Hugo Boss Eyes Long-term Growth: Sales Down, Investment Up Until 2028

Hugo Boss reorganizes its business to return to growth in 2027. The German men’s and women’s fashion company has adjusted its forecasts for the coming years with a new strategy, Claim 5 Touchdown, with which it expects to accelerate free cash flow from 2026, putting it at €300 million. The company expects a drop in sales as a result of restructuring over the next year.

“2026 will serve as a year of realignment, strengthening the business by simplifying processes, refining assortments and optimizing the distribution network,“ the company said in a statement.

With a focus on brand, distribution and operations, the group will carry out its new business strategy until 2028. The immediate implementation of the new measures will mean a drop in sales for the company during the next fiscal year, estimated at between 5% and 9%.

Hugo Boss recorded a 3.9% drop in sales in the last quarter, while its profits rose 7%

Hugo Boss will introduce changes in its sales strategy, opting for a selective price increase and a greater weight of full-price sales, reducing the application of discounts. On the other hand, the group will optimize its network of stores in the wholesale market, as well as in the expansion of franchises, especially in the United States and China, while strengthening its digital business.

Hugo Boss aims to outperform market growth in the medium to long term with an Ebit margin of around 12%. The company’s target is set to reach €300 million in free cash flow by 2026 and increase the figure to €350 million by 2027.

In its latest results, published at the beginning of November, the company has maintained a two-speed trend: with lower sales, the company is able to increase its earnings during the third quarter of the current financial year. With sales down by 3.9% to €989 million, it raised its profit by 7% to €60 million.

For the first nine months of the year, the group’s sales fell by 2%, from €3.05 billion last year to €2.98 billion this year.