Hugo Boss has lowered its full-year sales and profit forecasts, citing weaker consumer demand and higher technology-related costs.
It now expects operating profit of between £209m and £251m for 2026, down from its previous forecast of £251m to £293m.
It also anticipates a high single-digit percentage decline in currency-adjusted sales, compared with its earlier forecast of a mid-to-high single-digit fall.
The downgrade follows a difficult third quarter, during which revenue dropped four per cent to £791m, while operating profit fell almost 15 per cent to £67.7m.
Currency-adjusted sales declined five per cent as the retailer continued to face subdued consumer spending and uncertainty across its key markets.
Despite the sales decline, Hugo Boss improved its gross margin by 2.2 percentage points to 63.3 per cent, helped by sourcing efficiencies and changes to its pricing strategy.
However, higher operating expenses and increased depreciation charges on IT assets affected profitability.
It said rapidly developing AI and other technologies had prompted higher non-cash depreciation and amortisation costs.
Hugo Boss has also raised its capital expenditure forecast to between four per cent and five per cent of annual sales, compared with approximately four per cent previously.
The increase includes the acquisition of a logistics property that the business had previously leased.
Chief executive Daniel Grieder said the retailer’s third-quarter performance reflected its ongoing restructuring alongside difficult trading conditions.
He said the company had made progress on gross margins and operating efficiencies but expected demand to remain volatile during the final quarter.
It is continuing to implement its Claim 5 Touchdown strategy, which focuses on improving its brand positioning, distribution network and profitability.
Inventories fell 14 per cent year on year during the quarter, while free cash flow before leases increased to £129.5m.
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