HUGO BOSS UPDATES FULL-YEAR 2026 OUTLOOK

Outlook 2026

• Currency-adjusted Group sales now expected to decline in the high single-digit percentage range
• EBIT expected to range between EUR 250 million and EUR 300 million
• Updated outlook reflects higher non-cash D&A expenses for IT assets in light of rapidly evolving AI and technology developments, as well as softer demand assumptions for Q4 amid elevated market uncertainty
• Trade net working capital is now expected to amount to around 21% of Group sales, reflecting lower trade payables following adjustments to supplier payment terms
• Capital expenditure is now anticipated to range between 4% and 5% of Group sales, including the strategic acquisition of a previously leased logistic property
• Free cash flow in 2026 is now expected to remain below the level originally anticipated

Key developments Q3 2026

• Group sales decline 5% currency-adjusted in Q3 amid ongoing strategic realignment and macroeconomic headwinds (YTD: –7%)
• Gross margin improves strongly by 220 basis points to 63.3%, driven by the execution of CLAIM 5 TOUCHDOWN initiatives
• EBIT declines to EUR 81 million with an EBIT margin of 8.6%, reflecting operating deleverage (YTD: EUR 175 million; 6.4%)
• Free cash flow before leases increases to EUR 155 million, supported by a 14% reduction
  in inventories year over year

Daniel Grieder, Chief Executive Officer of HUGO BOSS: “In the third quarter, our top-line performance reflected both the deliberate strategic realignment of our business and a persistently subdued consumer environment. At the same time, we made further progress in improving our gross margin and operating efficiencies. With demand likely to remain volatile in the fourth quarter, we are adjusting our full-year 2026 outlook to reflect a more realistic assessment of the market environment. Our strategic direction, however, remains unchanged. We are convinced that CLAIM 5 TOUCHDOWN addresses the right priorities and lays the foundation for the next phase of HUGO BOSS. While the full benefits of the related initiatives will take time to materialize and we recognize that there is still work ahead of us, they are fundamentally strengthening our business. We remain focused on the long term: building a more resilient, more profitable HUGO BOSS and creating sustainable value for our shareholders."

CLAIM 5 TOUCHDOWN – Update on Strategic Progress

Brand initiatives

• HUGO BOSS maintained marketing investments at 7.3% of Group sales while further improving marketing effectiveness. Key initiatives included new global brand campaigns and the launch of the latest BOSS by BECKHAM collection, which further boosted consumer engagement.
• Both brands successfully launched their Fall/Winter 2026 collections in Q3. While BOSS celebrated its tailoring heritage through elevated craftsmanship and performance-driven design, HUGO’s collection focuses on contemporary tailoring.
• Product complexity in the upcoming Spring 2027 collection was reduced by a high-single-digit percentage, a reflection of the Company’s continued focus on simplifying its assortment architecture.

Distribution initiatives

• A focus on distribution quality, including a deliberate emphasis on full-price sales and disciplined promotion management in own retail, supported earnings quality in Q3. Comparable brick-and-mortar sales were down 6% currency-adjusted, proving more resilient than the overall retail business despite persistently subdued consumer demand.
• HUGO BOSS continued to optimize its global store network. In the first nine months of 2026, the Company recorded a net closure of 27 stores, including six in Q3.
• HUGO BOSS further advanced its digital channels with the launch of its revamped hugoboss.com online store and app, which enhances the omnichannel experience.
• The HUGO BOSS XP member base grew to 15 million, up 15% year over year, reflecting the broadening appeal of BOSS and HUGO, particularly among younger consumers.

Operational initiatives

• Gross margin expanded by 220 basis points to 63.3%, driven by sustained sourcing efficiencies and optimized pricing.
• Inventories decreased by 200 basis points year over year to 23.5% of Group sales, contributing to a further reduction in trade net working capital to 19.2% of Group sales, down 100 basis points year over year.
• Free cash flow before leases amounted to EUR 155 million in Q3 (Q3 2025: EUR 66 million), also supported by disciplined investment activity.

Q3 sales development

• In the third quarter of 2026, HUGO BOSS continued to execute its targeted brand and channel realignment under CLAIM 5 TOUCHDOWN. In particular, the Company remained focused on strengthening brand desirability and distribution quality, supporting the long-term success of its business. At the same time, global consumer demand remained subdued, impacted by heightened macroeconomic and geopolitical volatility.
• Against this backdrop, currency-adjusted Group sales declined by 5% in the third quarter, while revenues in Group currency decreased by 4% to EUR 946 million (Q3 2025: EUR 989 million). In the first nine months of 2026, currency-adjusted Group sales came in 7% below the prior-year level. In Group currency, revenues decreased by 8% to EUR 2,756 million (9M 2025: EUR 2,989 million).

Q3 sales development by brand

• Currency-adjusted revenues for BOSS declined by 3% in the third quarter, reflecting continued emphasis on strengthening brand equity and profitability. While Menswear proved comparatively more resilient, Womenswear continued to be affected by its ongoing repositioning.
• At HUGO, currency-adjusted revenues were 17% below the prior-year level, reflecting the brand's ongoing strategic refinement, including initiatives to strengthen its position in contemporary tailoring and optimize its product assortment.

Q3 sales development by segment

• In EMEA, currency-adjusted revenues declined by 7%. While Germany showed a comparatively more resilient performance, the UK and France recorded more pronounced declines amid subdued consumer demand. In the Middle East, geopolitical volatility continued to weigh on store traffic, notably impacting sales performance.
• In the Americas, currency-adjusted revenues were 3% below the prior-year level. While the U.S. performed slightly better than the region overall, Latin America recorded a moderate decline.
• In Asia/Pacific, currency-adjusted sales declined 2%, driven by lower sales in both China and Southeast Asia & Pacific.
• Sales in the license business declined by 2%, mainly reflecting lower revenues in the fragrance business.

Q3 sales development by channel

• In the Group’s retail business (including brick-and-mortar and self-managed digital touch­points), currency-adjusted revenues declined by 8%, mainly reflecting softer store traffic. At the same time, HUGO BOSS continued to optimize its global store network, reducing net selling space by 4% year over year. Comparable store sales in brick-and-mortar retail declined by 6% currency-adjusted. Revenues generated via self-managed digital channels (hugoboss.com and online concessions) decreased by 16% currency-adjusted to EUR 59 million (Q3 2025: EUR 69 million), reflecting the continued focus on full-price sales.
• Revenues in the wholesale business (including brick-and-mortar and digital wholesale)
  declined by 2% currency-adjusted, reflecting the Company’s continued focus on distribution quality alongside a cautious order environment among wholesale partners.

Q3 earnings development

• The Group’s gross margin improved by 220 basis points to 63.3% in the third quarter. This development was driven by the Company’s focus on enhancing business quality, including additional sourcing efficiencies and optimized pricing.
• Operating expenses grew 2%, as higher administration expenses more than offset a reduction in selling and marketing expenses. As a percentage of sales, operating expenses increased by 320 basis points to 54.8%.
• Selling and marketing expenses were down 2% in the third quarter, driven by
  disciplined cost management. While retail expenses and marketing investments remained broadly stable year over year, the Company continued to invest in brand-building initiatives to strengthen brand equity. As a percentage of sales, selling and marketing expenses amounted to 43.5% (Q3 2025: 42.5%).
• Administration expenses increased by 19%, reflecting a particularly low prior-year comparison base as well as one-off personnel-related expenses in the current year. Apart from this, disciplined cost management remained firmly in place. As a percentage of sales, administration expenses came in at 11.3% (Q3 2025: 9.1%). 
• Driven by the significantly higher gross margin, HUGO BOSS partially offset the impact of lower revenues on profitability. Accordingly, operating profit (EBIT) decreased 15% to EUR 81 million in the third quarter, corresponding to an EBIT margin of 8.6%.
• Net income amounted to EUR 49 million in the third quarter. Net income attributable to shareholders declined by 18% to EUR 48 million, resulting in earnings per share of EUR 0.70.

Trade net working capital

• Trade net working capital (TNWC) improved by 16% on a currency-adjusted basis, driven by continued progress in inventory management. Inventories decreased by 14% currency-adjusted year over year, reducing inventory levels to 23.5% of Group sales (September 30, 2025: 25.6%). Disciplined inventory and working capital management continued to support solid cash generation, further enhancing financial flexibility. The moving average of TNWC as a percentage of sales based on the last four quarters improved to 19.2% (September 30, 2025: 20.2%).

Outlook

• HUGO BOSS remains committed to the disciplined execution of CLAIM 5 TOUCHDOWN, with a clear focus on further strengthening the overall quality of its business.
• The Company updates its outlook for fiscal year 2026 to reflect softer demand assumptions for the remainder of the year amid continued uncertainty in the consumer environment.
• Consequently, management now anticipates currency-adjusted Group sales to decline in the high single-digit percentage range.
• HUGO BOSS now expects EBIT to range between EUR 250 million and EUR 300 million in 2026. In addition to the softer demand assumptions, this also reflects expected higher non‑cash depreciation and amortization related to reductions in the useful lives of selected IT and software assets, reflecting the rapidly evolving technology environment.
• In fiscal year 2026, TNWC is now expected to amount to around 21% of Group sales. While the Company remains committed to disciplined inventory management, this reflects anticipated lower trade payables following adjustments to supplier payment terms.
• Capital expenditure is now expected to range between 4% and 5% of Group sales, reflecting the strategic acquisition of a formerly leased logistic property at the Company’s headquarters.

Events after the balance sheet date

On October 23, 2026, Frasers Group plc notified HUGO BOSS that it had crossed the threshold of 50% of the total share capital of HUGO BOSS AG. According to the voting rights notification, Frasers directly held 50.08% of the voting rights in HUGO BOSS AG at that date, while a further 21.87% was being held through instruments. Following this transaction, Frasers announced that the earnings, assets and liabilities of HUGO BOSS are expected to be consolidated into the earnings, assets and liabilities of Frasers, and that HUGO BOSS will thereby become a subsidiary of the Frasers Group. The crossing of the 50% threshold may potentially trigger change-of-control clauses in certain third-party agreements of HUGO BOSS. HUGO BOSS is currently reviewing the relevant contractual arrangements. As of October 27, 2026, based on the most recent voting rights notification available to HUGO BOSS, Frasers directly holds 49.41% of the voting rights in HUGO BOSS AG, while a further 21.87% continues to be held through instruments.

If you have any questions, please contact:

Media Relations
Carolin Westermann
Senior Vice President Global Corporate Communications
Phone: +49 7123 94-86321
E-mail: carolin_westermann@hugoboss.com

Investor Relations
Lena Biberacher
Head of Investor Relations
Phone: +49 7123 94-84272 
E-mail: lena_biberacher@hugoboss.com