Hugo Boss stock slides as fashion brand warns on sales, profit

By Helen Reid and Kirsti Knolle

BERLIN, Dec 3 (Reuters) - Hugo Boss shares dropped 11% on Wednesday after it warned that its sales and profit would fall next year, as the struggling German fashion brand embarks on a strategic reset.

Days after its top shareholder Frasers withdrew support for its chairman, Hugo Boss slashed its operating profit forecast and said it expects currency-adjusted sales to decline by a mid- to high-single digit percentage in 2026.

The retailer of men's suits and casualwear is refining its product range and streamlining operations in response to falling sales in its Europe, Middle East and Africa region as well as in Asia Pacific, which it blamed on weakness in the UK and China.

"To ensure sustainable, profitable growth, we now have to refocus, simplify, and strengthen our business to prepare Hugo Boss for the next level," CEO Daniel Grieder told reporters.

Trade barriers and cautious consumers were hurting business, Grieder added on the media call.

Britain's Frasers, which has a 25% stake in Hugo Boss, is pushing for board-level change. Last week it said it no longer supports the company's chairman Stephan Sturm, who Hugo Boss said is firmly committed to continuing in the role.

SEES BIG OPPORTUNITY IN WOMENSWEAR

Hugo Boss' new strategy launched on Wednesday aims to strengthen the brand by improving stores, focusing on high-growth categories like shoes and accessories, and developing its womenswear range.

"Without a question, womenswear is the biggest single potential that Hugo Boss has from a business unit perspective to drive growth and profitability," its chief sales officer Oliver Timm said on the media call.

Hugo Boss expects earnings before interest and tax (EBIT) of between 300 million euros and 350 million euros ($408 million) in 2026. For this year it has forecast operating profit at the lower end of its 380-440 million euro guidance range due to "heightened macroeconomic volatility".

The fashion group also aims to cut costs in its supply chain and increase prices, but Grieder said no layoffs are planned.

It expects sales to return to growth in 2027 and accelerate in 2028, and will provide a detailed outlook for 2026 in March alongside its full-year results.    

($1 = 0.8604 euros)

(Reporting by Helen Reid in London, Bipasha Dey in Bengaluru, Miranda Murray, Kirsti Knolle in Berlin, Editing by Maju Samuel and Alexander Smith)