The shareholders of the fashion group Hugo Boss need patience with a view to a revival in business. The company has already felt the effects of a sometimes poor consumer mood in recent months. 2026 is now expected to be a transitional year; the range and sales are to be adjusted; Sales and earnings before interest and taxes (EBIT) will probably fall. Improvement is only expected from 2027. The news was poorly received on the stock market.
“2026 will be a year of adjustment in which the business will be characterized by streamlining processes, revising the range and optimizing the distribution network,” the company announced on Tuesday evening. Therefore, sales next year are expected to decline in the mid to high single-digit range on a currency-adjusted basis. Earnings before interest and taxes should reach 300 to 350 million euros.
It was only at the beginning of November that the people of Metzingen became more cautious about 2025 due to the difficult economic environment and negative exchange rate effects. Since then, CEO Daniel Grieder has only expected the lower end of the forecast range of group sales of 4.2 to 4.4 billion euros and an operating profit (EBIT) of 380 to 440 million euros.
Hugo Boss wants to grow again from 2027
From 2027 onwards, the MDax group wants to grow again and in 2028 the pace should even pick up speed. In addition, profitability should improve from 2027, it said.
Thanks to savings, the Metzingers want to achieve an average annual free cash flow of around 300 million euros from 2026, without taking the accounting standard IFRS 16 into account.
This did not console shareholders about the dismal sales and profit prospects for 2026. The share price fell by almost ten percent to 35.40 euros on the Tradegate trading platform compared to the Xetra closing. This means that the price in the main Xetra business is in danger of slipping below the recently formed support of around 36 to 37 euros. The annual deficit would increase to a good fifth.
The price development on Wednesday will also depend on the upcoming details of the strategy. The update has been planned for a long time.
The recent disputes between Hugo Boss’s largest shareholder, the Frasers Group, and the supervisory board are likely to raise questions. Frasers is no longer supporting the chairman of the supervisory board, Stephan Sturm, as was announced before the weekend.
With a direct stake of 25 percent, the investor is by far the largest shareholder in the group. As has been known since the summer, the group, including financial instruments, has more than 30 percent. So would he put the financial instruments in "real" If shares were converted, a mandatory takeover offer would be due.
There have recently been disagreements between the management of Hugo Boss and the major shareholder regarding the dividend policy. Frasers Group sees Hugo Boss as undervalued on the stock market, according to a mandatory announcement from July. The investor believes that Hugo Boss should not pay dividends at this time. Rather, the funds should be used to increase the value of the company.