Hugo Boss resets course, delays growth ambition to 2027

Hugo Boss’ sales and earnings will decline in 2026 before returning to growth the following year, as the German fashion house launches a new strategy after a previous plan ran into challenges and delayed targets. Currency-adjusted sales will fall by a mid- to high-single-digit percentage next year, while earnings before interest and taxes will probably reach between 300 million euros ($350 million) and 350 million euros ($408 million) during the period, the company said in a statement Wednesday. That’s below the average analyst expectation compiled by Bloomberg. Growth timeline shifts: Return expected in 2027, acceleration in 2028 Growth is expected to return in 2027 and accelerate in 2028 after a program of reducing the number of items they sell and cutting costs, the company said. It will also push up the prices of some of its products to boost gross margins in 2026 and beyond. In the longer-term, it reiterated its ambition to achieve a 12% earnings margin — a level the company had once targeted for 2025. The reset comes after a challenging period in which Chief Executive Officer Daniel Grieder delayed the mid-term goals he set in 2021, including a 5 billion euros ($6.6 billion) revenue target for 2025. Grieder has focused on attracting younger consumers, but demand — particularly in China — has been softer than expected. Womenswear weakness persists While Grieder has refreshed the Hugo and Boss brands, womenswear remains a weak spot. Bloomberg Intelligence analysts estimate it contributes only about 10% of total sales, suggesting that strengthening this segment could be key to boosting store traffic. Hugo Boss said Wednesday that it plans to refine its womenswear assortment around essential products, while giving the Hugo brand a “more accessible product range” centered on more contemporary tailoring. “Boss is clearly resetting its business as it looks to set itself up for profitable growth in the future,” RBC analysts including Manjari Dhar said in a note. “We also note strategic interest in Boss from Frasers Group, who we think are looking to become more activist.” Dhar was referring to scrutiny from Frasers Group, which is the company’s biggest shareholder with a 25% stake. Frasers has threatened earlier this year to vote against any proposed dividend, saying cash should be invested in long-term growth. Last week it said that it no longer supports supervisory board chairman Stephan Sturm. Hugo Boss said Sturm intends to stay on. By Sonja Wind

Sectors

Insights

Company

Hugo Boss resets course, delays growth ambition to 2027