German clothing brand Hugo Boss announced this Wednesday, 3rd, that 2026 will be a year of “reorganization” of brands with a view to returning to profitable growth from 2027.
“We are taking a step back to prepare for future growth,” said Hugo Boss CEO Daniel Grieder, indicating that, in the coming years, the company will focus on optimizing the brand, distribution and operations.
The German brand will continue to promote its strategy in the physical market, in addition to expanding its franchise business, while strengthening its digital business.
The clothing company said it will seek greater efficiency in supply through continuous optimization of suppliers, prioritizing maritime transport and shorter delivery times, while improving its planning capabilities and enabling faster and smarter decisions to be made through artificial intelligence (AI).
On a financial level, Hugo Boss aims to outperform market growth in the medium and long term with a profit before interest and taxes (EBIT) margin of around 12% and expects to achieve a free cash flow of around 300 million euros per year.
The company is confident that inventory levels will be steadily reduced, approaching 20% of sales by 2028.
In this context of “deliberate brand and channel restructuring”, currency-adjusted sales are expected to decline in 2026, before growing again in 2027 and accelerating in 2028. Additionally, improvements in gross margin are expected from 2026 onwards, driven by supply efficiency and selective price adjustments.
“Although we anticipate a temporary decrease in sales, we will continue to drive our efficiency strategy along the value chain to protect margins and considerably accelerate cash flow generation,” said the company’s financial administrator, Yves Müller.