Hugo Boss expects sales to decline in 2026, keeps operating profit forecast at €300 million to €350 million
Key Facts
In a statement published in August, Hugo Boss maintained its forecast for currency-adjusted sales to decline by a mid- to high-single-digit rate in 2026, and projected operating profit of €300 million to €350 million. The outlook comes as the company's results showed currency-adjusted group sales falling 9% in the second quarter and 8% in the first half of the year. These figures provide a measure of the company's performance ahead of its third-quarter results, due on November 3. In Germany, real retail sales fell 2.3% year on year in September, the statistics office said on November 2. The German reading provides relevant consumer backdrop, but on its own does not establish the reasons behind Hugo Boss's forecast.
The second-quarter decline varied across regions, with currency-adjusted revenue falling 13% in Europe, the Middle East and Africa. It declined 1% in the Americas, while falling 5% in Asia-Pacific. Europe, the Middle East and Africa was the weakest of the three regions in the quarter. At group level, the second-quarter decline was steeper than the 8% fall recorded in the first half. This comparison across regions and periods provides context for assessing performance when the next quarterly results are published.
The company's second-quarter announcement was not limited to sales: gross margin rose 200 basis points to 64.9%. Free cash flow before leases was also €105 million in the second quarter and reached €137 million in the first half. The company said it was focused on "profitability, cash generation and the quality of business in a challenging consumer environment." These indicators highlight profitability and liquidity alongside the sales decline, without changing the scope of the annual outlook announced in August. The upcoming quarterly results will allow a comparison of sales performance, margins and cash flow over the latest period.
In its strategic update published in December 2025, Hugo Boss said it expected currency-adjusted sales to return to growth in 2027, with growth accelerating in 2028. This provides a longer-term timeframe than the 2026 outlook, which points to declining sales, but remains a target stated in that update. The nearer-term update is due on November 3, when the company publishes its third-quarter results. Those results will provide an opportunity to review the sales trajectory in light of the declines recorded in the second quarter and first half. The new quarterly figures will also show where performance stands against the company's operating-profit range for the year.