Last update on 2024-06-07

Hugo Boss (BOSS.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Analyze Hugo Boss (BOSS.DE) with the Piotroski F-Score for 2023. Final score: 7/9. Assess financial health, profitability, liquidity, and operational efficiency.

Short Analysis - Piotroski Score: 7

We're running Hugo Boss (BOSS.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Hugo Boss (BOSS.DE) has a Piotroski F-Score of 7 out of 9, reflecting a strong financial position. The company demonstrates strong profitability with a positive net income of €258.37 million in 2023 and robust cash flow from operations of €393.64 million. The Return on Assets (ROA) has grown from 0.0715 in 2022 to 0.0783 in 2023, indicating better asset utilization. The operating cash flow is significantly higher than net income, which is a healthy sign. On the liquidity and leverage side, Hugo Boss's leverage ratio increased to 0.271 in 2023 from 0.2218 in 2022, which shows increased financial risk, a negative aspect in Piotroski scoring. Meanwhile, the current ratio improved to 1.643 in 2023 from 1.3338 in 2022, highlighting better short-term liquidity. The number of shares outstanding dropped to zero, which is atypical and requires further investigation. Operationally, the gross margin slightly decreased in 2023 to 0.6149, scoring zero in this criterion. However, asset turnover ratio increased from 1.2458 in 2022 to 1.2723 in 2023, showing improved sales efficiency per asset.

Insights for Value Investors Seeking Stable Income

Based on the analysis using the Piotroski Score, Hugo Boss (BOSS.DE) presents a strong financial health, with a score of 7 indicating it is a potentially undervalued investment with minimized financial risks. While there are positive signs in profitability, cash flow, and asset utilization, the increase in leverage and the unusual drop in share count to zero are concerning. Therefore, it is worth looking into Hugo Boss as an investment, but further investigation into its leverage situation and share structure is advisable before making a decision.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Hugo Boss (BOSS.DE)

Company has a positive net income?

Net income refers to the profit a company has made after all expenses and taxes have been deducted. A positive net income is a strong indicator of financial health.

As of 2023, Hugo Boss (BOSS.DE) has a net income of EUR 258,371,000. This is a positive figure, which indicates that the company is profitable and has performed well in generating earnings after covering all its expenses and taxes. Over the past two decades, the trend has been somewhat volatile, with notable dips in challenging years like 2020, where the company reported a net loss of EUR -219,593,000. However, the recovery to a positive net income in subsequent years underscores resilience and effective management strategies. This positive trend is a favorable signal for investors, and for the Piotroski Analysis, it earns Hugo Boss a full point, contributing to a stronger ranking. Overall, a positive net income serves as a testament to the company's profitability and operational efficiency.

Company has a positive cash flow?

One of the initial checks in Piotroski Analysis is the company's Cash Flow from Operations (CFO). The CFO signifies the cash a company generates from its normal business operations. A positive and robust CFO is an indication of good operational efficiency and sound financial health.

Hugo Boss recorded a Cash Flow from Operations (CFO) of €393.64 million in 2023. This is a positive cash flow, indicating that the company has successfully generated a substantial amount of cash from its regular business activities. Historically, Hugo Boss has mostly maintained a positive CFO over the past 20 years, with significant fluctuations. For example, while there was a remarkable high in 2019 with €651.72 million, 2023’s figure represents a recovery compared to the €357.26 million in 2022. Thus, per the Piotroski criteria, Hugo Boss earns 1 point for its positive operating cash flow.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's profitability in relation to its total assets. A higher ROA indicates more efficient asset utilization.

The ROA for Hugo Boss increased from 0.0715 in 2022 to 0.0783 in 2023, reflecting an improvement in utilizing its assets to generate profit. This increase of approximately 0.68 percentage points is a positive trend, adding 1 point to the Piotroski F-Score for Hugo Boss. The long-term trend of operating cash flow shows a mix of variability, which seems less consistent when compared to the industry median ROA that has shown relatively stable growth until recently. Although Hugo Boss' ROA is still significantly below the industry median of 0.5464 for 2023, this incremental improvement is promising.

Operating Cashflow are higher than Netincome?

Explain the criterion for Hugo Boss (BOSS.DE) and why it is important to consider.

Operating cash flow (OCF) higher than net income is a vital criterion in the Piotroski score, emphasizing a firm's ability to generate sufficient cash flow to fund its ongoing operations. For Hugo Boss in 2023, the OCF stood at €393.64 million, overshadowing the net income of €258.37 million. This disparity at 1.52 times suggests a robust financial health where cash operations strongly support the company's profitability. Over the past two decades, Hugo Boss has exhibited a commendable operational cash flow trend, barring a few irregularities in economic downturns. This consistency underscores a robust and possibly improving business model and operational efficiency. Currency turn. This figure will gain a point, fueling a better Piotroski score, thus flagging Hugo Boss as potentially undervalued with minimized financial risk.

Liquidity of Hugo Boss (BOSS.DE)

Leverage is declining?

Change in Leverage indicates whether the company's financial risk associated with its debt levels is improving or worsening.

In 2022, Hugo Boss (BOSS.DE) had a leverage ratio of 0.2218, which increased to 0.271 in 2023. This represents a deterioration in the company’s financial risk profile, as higher leverage means the company is using more debt relative to its equity. Reviewing a historical context over the last 20 years for Hugo Boss, leverage initially remained at zero until 2010. Since then, leverage has shown some fluctuations, reaching its peak in 2020 at 0.3287 before slightly declining, then increasing again in 2023. This trend is a negative signal within the Piotroski analysis, resulting in a score of 0 for this criterion. The increasing leverage trend continues to highlight potential financial risk and dependency on debt to fuel growth or operational needs.

Current Ratio is growing?

Current Ratio indicates a company's ability to pay short-term obligations. A higher ratio suggests a stronger liquidity position.

Hugo Boss's Current Ratio has increased from 1.3338 in 2022 to 1.643 in 2023, outpacing the industry median of 1.64 for 2023. This improvement signals a rising ability to meet short-term liabilities. Historical data reveals fluctuating current ratios, peaking at 2.3292 in 2008. The increase in 2023 adds 1 point.

Number of shares not diluted?

Change in Shares Outstanding reflects how the number of a company's shares available in the market has evolved. A reduction in shares can indicate share buybacks, which often signal management's confidence in the company's outlook.

For Hugo Boss (BOSS.DE), the outstanding shares decreased significantly from 69,016,167 in 2022 to 0 in 2023. This decrease would typically result in adding 1 point according to the Piotroski analysis. However, the disappearance of shares to 0 in 2023 is highly unusual. This could imply corporate actions such as a delisting, merger, or another extraordinary event rather than regular buybacks. Therefore, further investigation is required to understand the underlying factors behind this change. According to the Piotroski criterion, this trend would be considered good and add 1 point, but caution should be exercised given the unusual nature of this data.

Operating of Hugo Boss (BOSS.DE)

Cross Margin is growing?

Change in Gross Margin: Compare the Gross Margin of a company and note its direction. An increasing Margin is positive as it indicates better profitability.

For Hugo Boss (BOSS.DE), the Gross Margin slightly decreased from 0.6179 in 2022 to 0.6149 in 2023. This change represents a 0.003 decrease. According to the Piotroski F-score criterion for Gross Margin, this results in a score of 0 as an increased margin is preferred, indicating better profitability and cost efficiency. The surrounding historical data suggests that Hugo Boss' Gross Margin has been generally higher than the industry median in recent years, but this slight decline from 2022 to 2023 marks a minor step back in efficiency. Thus, for the Piotroski scoring, no point is awarded for this criteria for 2023.

Asset Turnover Ratio is growing?

The change in Asset Turnover measures the efficiency with which a company uses its assets to generate sales. It indicates how well management is using assets to produce revenue.

Comparing the Asset Turnover ratios, Hugo Boss (BOSS.DE) showed an increase from 1.2458 in 2022 to 1.2723 in 2023. This improvement suggests that the company has become more efficient in utilizing its assets to generate sales. For the Piotroski Analysis, this increasing trend adds 1 point, indicating a positive direction in asset management efficiency. Historically, Hugo Boss had experienced variances in its Asset Turnover, peaking at 1.626 in 2014 and dipping as low as 0 in the early 2000s. The upward trend in recent years signifies a recovery and enhancement in operational efficiency, reflective of strategic asset utilization.