the pandemic, in particular in Europe and the U.S. In addition, inventory valuation effects predominately relating to the Spring/Summer 2020 collection contributed to the decline in gross profit margin. The sale of this collection was significantly affected by the COVID-19 pandemic and the corresponding temporary store closures. Notes to the Consolidated Financial Statements, Note 12

Operating expenses decreased by a total of 7% in fiscal year 2020. Non-cash impairments of non-current assets of EUR 110 million weighed on selling and distribution expenses (2019: EUR 10 million). These were directly related to the negative implications of the pandemic on the Group’s retail business, primarily relating to impairments for fixed store assets in the amount of EUR 69 million and right-of-use assets in the amount of EUR 37 million. Excluding those impairment charges, the underlying operating expenses declined by 14% to EUR 1,313 million (2019 excluding impairment charges: EUR 1,521 million). This development reflects the early implementation and execution of comprehensive measures to reduce costs, particularly visible in selling and distribution expenses.

Selling and distribution expenses decreased by a total of 8% in fiscal year 2020. Excluding impairments of non-current assets, underlying selling and distribution expenses even declined by 16% to EUR 1,028 million (2019 excluding impairment charges: EUR 1,224 million). This primarily reflects the comprehensive cost-saving measures that HUGO BOSS successfully implemented in the course of the pandemic. In particular, the Company succeeded in significantly reducing rental and payroll expenses in own retail. In addition, marketing expenses were reduced by 12%. In fiscal year 2020, logistics expenses came in 9% below the prior-year level. Notes to the Consolidated Financial Statements, Note 2

Administration expenses in 2020 were also lower than in the prior year. The decrease of 4% was primarily driven by the positive impact of cost-saving measures, which were mainly related to reducing payroll as well as eliminating non-business-critical expenses. In this context, general administration expenses decreased by 2% to EUR 227 million (2019: EUR 231 million). Expenses for research and development incurred in light of the collection development came in 11% below the prior-year level, hence amounting to EUR 58 million (2019: EUR 65 million). Notes to the Consolidated Financial Statements, Note 3, Research & Development

The significant decline in sales as well as the lower gross profit margin inevitably weighed on the Group’s operating result (EBIT). While EBIT in fiscal year 2020 totaled minus EUR 236 million (2019: plus EUR 344 million), this also reflects non-cash impairments of non-current assets. Excluding those impairment charges, EBIT amounted to EUR minus 126 million (2019 excluding impairment charges: plus EUR 355 million). The comprehensive expense-reduction measures implemented by HUGO BOSS at an early stage partially compensated for the decline in earnings. Consequently, the EBIT margin amounted to minus 12.1% in 2020 (2019: plus 11.9%). Excluding impairment charges, the EBIT margin was minus 6.5% (2019 excluding impairment charges: plus 12.3%). At EUR 465 million, depreciation and amortization was significantly above the prior-year level (2019: EUR 362 million). Excluding the impairment charges, however, depreciation and amortization increased only slightly to EUR 355 million (2019 excluding impairment charges: EUR 352 million). Financial Position, Capital Expenditure

At minus EUR 38 million, the financial result (net financial expenses) was only slightly below the prior-year level (2019: minus EUR 39 million). The relief from income tax in the amount of EUR 54 million relates to the recognition of deferred taxes on the losses incurred in 2020 (2019: income tax expense of EUR 100 million). The Group tax rate amounted to 20%, mainly reflecting a varying regional development of the profit/loss shares as well as a non-recognition of deferred taxes at subsidiaries with a loss history (2019: 33% reflecting the tax field audit at HUGO BOSS AG). Consequently, the Group’s net income amounted to minus EUR 219 million (2019: EUR 205 million). Excluding the impairments of non-current assets, net income totaled minus EUR 131 million (2019 excluding impairment charges: plus EUR 212 million). Notes to the Consolidated Financial Statements, Note 4 and 5

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