Ladies and gentlemen welcome to the Q4 Full Year 2024 Results Conference Call and Live Webcast. I am Sandra [ph], the Chorus Call operator. I would like to remind you that all participants have been in listen-only mode and the conference is being recorded. The presentation will be followed by Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christian Stoehr, Senior Vice President, Investor Relations. Please go ahead, sir.

Good morning, everyone and welcome to our full year 2024 financial results presentation, hosted by Daniel Grieder, CEO of HUGO BOSS; and Yves Muller, CFO and COO. Today's conference call will be divided into 3 parts; Daniel will kick off by highlighting some of our key strategic achievements in 2024. Afterwards, Yves will present our financial performance in the last fiscal year, before Daniel provides details on our full year 2025 outlook. As always, we will conclude with a Q&A session, where we will be happy to answer your questions. Before I hand over to Daniel, allow me to remind you that all revenue-related growth rates will be discussed on a currency-adjusted basis, unless otherwise specified. I would also like to remind you that during the Q&A session, we kindly ask you to limit your questions to a maximum of 2. So let's get started and over to you, Daniel.

Thank you, Christian and also good morning from my side. Thanks for joining our call today. Since the beginning of our CLAIM 5 journey in 2021, we have achieved significant milestones across our strategic priorities. And I am pleased to report that our growth trajectory continued in 2024. We increased group sales to a record level of €4.3 billion, while EBIT amounted to €361 million, despite a difficult market environment and a sharp industry slowdown over the course of the year. When we presented our initial outlook for fiscal year 2024, we and most likely also you were somewhat more optimistic about the opportunities that 2024 would bring. At HUGO BOSS, we were fully committed to making further progress towards our midterm financial ambition. However, over the course of the year, we had to learn that both the world and our industry were being impacted by numerous macroeconomic and geopolitical challenges. First and foremost, this includes ongoing elevated inflation levels and living costs which weighed on consumer confidence. Geopolitical tension and key election outcomes added further volatility and put consumer demand under pressure in many markets around the globe. Against this backdrop, I'm satisfied how we ended 2024. We achieved our financial targets as adjusted in July and continued our successful CLAIM 5 journey. For more than 3 years, we have strengthened brand momentum and achieved above-market growth. Reaching €4.3 billion in sales is yet another milestone along this path. It underscores the strength of CLAIM 5 and the great potential of our brands. The enhanced relevance of BOSS and HUGO is most evident in our greater presence on social media. Since the launch of CLAIM 5, we have generated more than 130 billion impressions across all channels and over 3 billion engagements. Our social-first approach enables us to add over 11 million new followers. And within our quarterly brand heat index, BOSS consistently ranks among the top brands. And therefore, convinced that today, we are operating from a position of strength, both from a financial and a strategic perspective. Over the last several years, we have constantly invested in our brands, product, distribution, digital capabilities and logistics. This upfront investment form the basis of our operational and financial performance as part of CLAIM 5. And they will continue to drive us forward, providing an important foundation for long-term profitable growth. In response to the intensifying external challenges and industry headwinds, we adjusted our game plan and adapted to the evolving market environment. We prioritized strategically relevant initiatives and focused more on consumer centricity. This enables us to exploit our global growth opportunity despite all external factors. With a strong commitment to protecting profitability, we also placed emphasis on increasing cost efficiency across all business areas, including operations, marketing, sales and administration. We will elaborate on these efficiency measures later on. But first, let's take a closer look on some of our most important initiatives, all designed to inspire customers around the world. Welcoming the global icon, David Beckham to our BOSS family was certainly a key moment in 2024, fueling brand awareness and driving brand engagement. Importantly, this multiyear partnership goes beyond any of our previous collaborations, both in terms of duration and impact. After his debut in our fall/winter 2004 campaign, the recent launch of our BOSS ONE underwear campaign has attracted attention, generating 3 billion impressions in only 1 month. Following this success, we look forward to the first capsule collection co-created by David to drop later this year. Our global brand campaigns and marketing events such as our BOSS Fashion Show in Milan and the HUGO X Formula 1 event in Miami drove additional excitement throughout the year. Importantly, we also made strong progress in driving marketing effectiveness. With our latest BOSS brand campaign, for example, we were able to more than double the level of engagement and social media as compared to last year's campaign. And during our fashion show in Milan, we reached over 40 million views, making it the most successful fashion show in our industry. As in the previous years, we remain committed to delivering exceptional products with a superior price value proposition. We sharpened our brand 24/7 lifestyle positioning and further leveraged the potential of our brand lines, including our exclusive assortment on the BOSS Camel. The launch of HUGO Blue marked another important milestone in this direction, expanding our denimwear offering to a new generation of consumers. Our commitment to continuously improving the customer experience and providing a superior brand experience at all points of contact was just evident in 2024. With the launch of our next level loyalty program, HUGO BOSS XP, we are strengthening the connection with our most valuable customers and deepening their loyalty. In 2024 alone, this enabled us to grow our member base by 25%, surpassing 10 million registered BOSS and HUGO customers for the first time. Moving forward, HUGO BOSS XP will play an important role in further expanding customer relationships, both online and offline. The rollout to further important markets is planned for later this year. Besides investing in key strategic initiatives and capitalizing on our growth opportunities, we took decisive action in improved cost efficiency. We further enhanced our digital capabilities and capitalized on our AI, artificial intelligence, to drive forces behind our vision of being the leading premium tech-driven fashion platform worldwide. We also leveraged our organizational and operational platform and thereby limited expense growth over the course of the year. In this context, in 2024, we further streamlined our global sourcing activities and unlocked productivity gains across key business functions. This translated into meaningful gross margin support which helped us to more than offset various external headwinds. In addition, we stepped up our financial discipline, driving efficiencies across our cost base. These actions enabled us to notably limit operating expense growth in the second half of the year. With underlying OpEx broadly stable in H2, we have made, importantly, progress in unlocking productivity gains. Yves will give you more detailed information on our various cost efficiency measures in just a moment. However, let me take this opportunity to emphasize that we will continue to maintain our cost discipline in the future. We are fully reminded to further improve our profitability in the years to come to capitalize on our organizational strength and leverage the great potential of our company. Our commitment to generating sustainable, profitable growth has never been stronger. But before we turn into the future, I want to hand over to you, Yves, for a financial review of 2024.

Thank you very much, Daniel. And also from my side, a warm welcome to all of you. Over the next 10 minutes, I will walk you through our operational and financial performance for 2024. Let's begin by taking a closer look at our top and bottom line performance in 2024. While the global market environment deteriorated throughout the year, we delivered solid top line improvements. This development is a direct consequence of the continued execution of our CLAIM 5 strategy and the enhanced brand relevance of BOSS and HUGO. Overall, group sales grew by 3%, reaching a new record of €4.3 billion. At the same time and as Daniel already alluded to, we took decisive action to enhance cost efficiency. In doing so, we limited the increase in operating expenses in the second half of the year and yielded meaningful bottom line support. As a result, EBIT in 2024 amounted to €361 million with the EBIT margin adding up to 8.4 percentage points. This is all the more remarkable when considering that our EBIT development was negatively impacted by a year-on-year swing in noncash impairment charges of around €50 million. These impairments were relatively related to the overall challenging market environment in brick-and-mortar retail. Consequently and despite the difficult market environment, we successfully achieved our full year 2024 sales and earnings targets which we adjusted back in July to reflect evolving macro conditions. Now let's dive deeper into our top line performance. We started 2024 on a positive note, delivering 6% revenue growth in the first quarter. However, our business performance over the course of the year was impacted by muted consumer demand across most markets, leading to an overall slowdown in industry growth. This was particularly evident over the summer months and our performance in Q2 and Q3. Supported by the ongoing successful execution of our strategic initiatives, we were able to accelerate our sales growth again, culminating in an increase of 6% in Q4. Bolstered by a successful holiday season, the fourth quarter saw broad-based growth across both brands, all channels and most regions. Notably, our brick-and-mortar retail business returned to growth, closing the quarter with a 2% increase. This was further complemented by an acceleration in brick-and-mortar wholesale and digital, both recorded double-digit growth in Q4. From a regional perspective, both the Americas and EMEA delivered robust revenue improvement, up 13% and 6%, respectively. Meanwhile, in Asia Pacific, business performance remained muted, dragged down by the difficult market environment in China. When we look at our full year 2024 performance, both BOSS and HUGO drove revenue improvements, reflecting the disciplined execution of key brand and product initiatives. Sales for both BOSS Menswear and BOSS Womenswear increased by 3%, fueled by our brand campaigns and major brand moments such as the BOSS Fashion Show in Milan. At HUGO, sales even expanded by 5%, supported by the successful launch of HUGO Blue. Let's move on to our regional performance, starting with the Americas, where we maintained our growth trajectory in 2024, with all markets contributing. Notably, in the U.S., our single largest market, revenues were up high single digit, driven by broad-based improvements across all touch points. And as a result, the Americas outperformed our 2 other regions, delivering 8% growth for the year. In EMEA, revenues increased by 3%. This development was led by solid improvements in Germany, while sales in France and the U.K. remained modestly below prior year levels. On a positive note, momentum in emerging markets, including Eastern Europe and the Middle East, remained strong throughout 2024, posting double-digit growth. In contrast, sales in Asia Pacific declined 2% year-over-year. While we recorded high single-digit growth in Southeast Asia Pacific, supported by robust momentum in Japan, sales in China were down low teens, reflecting muted local demand. Speaking about China, let me remind you once again that our exposure to the market is rather limited, accounting for around 5% of group sales. However, this limited share does not mean we are unaffected by the situation on ground. To conclude on our top line review, let's take a quick look at our distribution channels. We have always emphasized the strength of our omnichannel strategy. In this context, 2024 has once again confirmed our approach and highlighted the benefits of having a strong presence in both mono-brand and multi-brand environments. The performance in 2024 was particularly robust in brick-and-mortar wholesale and digital, while revenues in brick-and-mortar retail remained on par with the prior year level. With retail, an increase in sales per transaction was offset by a decline in store traffic, first and foremost, in key retail markets such as China and the U.K. By contrast, our brick-and-mortar wholesale business delivered 8% growth, reflecting robust demand for BOSS and HUGO. This enabled both brands to further enhance visibility and penetration at key department stores, while also expanding our global franchise network in emerging markets. Lastly, our digital business continued its growth trajectory with sales up 6%, fueled by improvements at both hugoboss.com and digital sales generated with partners. As a result, digital now accounts for 20% of group sales, underscoring its pivotal role in our omnichannel strategy and cementing its position as a key engine of future growth. Let's now shift our focus to profit and loss, starting with the gross margin. I'm pleased to report that our gross margin improved by 30 basis points, reaching 61.8% in 2024. This achievement was supported by a successful fourth quarter, where gross margin expanded by 90 basis points to 62.4%, making Q4 our strongest quarterly performance from a gross margin perspective. This positive development is a clear testament to the successes of our strategic efforts to drive sourcing efficiency. By leveraging our operational platform built in prior years, we are increasingly realizing economies of scale, resulting in a gross margin tailwind of more than 200 basis points in 2024. These structural improvements were partially offset by external headwinds, including adverse channel and regional mix effects, ForEx impacts and an overall promotional environment. Our ability to deliver gross margin expansion despite these challenges speaks to the resilience and effectiveness of our operational strategy. Moving over to operating expenses. I am pleased to report that our rigorous focus on driving cost efficiencies led to a substantial reduction in OpEx growth during the second half of 2024. In particular, we placed a strong focus on maximizing marketing effectiveness, optimizing our retail cost structure and enhancing productivity with our global sales and admin functions by prioritizing spending in strategically relevant areas. As a result, underlying operating expenses in the second half, excluding the year-on-year impact of around €50 million in retail-related impairment charges, were up only 1% compared to the prior year period. This compares to the 6% increase during the first 6 months. On a reported basis, operating expenses grew 6% in 2024, while admin expenses remained broadly stable year-over-year, we recorded a 7% increase in selling and marketing expenses. The latter reflects higher retail expenses due to inflationary pressures, expansion-related costs and the higher retail-related impairments. At the same time, marketing investments came in slightly below the prior year level. This reflects our focus on marketing effectiveness by prioritizing high-impact brand initiatives. As a result, marketing investments amounted to 7.2% of group sales, aligning with our target range of 7% to 8%. Thanks to our enhanced focus on cost efficiency, the decrease in EBIT was limited to 12%, bringing EBIT to €361 million. Consequently, our EBIT margin stood at 8.4%, reflecting a decline of 140 basis points. On the other hand, EBITDA increased by 3% to €775 million, resulting in an increase of 10 basis points in EBIT margin to a level of 18.0%. Finally, net income after minorities declined 17% to €230 million, resulting in earnings per share of €3.09. Now let's turn to the balance sheet, starting with trade net working capital. I'm pleased to report a 9% improvement in trade net working capital on a currency-adjusted basis, driven by the efficient management of trade receivables and trade payables. At the same time, inventories remained broadly in line with the prior year. An increase in goods and transits towards year-end was compensated by lower inventory on hand compared to the prior year, reflecting our prudent inventory management. As a result, inventories as a percentage of group sales declined by 50 basis points to 24.9%, reinforcing our ongoing focus on optimizing inventory levels. Consequently, trade net working capital as a percentage of sales improved to 19.6%. Thanks to the working capital improvements and our focus on CapEx efficiency with investments down 4% year-over-year, we significantly accelerated cash flow generation in 2024. Overall, free cash flow reached €497 million, marking a substantial increase compared to the prior year. This development was supported by a strong fourth quarter performance and is clear evidence of the highly cash-generating nature of our business model. Looking ahead, we remain confident in our ability to continue generating significant free cash flows in 2025 and beyond. And while tailwinds from trade net working capital are expected to be somewhat lower than last year due to an expected gradual normalization of trade payables, we still anticipate robust free cash flow generation in 2025. Given our sound financial position and our confidence in the long-term growth prospects of HUGO BOSS, we are pleased to propose a dividend of €1.40 per share for fiscal year 2024. This represents an increase of €0.05 versus the prior year and underscores our commitment towards a progressive dividend. Consequently, at 45%, the payout ratio is at the upper end of our target range of 30% to 50%. This, ladies and gentlemen, concludes my financial review of financial year 2024. Let me therefore hand you back to Daniel for his remarks on our 2025 guidance.

Thank you very much, Yves. The key elements of our top and bottom line guidance were already disclosed in this morning's press release. Let me take this opportunity to put things into context. As we enter 2025, the final year of our CLAIM 5 journey, our commitment to driving profitability is stronger than ever. The solid foundation we have built over the past years gives us confidence to deliver but we are also fully aware of the external challenges ahead. As macroeconomic and geopolitical uncertainty are expected to remain elevated, we closely monitor future market developments. Therefore, just like in the second half of 2024, we will continue to focus on what we can control, leveraging the strength of our brands, sizing our growth opportunities and ensuring that our strategic investments remain backed by a relentless focus on cost efficiency. So let's take a closer look at our top and bottom line expectations for fiscal year 2025. Altogether and considering the macro headwinds will continue to stay elevated for the time being, we expect group sales in 2025 to be broadly in line with the prior year, ranging between €4.2 billion and €4.4 billion. At the same time, we anticipate robust profitability improvements as we expect EBIT in 2025 to grow between 5% and 22% to a level of between €380 million and €440 million. This, in turn, will drive an EBIT margin improvement to a level of between 9% and 10%, supported by our ongoing focus on driving additional sourcing and cost efficiencies. Given the highly uncertain global landscape, we approach 2025 with a cautious yet realistic top line assessment. The road ahead comes with several challenges that all pose tangible risk to consumer sentiment in 2025 from an uncertain recovery in China to macroeconomic pressure in key markets such as the U.S. alongside persistent geopolitical tensions and global trade uncertainties. Therefore, while our strong Q4 performance is encouraging, it cannot be seen as an indicator for Q1. The first quarter faces particularly tough comparison base and it's currently characterized by a further weakening of consumer confidence in key markets such as the U.S. and China. As a result, we expect a muted first quarter performance trending somewhat below our full year top line guidance range. In terms of our regional performance in 2024, we expect sales in EMEA to remain broadly on the prior year level. In particular, we anticipate political instability to continue to weigh on consumer sentiment in key European markets. At the same time, we remain optimistic in further expanding our footprint in emerging markets which remains a priority in 2025. For the Americas, we anticipate a low single-digit growth in 2025, following strong growth in recent years, driven by the successful implementation of our brand 24/7 lifestyle images. We now expect some degree of normalization, especially in the U.S. market. This is mainly due to currently softer consumer sentiment and the potential impact of policy shifts under the newly elected government which calls for caution. Finally, in the Asia Pacific region, we anticipate a moderate decline in sales. While Southeast Asia Pacific is set to continue to growth trajectory in 2025, we expect our business in China to continue facing headwinds due to lingering uncertainties around the country's economic recovery. Having said this, ladies and gentlemen, let me be very clear in saying that we remain confident in the strength of our 2 brands in our general ambition to keep delivering high-quality top line growth. With a range of exciting brand and product initiatives, we will continue to inspire our customers in 2025. In addition to our upcoming capsule collection with David Beckham, this includes a further push in our core assortment and footwear business, as well as our exciting activation of our license business later this year. So stay tuned. Irrespective of the macroeconomic uncertainties and political implications on top line growth, we remain confident in our ability to drive bottom line expansion in 2025. Our path to profitability improvements is built on 2 key levers

expanding our gross margin and driving further cost efficiencies. In 2025, we anticipate noticeable support from our gross margin, for which we expect further improvements. In particular, we will continue to leverage greater economies of scale in sourcing and to reduce our air freight usage even more. These initiatives will remain key contributors to our gross margin expansion, while external headwinds, including FX volatility may persist. Overall, we are confident in surpassing the 62% threshold for our gross margin over the course of this year. On the cost side, we will maintain our strong focus on driving cost efficiency. In particular, in brick-and-mortar retail, we will keep optimizing our store network, closely aligning rent-to-sales and pay-to-sales ratios with evolving traffic trends. We will also continue to tightly control admin costs with a careful assessment of nonbusiness critical projects and services. Last but not least, we will continue to improve our effectiveness in marketing, strongly focus on investments that drive engagement and loyalty to our brands. Altogether, these efforts will drive a target EBIT margin increase expected to reach between 9% and 10% in 2025. Ladies and gentlemen, before we move to the Q&A, let me conclude by saying that at HUGO BOSS, we remain fundamentally convinced about our long-term growth potential and we will continue to take advantage of future growth opportunities. As the macroeconomic environment remains volatile, we stay vigilant with regards to external factors and we will not drive top line growth at the expense of profitability. With ongoing financial discipline and a robust organizational setup, we are confident of structurally improving our EBIT margin in the long run. In 2025 and beyond, we remain focused on leveraging the potential of our company and driving long-term shareholder value. And this, we are now very happy to take your questions.

[Operator Instructions] Our first question comes from Susy Tibaldi from UBS.

So the first one, you mentioned you're seeing current trends that are weaker than the bottom end of your guidance. So less than minus 2. Can you provide a bit more color by region? And also what you're seeing in your key markets in Europe, such as Germany and the U.K.? Has there been any kind of softening trends since the start of the year? There's definitely some markets like the U.S. where it feels like things are getting a bit shakier. Anywhere else we're slugging? Secondly, on gross margin, you mentioned you expect noticeable support to deliver over 62%. Can you talk us a bit through the moving parts in a bit more detail? What's your FX assumption? And also on promotions, how do you account for the risk that, maybe if overall trends are a bit softer, we may see again a little bit of an uptick in promotions?

Thank you very much for your questions. So I may comment on the current trends where they're coming from. So we said during the presentation that we are below our low end of our guidance that we have given. So we see in the first 2 months of trading that we are trending at -- basically have a decline of mid-single digit and this refers predominantly to regions which are actually predominantly the U.S. and China. So we have to take several things here into consideration. First of all, I think the overall macroeconomic environment, the overall uncertainty overall in this world leads to actually lower consumer sentiment. Lower consumer sentiment predominantly leads to lower store traffic and this is what we are seeing in a lot of shopping malls, so to speak, that we finally have lower traffic, especially in the U.S. and also in China. And if you want to put our numbers into perspective, we have also taken into consideration that we have 1 day less in comparison to last year. There are some other effects that, for example, Easter is somehow later this year than compared to prior year. So this will lead to kind of shift in wholesale deliveries from Q1 into Q2. So there are several effects that you have to keep in mind when you are commenting on our numbers. And secondly, if you walk through the gross margin perspective, you have to keep in mind that we still see a lot of effects coming from sourcing efficiency as we have laid out during our presentation. You've seen that we have made almost 200 basis points in terms of sourcing efficiency in the year 2024. This is going to be prevailing in the year 2025 also. And another effect is that we continuously reduce our airfreight share. So this will go further down to a high single-digit number in terms of airfreight share. So these are 2 major components, I would say, self-help measurements that we are doing to get our gross margin up into the range between 62 and 64 percentage points going forward. ForEx, we perceive this to be rather neutral and the same is true actually for the promotional activity. I would still say that if we look at 2024 and if you would say on a scale between 1 and 10, I think the promotional activity was already at between 7% and 8%, so it was on an elevated level. And if this stays the same, it would have a neutral effect versus 2024. So we assume this to be neutral.

Okay, great. And can I just follow up on, in the European markets, if you can comment on anything you're seeing in Germany and the U.K.?

It's the same trend that we have seen all over the places. So I would stick to this global trend that I was alluding to overall. So slightly better than the U.S. and China.

The next question comes from Manjari Dhar from RBC.

I also had two, if I may. Firstly, I wondered if you could give any update on the wholesale forward order books and any sort of responses that you're hearing from your wholesale partners, maybe particularly around the upcoming David Beckham capsule? And then secondly, just on the loyalty program that's been launched, the new loyalty program in the U.K. and Germany. I wondered if you had any KPIs you could call out in terms of spending behavior and how that differs for a loyalty customer versus a non-loyalty customer?

Good morning, Manjari and thank you very much for your questions. So first one was related to the wholesale forward orders. First of all, let me remind you, because we are -- we still have to look a little bit at our 2024 numbers. So I'm really happy that we can report that we finalized the year with a plus 8% in wholesale, because this is a kind of multi-brand environment. And this is actually, from my point of view, a proof positive that we are really gaining market shares. And across the year, in 2024, I've said that we have order books of high single digit and we finalized the year with plus 8%. So we finally delivered on this. We were gaining market share with the wholesale partners and we are actually very happy with this kind of performance. And finally, we really delivered our preorders. I think this is also a very important message to keep. So if we now look into the year, our order book still looks -- we are very happy with our order books. And I think they are somehow stabilizing our business and they are around mid-single-digit order books that we have in terms of visibility for the next collections to come.

On XP that we implemented and successfully got feedback from where in the countries we implemented it, we actually were able to increase our customer base, our loyalty customer base by 25%. And significantly, the news on that is that also with the customers that went to our loyalty program, we could increase the turnover with those loyalty customers between 50% and 75% in more countries.

The next question comes from Frederick Wild from Jefferies.

First, a more general one. So when you think about the scenarios for the low versus the higher end of the guide, what sort of states of the world do you see? What are the puts and takes between that low end and the high end? It would be a bit helpful to understand your thinking there. And then even more generally and possibly a question more for Daniel, is on the capital allocation framework. Are you happy with how things stand? I mean, are you still thinking about adding another business into the mix at BOSS? Are you thinking about share buybacks? Just help us think about that broader strategic point going forward.

Yes. Freddie, thank you very much for your 2 questions. So definitely, I think it has been a kind of tough start to the year. And I would say, as we stand currently, this is all reflected within our guidance, so to speak. So we feel, for the time being, as the situation is today, we feel comfortable with our guidance from a lower and higher end. If things might improve over the course of the year, of course, we rather move into the higher end of our guidance. But I would clearly say, for the time being, it's very early to call. If I come to capital allocation, let me make some initial comments and then Daniel will jump in for the M&A question. So firstly, really, I want to point out that we had a strong free cash flow generation in 2024. We generated almost €500 million in free cash flow on a reported basis. Excluding IFRS, this was a cash generation of almost €250 million. So we improved our net debt position extremely. So we have just a net financial position of €78 million at year-end. So we are almost debt-free at year-end. So we really have a very strong balance sheet and we are operating out of a position of financial strength. And I think this is worth mentioning. And this led to the fact that we stick to what we have said to the capital markets to show progressive growth from a dividend point of view. So we increased our dividend, although our net income was decreasing by 17%. On top of this, if you look at our share price performance, Daniel and myself, we are convinced, as of today, that we, if you see what we have invested into with CLAIM 5, how we transformed the company, that we are perceived to be undervalued and we will not rule it out to do a share buyback in the course of the year with our financial strength that we are having.

Yes. And I would like to add, in terms of M&A, our strategy remains unchanged. As we said in CLAIM 5, we have so much potential in our business ourselves. And we are committed to exploiting our organic growth opportunity. As you know, we have implemented also the sub-brands. And as we can see that from BOSS Black to BOSS Orange to BOSS Green and the BOSS Camel, we are still gaining market shares. We're still expanding our presence in most of the department stores. If you think about womenswear business, the potential that we have there, shoes, accessories, so we have really still the potential of organic growth which we want to focus, especially in this environment that are currently out there. However, we see M&A also maybe in an opportunistic approach. So if something pops up, maybe we're going to look at it. But again, it's not our priority as we have so many potentials at the moment with our own brands.

The next question comes from Jurgen Kolb from Kepler Cheuvreux.

Two ones really. First one, just a technical one on number of stores. I noticed you reduced the number of stores in 2024 by about 11, the freestanding stores. Is that going to be the idea also going forward, 2025? Just this one here. And the second one, Daniel, you mentioned collections and here specifically womenswear again. Womenswear has now for quite some time remained about 7% of group sales. Is there in the next future any indication that this sales line here will go up dramatically and the share will increase. Is there any specific driver that you're seeing in your collection? Or is that rather to be expected to grow as the rest? Because at HUGO, for example, you certainly have been successful, that the share has increased with HUGO Blue, obviously. So that's been propelled. Is there anything in the making at womenswear?

I start with the store portfolio. I think we have increased our store portfolio to roughly about 500 freestanding stores. And we want to say, there are some opportunities to open stores and that's where we go in. But there is also a possibility to close stores, all those especially where are not performing to our satisfaction. So these we close. And at the same time, we open where we see opportunities and that keeps it more or less in the balance of opening the stores. Going forward, we continue to do that strategy. Maybe we shift also a bit more to franchisees. Maybe that is also derisking a bit the business. And we have quite strong demand also from customers to do more franchise stores. So I think with this on the table, these opportunities, you can -- I think our store portfolio freestanding stores will remain around of the 500. Now if I come to womenswear, yes, it's true. And we said we see big opportunities in womenswear and we started to completely change collections 3 years ago. We have improved results in womenswear. You can see, in 2024, we were growing roughly 3% to 4%. And it shows us also the implementation with BOSS Orange that we have good success, especially also in the U.S., where we actually gained space in big department stores. And that shows us that we are on the right track. However, I would like to underline that I always said, womenswear is not an easy business. We don't want to rush into something. We want to build it in a sustainable way and we want to build it with not too many mistakes, we'd rather go better before we go bigger. And therefore, we are on track with womenswear. We learn out. We don't want to rush into it but it remains also for the future a very -- a big opportunity for our brand.

Very good. Understood. And thanks, Daniel, for helping with the math. Of course, you increased the number, not decreased. Thanks very much for that.

The next question comes from Michael Kuhn from Deutsche Bank.

Two from my side as well. Firstly, on HUGO Blue, there, you mentioned it had about a high single-digit sales share in overall HUGO which was up 5% which implies that HUGO Red was down slightly. Was that more kind of an overall market reflection? Or did you see some elements of cannibalization between Blue and Red as well? And did that have any impact on profitability? And then once again, on own retail, you had like-for-like sales down 8% last year but with an improving trend in the fourth quarter. What have you baked in the guidance in that regard? And what, let's say, would be the impact on profitability for different like-for-like sales growth scenarios, because that is obviously an important factor?

HUGO Blue, we are very pleased with the start of HUGO Blue, adding, first of all, also a younger customer base to our portfolio. It's already today, in that short period, it's roughly presenting between 8% and 10% of the total HUGO turnover. So we are on track actually with HUGO Blue. Also there, we want to expand it in a careful way, not rush in terms of distribution. We want to build it sustainably. But therefore, with men's and women's, we are pleased with the numbers that we show there. In Red -- and by the way, HUGO Blue is also where we push it internationally. That means on all regions from the U.S. to Europe, also in Asia, we see there are big opportunities. In HUGO Red, we had to shift slightly the collection. We see that the demand for young tailored-wear is increasing. And actually, we see there a big opportunity and make it less jeans driven than the HUGO Blue, that it is not cannibalization -- cannibalizing it. And therefore, we adjusted a bit the collection. But also there, it's probably more DACH driven, Germany, Austria and Switzerland results are positive, especially in men's. And we continue with that strategy that we put in place and nothing to change, just continue to drive.

Thank you very much, Daniel. And Michael, regarding your question regarding own retail. So actually, we were quite happy with our Q4 performance because we ended with like, let's say, plus 2% in Q4 for retail brick-and-mortar. So our assumptions for 2025 are to stay around stable in comparison to 2024. These are our assumptions.

And maybe just one as you're now in the final year of CLAIM 5, do you plan a Capital Markets Day anytime soon?

We are, for sure, planning a day and we aim to do that in the second half of the year.

The next question comes from Louise Singlehurst from Goldman Sachs.

Just stepping back on a couple of comments already made. I wondered if you could help us think about that traffic versus conversion. Obviously, it's very clear across the brands and particularly those which have been outperforming. The traffic was weak last year but you had a very good conversion. Is that true across all regions? Anything to really pick out? And in terms of the full year '25 outlook, can you just help us think about how your assumptions are for the traffic conversion relationship? That would be very helpful. And then my second question, I noted you talked about focusing on the controllables which is a very sensible point to remind us of. Of the minus 2% to plus 2% organic growth, can you just talk about the contribution from space? And within that, also the opportunity for new space within the wholesale arena. So not just within the retail format that you've also -- I know you've talked about the retail space on this call and anything from ASP mix. Is there an opportunity to think more about the ASP mix, maybe even lowering it to drive a bit more volume?

I'll take the second question first on space and pricing. So 2 assumptions. One is, we only talk about volume. So we have not incorporated any price increases within our guidance, point one. And point two is regarding space, to really, really simplify it, I think, space is around being stable. So actually, it's more on a, you would call it, on a like-for-like basis. So this is what you can include in your assumptions. And when you look back in terms of the retail performance, there has been a kind of logic between traffic being down, conversion being up and net sales per transaction being up as well. So if you look at these different components, they made it up then at the end with our retail performance that we have shown. So still slightly maybe on par, so traffic down, whereas conversion and net sales per transaction were up. And the same assumptions apply actually for the year 2025 in our assumptions also.

Can I just ask on the wholesale expansion? Because presumably, there is some wholesale network expansion which would help given LatAm and other markets as well as the core, just to clarify.

Yes. Also on the wholesale piece, I would not assume that the space effect is tremendously high. On the other side, we have to say, we have now -- I think it's important to mention, under the wholesale number, you see around 390 franchise mono-branded stores. So we added in the year between 30 and 40 franchise stores. And I think we will add another 20 to 30 stores also in the year 2025 but nothing that is really like calling out that this had a tremendous effect on the wholesale spares overall. But we will continue to invest into franchise partners, especially in emerging markets.

The next question comes from Andreas Riemann from ODDO BHF.

I also, like Jurgen did, accounted the retail POS. And I actually saw that in Americas, the number of retail POS is up 120 or 27%. So can you shed more light on that development? And then about space again, is it then fair to assume that space will at least be a positive contributor to growth in Americas? That would be the first topic. And the second one on growth in general. I understand that it's difficult to grow at present. But at one point, I guess, you have to push for more growth. So when you look at the current product range, BOSS, HUGO, formal wear, casual wear, where do you see the biggest opportunity to extend the offer to launch new products? This would be my second topic.

So in terms of distribution, where we see the opportunities? I think there's a big opportunity or wide opportunities in all the regions. I think with our clearly selective distribution we have in place, we also don't want to expand in any distribution that is discount driven. So we have quite a good and a strong distribution in place where we carefully can expand shop-in-shop opportunities and that is happening especially in the States from all the lines, no matter if it is HUGO or BOSS, men's and women's, opportunities arise there. And again, we don't want to push. We have a long-term vision on how we build the brand. And therefore, we don't want to rush into just for the sake of expanding. It has to, we expand but we want to increase in a qualitative way. And therefore, we don't want to compromise on our selective distribution and we also don't want to compromise with our product. By the way, I want to say that our sales, I just wanted to add that before, is, on all the lines, quite high and that shows and underlines again that we are successful and show a solid and robust forward order book in wholesale. And maybe on top of that if I add, we have, with the bodywear launch that we do at the moment in menswear with David Beckham, have also started in a very strong way. There is also never a push from our side which is new but also product opportunities like shoes, where we go into hero item products which is the Gary which we have same style in different qualities to a very high average price. It is not only in retail but also in wholesale gaining market shares. And then the performance tailoring also, since we launched that, continues to be a very strong asset. So you can go in all the brands, you can go in all the lines, we see always opportunities, some are going faster, some are going slower but there is still lots of product growth opportunities on the way.

Great. Perfect. Thank you, Daniel. Thank you, Yves. And ladies and gentlemen, this actually completes our conference call for today. We are running out of time. I do thank you for your interest and thank you for dialing in. I realize there are still a few people that didn't manage to ask questions. I will reach out to all of you, of course, as we always do. So, thank you very much for joining us today. Wishing you a great afternoon and thanks very much. Bye-bye.

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