Hugo Boss lowers 2026 outlook amid softer consumer demand and rising IT costs

German fashion group Hugo Boss has revised down its full-year financial outlook for 2026. The managing board now forecasts currency-adjusted group sales to drop in the high single-digit percentage range, compared to its previous guidance of a mid- to high single-digit decline.

The Metzingen-based company projects operating profit (EBIT) to come in between 250 million euros and 300 million euros (280 to 336 million dolars), down from its earlier target of 300 million euros to 350 million euros. The downgrade stems from softer consumer demand alongside higher non-cash depreciation and amortisation expenses on IT assets driven by rapid artificial intelligence and technology developments.

Trade net working capital (TNWC) is now estimated at around 21 percent of group sales, up from 20 percent, following revisions to supplier payment terms that lowered trade payables. Capital expenditure is anticipated to represent between 4 percent and 5 percent of group sales, against roughly 4 percent previously, reflecting the acquisition of a previously leased logistics property at its headquarters.

Third quarter profit declines despite gross margin expansion

In the third quarter of 2026, currency-adjusted sales fell by 5 percent, while revenue in group currency contracted 4% to 946 million euros compared to 989 million euros in the prior-year period. The group attributed the performance to subdued consumer demand in key markets and its ongoing strategic realignment under the ‘Claim 5 Touchdown’ initiative.

Gross margin increased by 220 basis points to 63.3 percent, bolstered by sourcing efficiencies and optimised pricing strategies. However, operating expenses rose 2 percent because elevated administration costs outweighed savings achieved in selling and marketing.

Consequently, third-quarter EBIT dropped to 81 million euros from 95 million euros a year earlier, representing an EBIT margin of 8.6 percent compared to 9.6 percent in the third quarter of 2025. Hugo Boss is scheduled to release its complete third-quarter financial results today, November 3, 2026.