Hugo Boss sales fall 5% in Q3 and guidance is cut again

Hugo Boss reported third-quarter sales of €946 million, down 5% as reported and 4% in currency-adjusted terms. The German menswear specialist also cut its full-year guidance, and chief executive Daniel Grieder said consumer demand remains weak and store traffic is under pressure in most markets.

The result still beat market consensus. Analysts had expected €919 million in revenue for the quarter. Operating profit fell 15% to €81 million, and the operating margin shrank to 8.6% from 9.6% a year earlier, roughly in line with market expectations.

The steepest decline came in the home region of Hugo Boss, Europe, the Middle East and Africa, where sales fell 7% to €598 million. The company blamed the U.K. and France, where consumer demand was subdued and declines were more pronounced.

Germany proved comparatively resilient, the company said. Sales in the Americas and Asia-Pacific were flat. Grieder still sees potential in the United States, citing strong results in department stores and the chance to open freestanding stores there.

The formal Boss collection, the brand's mainstay, eased 2% to €813 million. Menswear held up better than womenswear, which the company said continues to be affected by its repositioning. The more casual Hugo label slid 16%, reflecting what Hugo Boss called ongoing strategic refinement.

What the new guidance says

Hugo Boss had previously expected a mid-to-high single-digit sales decline in currency-adjusted terms and operating profit of €300 million to €350 million for 2026, but now forecasts a high single-digit sales decline, with operating profit of €250 million to €300 million.

The reduced outlook reflects limited visibility, Grieder said on a media call on Tuesday morning. Order books indicate a tougher wholesale environment, he added, and the company expects consumer demand to remain under pressure.

Grieder would not commit to the return to growth in 2027 promised when the reset began late last year. Calling it too early to be precise, he said the company plans to use every opportunity to get back to growth.

Frasers looks under the hood

The results come weeks after Frasers Group said it had acquired 50.8% of Hugo Boss shares on the open market in late October, despite the company advising shareholders not to sell. We covered that control shift, when Mike Ashley's group pushed into majority ownership after a year of boardroom manoeuvring.

In September, with around 48% of the shares, Frasers chief executive Michael Murray was named chairman of Hugo Boss's supervisory board; he had been a member since May 2025. Grieder described the relationship as regular and constructive, calling Frasers a significant long-term shareholder.

Grieder likened a new owner's first weeks to buying a car and lifting the bonnet to inspect the engine, saying Murray and other Frasers executives have been in Germany looking into the business from all angles. Analysts said the lowered profit guidance could be a problem for Frasers.

JP Morgan and Royal Bank of Canada said Frasers would likely want the operating margin to rise to 10%, which could mean cutting underperforming stores. Bloomberg Intelligence analyst Andrea Ferdinando Leggieri said rising costs show the shrink-to-grow strategy is not working.

Reports out of Italy in early October suggested Hugo Boss had pressured suppliers for a 10% retroactive discount on outstanding invoices. Chief financial officer Ivica Maric would not confirm the reports, but said the company regularly engages with suppliers to identify opportunities.

Maric, the former deputy chief financial officer, took the top job after Yves Mueller resigned in late September for personal reasons. He said suppliers remain a cornerstone of the business, and that Hugo Boss pays invoices promptly and in full. That has not changed and will not change, he said.

In China, where the brand was previously a focus, business remains limited, Grieder said, but the Boss Camel luxury line, which includes made-to-measure suiting, has had incredible results in Asia. Partnerships with the more casual line in the U.S. have also performed well.

We also reported when Hugo Boss rejoined the Pakistan Accord, reversing an earlier decision on supplier safety. Boss womenswear was only recently relaunched, while the strategy built around quality over quantity has yet to produce a return to growth.

Frasers Group, once a discount sportswear specialist, has been buying into higher-margin premium retail. It acquired Harvey Nichols in the U.K. and The Webster in the U.S., and is reported to have set its sights on Burberry and Mulberry.

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Image: Hugo Boss