Hugo Boss has lowered its full-year 2026 outlook, pointing to increased market uncertainty, softer expected demand in the fourth quarter and higher non-cash depreciation and amortization expenses for IT assets amid rapid developments in AI and technology.
The German fashion group now forecasts a high single-digit percentage decline in currency-adjusted sales and EBIT of €250 million to €300 million. It also expects trade net working capital to be around 21% of group sales, reflecting lower trade payables after changes to supplier payment terms.
In the third quarter, revenue fell 4% year over year to €946 million, while EBIT declined nearly 15% to €81 million. The EBIT margin was 8.6%. Gross margin rose 220 basis points to 63.3%, which the company attributed to the execution of its CLAIM 5 TOUCHDOWN initiatives.
Free cash flow before leases increased to €155 million, supported by a 14% year-over-year reduction in inventories. CEO Daniel Grieder said quarterly sales reflected the company’s strategic realignment and a persistently subdued consumer environment, adding that the updated outlook takes account of expected volatility in fourth-quarter demand.
Currency-adjusted revenue fell 3% at BOSS and 17% at HUGO. By region, sales declined 7% in EMEA, 3% in the Americas and 2% in Asia/Pacific.
Hugo Boss expects capital expenditure to represent 4% to 5% of group sales, including the strategic acquisition of a logistics property it had previously leased.
Sources: Investing.com News.