Dear ladies and gentlemen, welcome to the Hugo Boss first quarter 2021 results conference call. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions via the telephone lines. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Christian Stoehr, Vice President, Investor Relations, who will lead you through this conference. Please go ahead, sir. Yes. Thanks very much, good morning, ladies and gentlemen. Welcome to our first quarter 2021 financial results presentation. Today's conference call will be hosted by Yves Müller, CFO of Hugo Boss and spokesperson of the managing board. Before we get started, allow me to recall that all revenue-related growth rates will be discussed on a currency-adjusted basis unless otherwise specified. Let me also remind you that during the Q&A session, we kindly ask you to limit your questions to a maximum of two to allow everybody to ask his or her questions. Let's get started and over to you, Yves. Thank you, Christian, and good morning, ladies and gentlemen, and thank you very much for your interest. In the next 20 minutes, I will elaborate in detail on our operational and financial performance during the first three months of fiscal year 2021. I will also outline our broader expectation for the remainder of the year and for Q2 in particular, notwithstanding that the environment we are operating in remains uncertain for some areas of our business. From our quarterly statement earlier this morning, I'm sure you have noticed that we have seen a solid and promising start to the year, both from a top-line and bottom-line perspective. This is even more worth mentioning as we had to cope with the ongoing implications of the pandemic during the first quarter, especially when it comes to our home territory, Europe. Therefore, let me start by reviewing some of the key developments we have observed around our top line in Q1. Starting with a quick look at our store closing rate. With an average of around 25% of our global store network being affected by temporary closures in the first three months of 2021, the lasting implications of the pandemic continued to put a strain on our brick-and-mortar business. This was particularly true for Europe, by far our largest region, where the store closing rate remained elevated at a level of almost 50%. Unsurprisingly, the performance of key markets such as the U.K., France, and Germany remained muted in the context of persisting lockdowns. Against this background, I am all the more encouraged by the further progress we have made in those markets where stores have already reopened and where we are witnessing gradual improvements in the overall retail environment and consumer spending, supported by a strong rebound in local demand. First and foremost, this includes a number of markets in Asia-Pacific, such as mainland China, Australia, and Taiwan, but also in the Americas region, and here in particular, our important US business as well as Latin America. In addition, markets like Russia and the United Arab Emirates are also progressing strongly with their overall business recovery following the COVID-19 restrictions. I am also pleased to report that momentum has further accelerated along our strategic initiatives. In particular, growth in our online channel has strongly accelerated, with revenues up 72% in Q1 and our casual wear offerings for both brands, BOSS and HUGO, have meanwhile returned to growth. As a consequence, we were able to limit the overall sales decline to only eight percent, with group sales amounting to EUR 497 million in the first quarter. While this represents a further noticeable pickup in our overall business recovery as compared to previous quarters, let me also be clear that the first quarter benefited to some extent from wholesale delivery shifts related to our spring/summer 2021 collections, something I will elaborate in more details in just a few minutes. Before we do this, let's take a closer look at our geographies. Starting with Europe, where the lasting implications of the pandemic continued to weigh on our business, resulting in an overall sales decline of 17% in Q1. In addition to far-reaching temporary store closures, persisting social distancing measures and travel restrictions continued to limit the region's overall recovery. This was particularly visible for markets such as the U.K. and Germany, which both recorded mid-double-digit sales declines in own retail, reflecting the majority of our brick-and-mortar stores being closed throughout much of Q1. While France and the Benelux countries were able to limit their sales decline in own retail to the low double-digit range, I am pleased to report that several markets in Eastern Europe returned to growth in the first quarter. This was particularly true for our business in Russia, with comp store sales up mid double digits. We also enjoyed very strong momentum in the Middle East, as reflected by low to mid double-digit comp store sales growth. Moving over to our European wholesale business, which was up 6% in the first quarter. Now, as I already mentioned a minute ago, this development mainly reflects the robust order intake for our spring/summer 2021 collections, which were delivered to partners during the course of Q1, as well as shifts in the delivery of these collections. Let's now move over to the Americas, where the gradual business recovery, which started in the middle of 2020, has seen a further continuation also in the first quarter of 2021. Thanks to strong sequential improvements in our U.S. business as well in Latin America, the region's overall sales decline was limited to minus 11% in Q1. In the U.S. market, sales declined by 11% only and thus considerably less than in previous quarters. This development was driven by a noticeable pickup in local demand, reflecting a robust rebound in consumer sentiment. While our stores in and around important metropolitan areas such as New York City, Chicago, L.A., and San Francisco were still impacted by the lack of international tourism and the ongoing absence of commuting to and from work, a rebound in local spending helped many of our destinations in states such as Florida and Texas, but also in smaller urban shopping centers to return to growth. Let's complete the pictures of the Americas with a brief look at Canada and Latin America. Revenues in Canada were still down by a low to mid-double-digit percentage rate in Q1, reflecting lasting store closures in the wake of the pandemic, in particular in the province of Ontario. On the other hand, sales in Latin America returned to pre-COVID-19 levels, led by a strong recovery of our business in Brazil and Mexico. In APAC, too, we successfully continued our gradual business recovery with revenues up 39% in the first quarter. This development was primarily driven by mainland China, where sales growth further accelerated to 98%, reflecting ongoing robust local demand and the successful execution of Chinese New Year in February. Compared to the first quarter of 2019, revenues in mainland China were up 29%. Apart from mainland China, also some of the region's smaller markets saw sequential improvements. While Japan limited its sales decline to the mid-single-digit range, markets such as Australia, South Korea, and Taiwan even returned to double-digit growth, supported by a strong pickup in local demand across all store formats. In other markets, such as Hong Kong or Singapore, the ongoing lack of international tourism continued to weigh on the overall business recovery. Let's now turn to our sales channels, starting with our own online business, which recorded its 14th consecutive quarter of strong double-digit growth. With sales up 72%, momentum further accelerated in Q1, driven by strong double-digit improvements at both hugoboss.com as well as at multi-brand websites operated in the concession model. The former benefited from strong double-digit increases in both traffic and conversion, as well as the further geographical expansion of our flagship hugoboss.com over the last 12 months. In the first quarter only, our digital offerings were expanded into 12 additional markets, including South Korea, Russia, and the United Arab Emirates, thereby increasing our global online reach to 59 markets. As we are committed to fully exploiting the tremendous potential of.com in the years to come, further rolling out our digital offerings across the globe remains on top of our agenda. In this context, the next wave of new markets to be entered into is already scheduled for later this year. The strong acceleration in online sales growth partly compensated for lower revenues in brick-and-mortar retail, which were attributable to the negative implications of the pandemic and the corresponding store closures in particular. Overall, revenues in own retail declined 14% in Q1 as compared to minus 24% recorded back in Q4. Wholesale, on the other side, returned to growth, up one percent in the first three months of the year, supported by the aforementioned order intake for spring/summer 2021. In addition, our wholesale business benefited from shifts in the delivery of these collections from the second quarter into the first quarter, aimed at ensuring product availability after the lifting of lockdowns. Now, excluding these delivery shift effects, wholesale revenues would have declined at a low teens rate in Q1 and thus broadly similar to the overall performance recorded in own retail. Speaking about wholesale, I would like to point out that we expect rather more normalized delivery patterns for the remainder of the year. That said, it will be quite difficult to compare this year's delivery schedule with the prior year period, given the severe disruption we were facing in 2020 following global lockdowns throughout most of the year. Also, our licensed business recovered during the first quarter. With revenues up five percent, we recorded a solid rebound in revenues generated from the sale of watches and eyewear. On the other hand, our fragrance business still remained below the prior year level as it continued to suffer from the lasting lockdowns in Europe as well as an overall soft travel retail business. Moving over to our performance by brand, where the positive momentum around our casual wear business continued in Q1. Overall, casual wear sales, which as you know, account for around 50% of group revenues, returned to mid-single digit growth in the first quarter. Sales for the BOSS brand were down eight percent in total, with revenues for BOSS casual wear up at low single digits. The latter benefited in particular from robust demand across all leisure wear categories, as well as the strong sell-through of our two latest capsule collections, co-designed with the NBA and the sportswear brand Russell Athletic. Also at HUGO, our casual wear business recorded sequential improvements with sales up double digits in Q1, thereby partly compensating for a decline in formal wear sales. Overall, sales for HUGO still remained six percent below the prior year level. Now before moving over to the bottom line, let me shed some light on our Russell Athletic and NBA collaborations, with both kicked off very successfully during the first quarter. There is no doubt that collaborations like these will not only help us in driving brand desirability, but they will also further strengthen our positioning and credibility within the important casual wear segment. Starting with BOSS x Russell Athletic, which was officially launched via a digital event at the end of March. A diverse range of high-profile celebrities and influencers, ranging from American model Bella Hadid and Ashley Graham, to German NBA player Dennis Schröder, created tremendous excitement and awareness for the street style inspired capsule, in particular on relevant social media channels. For example, on Instagram, we saw a sharp increase in brand awareness and engagement with more than 10 million total campaign impressions and a strong engagement rate of over 10%, resulting in more than one million interaction with our BOSS brand as part of the campaign. Speaking of engagement, our partnership with Russell Athletic and our strong focus on street style also help us to gain relevance and drive interaction with younger generations such as Gen Z and millennials. In particular, in digital, we have witnessed a growing number of young customers making their first purchase ever at hugoboss.com. As a result, several styles and sizes were sold out within only a few hours as demand for the logo-inspired hoodies, sweaters, shirts, and pants exceeded even our own high expectations. To conclude on our Russell partnership, also from a commercial perspective, the co-created collection has quickly proven to be a great success. Through our digital-first approach and our strong focus on.com and social media, sell-through rates in online have been three times higher as compared to other collections since the official start on March 24th. In mid-February, we also launched our first BOSS x NBA capsule in the Americas, with particular emphasis on our U.S. market. With more than 10 weeks on the shelves, feedback has been extremely positive across all channels, with sell-through rates almost three times higher than usual. Also here, the collection has been particularly well-received by younger customers, in particular with more than 50% of all customers aged 35 years and below. Feedback was also promising from key U.S. department stores, which also recorded strong customer demand for the street style inspired pieces. Following a very successful activation at the point of sale in close collaboration with our partners. Our collaborations with both the NBA and Russell Athletic will play a crucial role also in the coming months, as we are committed to further growing and strengthening our casual wear business. In this context, I'm excited that the second wave of new product drops is already in the pipeline and ready to hit the shelves during the second half of this year. Ladies and gentlemen, this concludes my comments on the top-line development. Let's take a closer look at the remaining P&L items for Q1. Starting with the gross margin, which totaled 60.4% in the first quarter. The decline of 250 basis points is mainly related to ongoing elevated markdown activity, in particular in those markets that are still being impacted by the pandemic. In addition, a less favorable channel mix reflecting the outperformance of wholesale over retail, as well as higher freight costs weighed on the gross margin development. Moving over to the operating expenses, which declined by 17% in Q1. In light of the persisting negative implication of COVID-19 on key European markets in particular, we continued with our tight cost management approach. In this context, we once again put particular strong emphasis on reducing selling and distribution expenses, down 20% in Q1. This development was largely driven by additional rent and payroll savings in all retail, with the magnitude of both effects being quite comparable. We also managed to cut back 10% on general admin costs, reflecting ongoing tight overhead cost controls, which led to lower personal expenses. Overall, the implemented cost savings compensated for the decline in sales and gross margin. As a result, and despite the negative implications of the pandemic, I am very pleased to report that we were able to record an operating profit also in the first quarter, with EBIT amounting to plus EUR 1 million compared to minus EUR 40 million in the prior year period. I have already mentioned the positive impact that delivery shifts had on our top-line development in the first quarter. For the sake of transparency, it is only fair to say that this effect also supported our bottom-line development in Q1 to some extent. Let's now turn to the balance sheet, starting with trade net working capital, which declined by seven percent versus the prior year. An increase in trade receivables, mainly reflecting the growth of our wholesale business in the first quarter, was more than compensated by higher trade payables. At the same time, our inventories remained stable year-over-year, first and foremost, due to the ongoing tight inventory management in the wake of the pandemic. Moving over to capital expenditure, where we continued our rather prudent approach in the context of the pandemic, also in Q1. Investments totaled EUR 60 million and were thus slightly below the prior-year level. As in previous quarters, investments were primarily related to our global store network as well as our worldwide IT platforms. Free cash flow totaled minus EUR 30 million in Q1, which compares to minus EUR 86 million recorded in the prior-year period. To finish on our financial position, net financial liabilities decreased five percent to EUR 221 million when excluding lease liabilities in the context of IFRS 16. Now, ladies and gentlemen, before opening the floor to your questions, allow me to briefly comment on our expectations for the remainder of the year. Despite ongoing short-term uncertainties related to extended lockdowns in key European markets, we remain confident that the global retail environment will continue to gradually improve, supported by the further progress of global vaccination campaigns and the gradual lifting of lockdowns and restrictions on public life. We also remain confident that our business will continue to recover noticeably, especially in the second half of the year. While the further recovery will be led by Asia-Pacific and the Americas, momentum in Europe is also expected to accelerate strongly in the coming quarters. Today, we are already experienced local demand picking up in those markets where lockdowns and restrictions have been eased. The prime example in this regard is our important U.K. market, where stores reopened in mid-April and where local demand has seen a robust uptick since then. This has enabled several of our more than 100 retail points of sale in the U.K. to exceed pre-pandemic sales levels in the past weeks. While underlying local demand remains strong for our casual wear business, we have also started to witness some first pent-up demand around smart tailoring product categories. Now, make no mistake, while several markets are clearly showing some encouraging signs of a turnaround, in the short term, our retail business in markets such as Germany, France, and Canada continues to be impacted by ongoing lockdowns and corresponding store closures. Since the beginning of the second quarter, we continue to be confronted with a global store closing rate of more than 20%, something we could not foresee when we spoke back in March. In addition, we must not forget that the delivery shift that I alluded to earlier will also weigh on our wholesale performance to some extent in Q2. All this being said, and assuming that no lockdowns or substantial extension of current lockdowns beyond what is already known will be implemented, we are very confident that sales in the second quarter will almost double those of the prior year period, which, as you all know, was severely impacted by the global spread of COVID-19. In terms of our bottom-line expectations for the second quarter, we remain confident that we will be able to generate a positive EBIT also in Q2. While our EBIT should continue to benefit from the further business recovery and ongoing tight cost management, the lasting lockdowns in some European markets, as well as the wholesale delivery shift, will most likely limit our bottom-line potential in Q2 to some extent. Finally, ladies and gentlemen, let me remind you that in less than four weeks from now, our managing board will be complete. As I'm sure you are all aware, Daniel Grieder will take over his role as the new CEO of Hugo Boss on June first. Together with Daniel, the entire managing board is looking forward to entering a new era for our company. Both our brands, BOSS and HUGO, offer tremendous potential for long-term growth, and we are fully committed to exploiting this great potential together with all Hugo Boss employees worldwide in the years to come. In this context, we will provide you with a strategic update on our journey for the next several years during the second half of 2021. With this, I'm now happy to take your questions. Thank you. Your first question is coming in from Chiara Battistini from JP Morgan. Please go ahead. Good morning. Hi. Thank you for taking my questions. I have three, please. The first one is maybe on your guidance on Q2 and the outlook of almost doubling sales in the quarter. How should we be reading this almost doubling sales? Is it like, I don't know, 95% to 100%? Is it like 80% to 100%? Can we narrow down a little bit how to think about this outlook, please? My second question is on the order book for autumn/winter. The comments on the spring/summer are very encouraging. I was wondering, as you are collecting the orders for the autumn/winter, if you could give us an update on what you're seeing from your retail partners for the second half of the year. Possibly any color by region from that point of view would be also very helpful. Finally, I was wondering if you could give us any color or any comments on what you've been seeing of late in China since the end of March when all the situation with the cotton sourcing emerged, please. Thank you. Yes, good morning, Chiara. Thank you very much for your questions. I noted three questions overall. You were saying, give me some more color regarding our, let's call it Q2 net sales guidance. Yes, we clearly say almost double. This means that you should take the last year's performance and take it times two, and almost double means that with times two, we see this as a kind of ceiling. An almost means that we are close to this. Whatever your fantasy gives us, this will come with this. Of course, please be aware that we still have ongoing uncertainties, especially in Europe with the extended lockdown. That's the reason why we are a little bit vague there. This is, I think, the best guidance we could give for Q2. Regarding the order book, back in March, we were close to finalizing our fall/winter collection. That was the collection that's going onto the sales floor beginning in July. We've reported back in March that we were very satisfied with the order intake. That was above our own expectations and was back on pre-COVID levels. Right now we are selling actually our smaller pre-spring collections, and I think it's too early to make any comments on the pre-spring collections. What I can say overall is, these things that we do on the product side, on the collection side, and you have seen our wholesale business picking up as well in Q1. You see that there's interest in our business partners, especially when it comes to these collaborations. We see really positive movements regarding that our collections resonate well with our partners. Finally, your question was related to China. We have seen a performance in China. If you take the Q1, I think we were saying we doubled our net sales in Q1. I think we all know that, of course, Q1 2020 was clearly affected by the pandemic. The performance was plus 29% versus 2019. I can assure you, if I look at my numbers for the month of April, that we are clearly keeping this momentum in China. Great. Very clear. Maybe just if I can follow up on wholesale. Any different performance, I guess, in Europe versus the U.S. that you're seeing at the moment? Are you seeing similar momentum in both regions, please? Yes. The wholesale business in APAC is fairly small. If you take the big regions, Europe and U.S., we saw a similar development. Both regions are picking up. Great. Thank you. The next question is coming from Jürgen Kolb from Kepler Cheuvreux. Please go ahead. Yes. Thank you very much, gentlemen. Three questions, maybe. First of all, on the number of stores. Yves, I noticed that the number of factory outlet stores keeps on going up, and has reached now, if I calculate that correctly, about 17.7, so almost 18% of your total store base. In Asia, I would have expected maybe to see some more store openings, as this has been the plan, if I'm not mistaken. I was wondering maybe if you could share with us additional thoughts on the number of store openings from a general perspective and specifically on Asia, and obviously with respect to the factory outlets. Secondly, you mentioned very strong performance, the online business. Maybe some additional indications, not necessarily precise numbers, but just in terms of conversion rates and customer retention and new customers, what you've seen there would be helpful. In this wake, obviously, is it possible to give us a kind of adjusted growth excluding the 12 new countries? The last one, NBA and the Russell capsules have done marvelously, super apparently. I was just wondering if you could share some thoughts on the next wave of collections in the second half that you're planning to launch. Is that going to be the same volume, the same size, or even bigger maybe? Maybe going into 2022, since you've been so successful with NBA and Russell. What's in the making? You having any additional ideas? You want to keep on this capsule strategy, maybe with bigger volumes since you've been so successful so far? These are the three questions. Thank you. Yes. Good morning, Jürgen. Thank you very much for your questions and thank you very much for your interest. First of all, touching the overall numbers of stores you were pointing out in general. What I can say, yes, in general, what we want to do is clearly, strategically, the numbers of stores will remain more or less stable, but clearly there will be a geographical shift from Europe brick-and-mortar business and U.S. brick-and-mortar business to Asia, in particular mainland China. In the next quarters and years to come, you will see that the number of stores, shop-in-shop outlets will decrease in the European and American areas and we will grow in Asia, in particular in mainland China, which will make that overall the number of stores will remain stable. Actually, the short-time increase with the outlets you're referring to in specific comes from actually that we, because of the pandemic, that we were entering into short-term temp outlet deals and they were somehow recorded in our numbers. That was the driver actually of the increase in the outlet. The second question was related to the online performance. First of all, I think it's important to know that the.com business and concession business, it accounts for 60% and 40% respectively. 60% is hugoboss.com, point one. We have seen very strong like-for-like performances above all business. They were above 50% in the like-for-like countries and in the concession partners. Very strong business. Actually, that was coming from traffic and conversion rate both. That was actually a kind of amplifier. The traffic was up double digit and the conversion rate was up double digit as well. This gave us, that was the major driver actually of the business performance. Actually on top of this, which was very encouraging, is that even the average basket was increasing because we were doing more full price sales than discounted sales in comparison to prior year period and we perceive this to be actually a strong underlying for both brands, BOSS and HUGO. Actually, the 12 new countries that we entered to was at the end of March, so they didn't have any big financial impact for the Q1 results. It's just more to come. I think this is what we always said. We said we have to lay big emphasis on our online business in the next months to come. Perhaps one additional remark I want to make here as well, because I think the wholesale performance in Q1 was somehow surprising overall with plus one percent. Of course, there have been several effects. One was actually a very robust, strong order intake for the spring/summer collection, which we perceive as good. Secondly, we're pointing out, of course, there were these kind of delivery shift effects from Q2 and Q1. We are saying that this effect has an impact of around 20 million EUR-25 million EUR. Actually, these products were requested by our customers from the wholesale part because they were saying, "Please send us the products because we don't know once the lockdown is released. We want to have a kind of readiness to sell our products." They want to have those products on the POS or on the warehouse. We did this and that is the reason behind this kind of delivery shift. What I'm saying is that actually we have seen similar growth rates as well in the wholesale business from the digital part. In the wholesale area we have a lot of customers like Breuninger, like ASOS, About You, and Nordstrom, where we've seen the similar growth rates we have disclosed for online. Very good growth rates in the wholesale sector driving our business there. If you take the wholesale digital part together with the online retail part, we account for 23% of our sales that we recorded in Q1 were coming from digital sales. We see overall big improvement here, how we manage our business, not only in online retail, but we come now to dimensions where we are less vulnerable to lockdown situations because we are expanding our business in digital sales in both areas, wholesale and retail. Your final question was related to NBA and Russell. Yes, we will have a second capsule coming for Russell and NBA. We will see this. From the retail side, we expect that this will grow. On the wholesale side, we are just about to sell these products. Actually when it comes to the NBA, the first NBA capsule which we launched back in February and was limited to the U.S. and is now expanding also to European countries because we see that especially younger customers are very keen on buying NBA products as well in the European markets. This will be even somehow bigger. 2022 is already too early to call. Let's surprise you with some new or new exciting collaboration. It would be fair to assume that the second wave of Russell and NBA is going to be bigger than the first wave? I think it's fair to assume. Very good. Super. Thanks very much for the detailed answers. Thanks, Yves. The next question is coming from Thomas Chauvet from Citi. Please go ahead. Good morning, Yves and Christian. Thank you. I have two questions on gross margin and a follow-up on your comments about the guidance sheet. Firstly, on gross margin, can you comment more broadly about BOSS, HUGO, and casual wear, and formal wear? In the past you said that BOSS and HUGO, casual wear and formal wear had more or less the same gross margin. Now, could you update us on how you think this will evolve? You've done pricing adjustment at HUGO a few years back. You seem to have much better production volumes in casual wear than formal wear today. Especially as your new CEO, Daniel Grieder, is likely to make a further push into casual wear. How do you see the evolution of these two categories and the two brands? Secondly, still on gross margin and the promotional environment which impacted you in Q1. I understand the impact of the pandemic on promo in Europe and the U.S. Can you speak more broadly about whether you're seeing a more aggressive promotional environment for BOSS in China, for BOSS or for your peers? We saw, obviously, consumer behavior shifting towards online sales, aggressive social media marketing. How do you expect markdown in China to evolve? Back to the point about the increase in outlets in Asia. Just to follow up on your comments about an over doubling year-over-year in Q2, Yves. That would imply sales 20% below Q2 2019 levels in constant FX, if I'm not mistaken. Not too dissimilar from Q1, actually, from the two-year stack in Q1. If the U.K. is already above 2019 level, I guess some other markets reopening, isn't that doubling way too conservative? Thank you. Bonjour, Thomas. Thank you very much for your questions. Referring to the gross margin, I think it's more kind of strategic questions referring to casual wear versus formal wear. I think the big driver here is actually, yes, the product groups itself. It's less the brand because BOSS and HUGO, they have more or less similar margins. Clearly the margin, the gross margin for casual wear is usually higher in comparison to formal wear, which gives us strategically a kind of tailwind once the casual wear share would grow going further. You had a question regarding the promotional environment in China. As a matter of fact, the Chinese market in our case is, for us, for our brand, the least promotional market in our universe. We have seen actually no big deviations into prior quarters. I cannot confirm what you are saying that there was predominantly full price sales and the discount rates were fairly low. With this doubling of sales, I think, be aware overall, that we are still operating with a lot of uncertainties. As you know, the full April was still in lockdown for big markets like France, be it the Netherlands, be it Germany. I think we have to be prudent and conservative here on this side, and I think there are good reasons for this. It's not only that one thing is to have the pandemic in terms of new infections under control. It is as well all the political decisions that comes to how they handle this kind of pandemic is very unforeseeable and that's the reason why we are guiding like we are saying. Thank you. Just on the casual wear gross margin, when you do collaboration with the NBA or with Russell Athletic, would all the cost be in some kind of marketing expenses so your gross margin would be no different whether this is a BOSS casual wear product or a Russell Athletic product from an accounting reporting standpoint? It depends. Actually, if you run into a collaboration, you might have some license payments that these things affect your COGS. Once you create a lot of buzz, like we did it now with the collaborations, of course, these are marketing spendings. Actually, by the way, although we decreased our operating expenses by 17% in comparison to prior year, the marketing spendings were on the same level like last year. We did not cut any marketing spendings in order to support our brands. Very clear. Thank you, Yves. Thank you, Thomas. The next question is coming from Elena Mariani from Morgan Stanley. Please go ahead. Hi, good morning. Thanks for taking my questions. I'm going to start with OpEx. As usual, you're showing an incredible cost control ability. I was personally impressed by what you showed in Q1. I appreciate that for the rest of the year, you're not giving a precise outlook, but maybe on these items and the main cost line items, you might have a view on what to expect. If the business picks up over the coming quarters, and we're going to go through a progressive ramp-up also in the number of store reopenings, how should we expect the OpEx inflation to follow based on these progressive top-line pick up? You've already answered about marketing. Perhaps could you remind us what's the percentage of sales which has remained stable versus last year, and maybe also the percentage of sales of rentals and how we should expect them to develop?The second question is about the gross margin. Is it possible for you to be a little bit more precise about the moving parts? For the first quarter, you've mentioned that you've had markdown activity, increasing freight costs, and the negative channel mix. What was the magnitude of these effects and how should we expect them for the coming quarters? I would imagine that in Q2 we would probably see a reversal given that wholesale is going to be less strong. If I may, just a small follow-up on what you've mentioned about current trading. You said that you've seen the business picking up in those markets that have reopened, such as the U.K. Can you be a bit more precise about the type of pickup you're seeing there? Maybe also give a word to the U.S. market, which remains difficult. Would you expect that to move up to positive territory relatively soon, or maybe are you already in positive territory? Thank you very much. Yes. Buongiorno, Elena Mariani. Thank you very much for your questions. There were several questions I have to say. First of all, OpEx and the prospects for the year. I think overall what we have to do is, given the uncertainties in the pandemic and having still some countries which were not open, we will still remain under tight cost control. That's for sure. I think we have now shown it for the last three quarters, and clearly this will remain. On the other side, those markets which open, we try to support those markets with marketing activities, and we see that this is really picking up, and that's the reason why we kept actually the marketing spending on the same absolute amount, like in Q1 2020. Just to be very precise, it was not related to in percent of net sales, what I just said. The overall underlying logic is to invest into the brand, to support the brands going forward. Entering into a kind of variable cost and being very strict on fixed costs when it comes to rental expenses, when it comes to personal costs and other overhead structures. This is the underlying logic that we are having. Regarding the assessment of our store portfolio as well in Europe and in the U.S., of course like we always say, we try to rightsize stores in particular, and this will have an ongoing positive effect on our fixed cost structure going forward. Coming to the second questions regarding your gross margin, the moving parts. We were having a decline of 250 basis points, 50% of this decline was related to markdowns, 25% was related to freight cost, and another 25% were related to channel mix effects, wholesale exceeding retail net sales. What we were saying is regarding the margin as a kind of proxy for 2021 overall, we are saying that we will go in between the margins 2019, 2020. I think this is a good proxy overall. You were alluding to the Q2 as well regarding gross margin expectations. I think it's worth highlighting that we had a big inventory devaluation back in Q2 2020, which we see will not come back in 2021 as well. There might be kind of reversal effect here as well for 2021 numbers. Regarding the market pickup, especially in the U.K., what you really can see here is once the lockdown is over, like the situation in the U.K., there was a kind of long-lasting lockdown. People really enjoy shopping. They enjoy going out. They are not afraid because the vaccination has reached a certain level where the people feel much more secure. The consumer sentiment is much better in comparison back in Q3 2020, where there were the first releases of the lockdown situation. I think this situation is different because of a higher consumer sentiment and people want to enjoy life. What we can see is that we have already noticed some pent-up demand here as well in some categories like smart casual products, even in the formal wear sector where people have fun to meet again. This is actually from my point of view, a very positive note, and we have seen this now in several countries, and we hope that this will be true for other major countries like Germany, France, and Benelux, which will reopen or have just opened like the Netherlands and Belgium. Great. Thank you. Just one very small follow-up on the cost line items because you have not mentioned D&A. We've noticed that there was a drop in Q1 of about EUR 16 million. What is behind that drop? Annualized, that would be around EUR 60 million, EUR 65 million. It would be great if you could comment. Thank you. Yes, the decrease is related to the fact is because of the impairments that we did in 2020. That was point one. Actually, the CapEx in 2020 and now in the first quarter has been fairly low. This is the major driver of the D&A being on a lower level. It would be fair to. Thank you. this drop. Okay. Sorry. Yeah, I think Yves answered the question, Elena, right? Okay. Thank you. If there's any open topics, let me know. We can follow up afterwards. Okay? Perfect. Yeah, let's move on. Operator, please. The next question is coming from Antoine Belge from Exane BNP Paribas. Please go ahead. Yes. Hi, it's Antoine Belge at Exane BNP Paribas. I'll be a good citizen and ask two question with zero follow-ups. My first question is with regards to the arrival of Daniel Grieder. I know that he had a non-compete, but in terms of recruitments, maybe key addition to the team, is it possible to say a few words about recruitments that will have been made or could be announced pretty soon? My second question relates to the fact that you're mentioning that the collaboration like Russell Athletic are attracting younger consumer. Do you have any evidence that there is also a sort of halo effect, i.e., that this younger consumer, they also tend to buy not only the collaboration product, but also they tend also to buy the rest of the product range. Thank you. Yes. Bonjour, Antoine. Thank you very much for your questions. Regarding the arrival of Daniel, of course, he has a non-compete and that's the reason he starts on 1st of June. So far he has, of course, not been active. With the new management team, it's up to Daniel to decide beginning on 1st of June. The additions that we have recently to our team regarding the marketing function and the womenswear functions, they were recruited by the existing managing board, including Oliver Timm as well. I think we have hired two high caliber person, and I'm very confident that we will make progress on the marketing and womenswear side as well. Regarding the collaborations, Russell and NBA, yes, clearly we can confirm that there is a halo effect. Like I said during my speech, there are a lot of customers that have not been in contact with the BOSS brand, and they were on our side, and like I said, the sell-throughs were three times higher, and of course, they put much more products into their basket as well. Clearly we perceived that as a clear positive sign. Thank you very much. Thank you. The next question is coming from Thierry Cota from Société Générale. Please go ahead. Good morning, Yves and Christian, congratulations for these good numbers. I have two follow-up questions. First, on the 17% assembly drops in Q1, can you tell us what proportion is temporary and linked to these store closures and how much would be kept going forward? Can we assume that a good half at least would be sort of temporary or is it higher? My second question would be on the comments you made on casual wear and full price sales online. I'm trying to think about the 17% like-for-like sales decline of Q1. Can you give us the mix effect? I'm wondering whether more casual wear leads to a negative impact or whether the higher ASP in C online is enough to offset it. Thank you. Thierry, could you repeat your second question because I didn't get the. Oh. Could you repeat? Well, I hope it's an interesting question. I am not making something out of nothing, but you discussed casual wear development and outperformance, and you mentioned also, which I believe would have a negative mix on the like-for-like sales trend. At the same time and, well, at another moment in the call, you mentioned that there were more full price sales online. I was wondering if on the 17% like-for-like sales decline in retail that you published for Q1, what was the contribution of mix? If it was negative, if it was more or less neutral, or if it actually became positive. I think Christian has to answer this question. Okay. We can pick it up. I don't know. Okay. Perhaps I start with the first one. You were asking the question regarding the 17% decline in costs. I think it's very difficult to judge, but I would see the temporary sales decline exceeding a little bit this kind of 10 percentage points range. It's more than half of this which are temporary. Okay. The second question goes to Christian, perhaps. Yes, Thierry. Interesting way to look at it. No, I don't think that there was a material negative impact from mix and because of the fact that casual wear has now grown faster than formal wear, I don't see a reason where that should be coming from. Actually, if you look at some of the most recent casual launches that we had during the quarter, those had sold at 100% full price at the end of the day, right? I don't want to make these collaborations too big, but I think overall, I don't think that just by seeing casual wear growing faster than formal wear, that this will immediately lead to a negative mix effect from a full price perspective. That is not what we've recorded internally and that's why at least neutral, I would say here. Okay, great. Thank you very much. Thank you. Thank you, Thierry. The next question is coming from Volker Bosse from Baader Bank. Please go ahead. Yeah. Hello, gentlemen. Volker Bosse, Baader Bank. Thanks for all the provided answers, and congratulations on the very solid figures. I would have a question on the rental cost, which you mentioned. Have you already been able to renegotiate store rents also on a sustainable basis already? I heard from other retailers, they speak about 10% to 25% rental cost reduction potentials for inner city locations. Would you agree in that? How do you look at this potential? A second question would be regarding online sales. You mentioned 59 dot-com online countries or stores are now on stream. Where we'll be at the end of FY 2021 or end of 2022, just to get an idea about the rollout plan in regards to countries to come? A small one on CapEx for the full year, what do you have in your guidance or baked into your plans? Thank you. Thank you very much and good morning, Volker. Thank you very much for your questions. Regarding rental costs. Clearly what we have already said, since I'm there at Hugo Boss, we always look in optimizing our brick-and-mortar business, and we try to renegotiate every store that comes to our table once the contract expires. It really depends on the locations. There are some locations which are really running and where you even have some increased rents. Because of the pandemic and because of, as we all know, brick-and-mortar really suffering, rents are coming down. I think it has been always our interest in getting the rent-to-sales ratio down by several things. It's not just only the negotiation, it's also the structural size. As you know, there are a lot of oversized stores, especially in Europe and in the Americas, with two or three sales floors operating. We try to get it to one sales floor, decreasing it. It's several effects that we see here to get the rents down. I can assure you, yes, we get good rent deals, and we try to exploit the situation from a retailer point of view to renegotiate every contract. Going further, we should expect that the rent-to-sales are coming down. Of course, there are two things with it. One is the rent and the other thing is the sales. There are two parts. Of course, what we intend to do is to flexibilize the business, to get into shorter deals, to have the possibilities to get out of contracts, to somehow flexibilize the whole expenditure. The next question was related to online sales. We are now, like you were rightly saying, in 59 countries. Yes, we will explore more countries. I think there are at around 20 more countries to come at the end of this year. I can say with these 59 countries, we are now in the most relevant parts. Be aware that those markets we do with Global-e are in some cases in English. At least we have a certain presence in those markets with online, and you can buy us. I think it's very good, and we have seen good numbers in somehow expanding our online footprint. Regarding CapEx, yes, I think, we do not do any guidance regarding the CapEx, but I think we will have to observe this because the uncertainties still are very high. We try to keep the CapEx under control. I think you should expect them on the last year's level, more or less. On the other side, we see still a lot of efficiencies that we can do in the shop format that we are using in order to get the EUR per sq m spent down without reducing the quality with our stores. Okay, perfect. Thank you very much and all the best. Thanks. Thank you very much, Volker. The next question is coming from Rogerio Fujimori from Stifel. Please go ahead. Hi, good morning. Thanks for taking my questions. I have two. The first one is on the gross margin outlook. I think in a previous call, you've mentioned that the expectation would be for gross margins this year to be between 2020 and 2019 levels. Is this still the case? My second question is a follow-up on China. I think it was very encouraging to hear about the strong April trends. My question is just about the situation with your brand ambassadors in China and your thoughts on social media share of voice these days to sustain the strong top-line momentum in H2. Thank you. Thank you very much, Rogerio, for your questions. Regarding your first question in gross margin, I can confirm that our gross margin is expected to be between 2019 and 2020 levels. Regarding China, yes, we are looking for new brand ambassadors. We are working with a kind of public relations agency there in order to get new brand ambassadors. I think this is very important that we have local Chinese person that somehow transport our brand values to the Chinese customer. Thank you. The next question comes from Mr. Vales from Hauck & Aufhäuser. Please go ahead. Yes. Hey, good morning, everyone, and good morning, Yves. Christian from Hauck & Aufhäuser. Two questions from my side left. Again, on the OpEx level. As already mentioned, you were able to keep tight cost control really in Q1, selling and distribution expenses down 20%, also G&A down nine percent. How much of this is really sustainable? Could it be that this really implies some structural upside for your operating margin in the midterm? Secondly, again, on the midterm and particularly on formal wear. It would be very interesting to get your thoughts on this. How do we think about this segment from a midterm perspective? Do you expect any sustainable negative effect on your general revenue level from the working from home trend in the midterm? When do you expect to return to the 2019 revenue level again? Thank you. Okay. Good morning, Christian. Thank you very much for your question. Perhaps I start with your last questions regarding net sales level. I think this is one thing that we will be elaborating on our Capital Markets Day. I have to ask for your patience there regarding our net sales ambitions going forward. Regarding OpEx, like I said, yes, I think tight cost control. I think there are a lot of different effects, and clearly I would say that around two third are temporary effects and one third are somehow sustainable effects going forward regarding our OpEx. Regarding formal wear, clearly what we have seen now, I think we will see once the lockdown is released, once social distancing measures will fade away, I think we will see some pent-up demand as well in formal wear. Actually, even pre-COVID, we have seen in our business, if you do it rightly, if you play the right moments with performance materials, coming up with innovations, you have the good possibility to grow the formal wear market as well. From our perspective, of course, on the other side, we see that in casual wear, the dynamic is much higher. On both sides, we are confident and optimistic to grow. Great. Well, thank you, Yves, for your detailed answers. Ladies and gentlemen, this completes our conference call for today. Thank you for your participation as always. If there's any further questions, please do not hesitate to contact any member of the IR team. With that, thank you very much for your participation, and bye-bye.