Hugo Boss has posted better-than-expected second-quarter operating profit and maintained its full-year outlook, despite weaker demand pushing sales down nine per cent.

The company’s earnings before interest and tax fell 28 per cent to €59m (£51m) during the quarter, from €81m a year earlier.

However, the result surpassed analysts’ average forecast of €52m, while its EBIT margin narrowed from 8.1 per cent to 6.5 per cent.

Sales dropped nine per cent on a currency-adjusted basis to €905m (£786m), marginally below the €907m expected by analysts. On a reported basis, revenue was down 10 per cent from €1bn last year.

Hugo Boss attributed the decline to its ongoing brand and distribution overhaul, alongside subdued consumer spending and geopolitical uncertainty.

Sales across Europe, the Middle East and Africa fell 13 per cent on a currency-adjusted basis, with demand weakening in Germany, the UK and France.

Lower tourism and reduced store traffic in the Middle East also weighed on the region.

The Americas proved more resilient, with sales down one per cent, while Asia-Pacific revenue declined five per cent.

The retailer’s directly operated stores and ecommerce channels recorded an eight per cent sales drop, while wholesale revenue fell ten per cent. Sales through Hugo Boss’s own digital channels plunged 18 per cent to €64m as the group prioritised full-price trading.

Despite the weaker top line, Hugo Boss’s gross margin increased two percentage points to 64.9 per cent, supported by sourcing efficiencies, higher prices and a greater proportion of products sold at full price.

Operating expenses were cut four per cent, while inventories fell 15 per cent year on year.

Hugo Boss chief executive Daniel Grieder said the quarter represented “another important step” in delivering its Claim 5 Touchdown transformation strategy.

He added: “Gross margin improved significantly, inventories declined, and free cash flow generation remained strong.”

The company’s strategy includes simplifying its product ranges, improving store productivity and tightening distribution to reduce discounting and strengthen its Boss and Hugo brands.

It closed a net 21 stores during the first half, predominantly as leases expired, while membership of its Hugo Boss XP loyalty programme rose 16 per cent to more than 14 million.

Almost half of new members came from younger customer groups.

Hugo Boss maintained its 2026 guidance, forecasting a mid-to-high single-digit decline in currency-adjusted sales and operating profit of between €300m and €350m.

It now expects EMEA revenue to fall by a high-single-digit to low-teens percentage, while sales in the Americas and Asia-Pacific are forecast to decline by low-to-mid single digits.

In other Hugo Boss news, the company faces a €38-per-share takeover offer from Frasers Group.

Its management and supervisory boards have recommended that shareholders reject the approach, arguing that it undervalues the fashion business.