Hugo Boss shares slide as fashion brand presses reset

Hugo Boss warned that its sales would fall next year as it embarks on a strategic reset, before returning to growth from 2027, rattling the German fashion group’s shares on Wednesday.

The maker of men’s suits and casualwear said it is targeting an operating profit margin of around 12% in the long term.

Shares in Hugo Boss were down 11.9% in Lang & Schwarz pre-market trade after it said currency-adjusted sales are expected to decline by a mid- to high-single digit percentage in 2026 due to what it called a “deliberate brand and channel realignment”.

It expects earnings before interest and tax (EBIT) of between 300 million and 350 million euros ($349-$408 million) next year as it streamlines operations and refines its product range, Hugo Boss said late on Tuesday.

The update follows last month’s guidance for 2025 from Hugo Boss which was at the lower end of its range, between 4.2 billion and 4.4 billion euros in sales and operating profit of 380 million to 440 million euros.

The company then cited rising macroeconomic uncertainty and adverse currency moves and had also reported quarterly sales which were below expectations, hurt by weaker demand in Britain and China and pressure from a softer dollar.

Cash generation focus

 Hugo Boss launched a new strategic plan called CLAIM 5 TOUCHDOWN running through 2028, focusing on brand strength, distribution and operational efficiency.

“2026 will be a year of consolidation and realignment and an important step toward positioning Hugo Boss for long-term profitable growth,” said Yves Mueller, its chief financial officer and chief operating officer.

Sales are expected to return to growth in 2027 and accelerate in 2028, Hugo Boss said.

The group is targeting average annual free cash flow of around 300 million euros from 2026 onwards, nearly tripling compared with recent years.

Hugo Boss said it would provide a detailed outlook for 2026 on March 10, alongside full-year 2025 results.