Hugo Boss expects a return to growth in 2027 as it rolls out Claim 5 Touchdown, its sharpened strategic plan designed to realign, simplify, and strengthen the business through 2028. The outlook comes as 2026 is designated a deliberate reset year, with currency-adjusted sales projected to decline mid- to high-single digits amid brand and channel realignment.

Hugo Boss expects growth to return in 2027 as it launches Claim 5 Touchdown, a strategy focused on realignment in 2026 and stronger brand, distribution, and operational execution through 2028.
The plan targets €300 million (~$349.69 million) annual free cash flow, an EBIT margin of around 12 per cent, and improved efficiency to strengthen long-term profitable growth.

The realignment phase will affect near-term performance. Despite expected gross margin improvements from sourcing efficiencies and selective price adjustments, EBIT is projected between €300 million (~$349.69 million) and €350 million in 2026.

“2026 will be a year of consolidation and realignment and an important step toward positioning Hugo Boss for long-term profitable growth. While we expect a temporary decline in sales, we will continue to drive our efficiency agenda along the value chain to safeguard margins and strongly accelerate cash flow generation. With this stronger financial foundation, we are well positioned to return to top- and bottom-line growth from 2027 onward and progress toward our long-term EBIT margin ambition of around 12 per cent, reinforcing our commitment to delivering value to all shareholders,” Yves Muller, chief financial officer and chief operating officer of Hugo Boss, added.

The plan builds on the momentum of Claim 5, which has driven robust brand performance since 2021. Both Boss and Hugo achieved a combined CAGR of 22 per cent between 2020 and 2024, supported by global market share gains and substantial structural investments.

The company expects free cash flow to reach around €300 million (~$349.69 million) annually through 2028, nearly tripling recent levels.

Execution will centre on three priorities: brand, distribution, and operational excellence.

Under Brand Excellence, Hugo Boss aims to elevate brand relevance and customer loyalty. Boss Menswear will continue to build on its 24/7 lifestyle positioning. Boss Womenswear will shift toward a tighter essentials-led assortment to strengthen appeal among female consumers, while Hugo will sharpen its identity with a more accessible, contemporary tailoring focus.

A new organisational structure with dedicated menswear and womenswear powerhouses is expected to unlock efficiencies across both brands. Marketing spend is set at around 7 per cent of Group sales, prioritising high-return initiatives and partnerships such as Beckham x Boss.

The company’s Distribution Excellence pillar targets a more curated, higher-quality footprint. Hugo Boss will optimise its own retail store network to improve experience and productivity, strengthen wholesale through strategic partnerships and selective assortments, and expand its franchise model.

Digital commerce will remain a critical driver, with deeper integration aimed at seamless customer journeys. Regionally, the company plans to build further in the US and China, tailor brand activity to local needs, leverage its strong European base for market share gains, and tap opportunities in emerging markets.

Through Operational Excellence, Hugo Boss seeks to enhance profitability by capitalising on past investments. Key initiatives include vendor consolidation, a sea-freight-first logistics strategy, shorter lead times, and the expanded use of AI and advanced planning tools. Automation and an upgraded logistics network are expected to strengthen back-end efficiency and support long-term growth.

Financially, Claim 5 Touchdown prioritises profitability and cash generation. The company aims to outpace market growth and deliver an EBIT margin of around 12 per cent over the medium to long term. Capital expenditure will be reduced to 3 to 4 per cent of Group sales, while inventory is expected to steadily decline towards 20 per cent of sales by 2028.

“Following the successes of recent years, we are now deliberately taking a step back to prepare for tomorrow’s growth. Our focus in the coming years will be on the ongoing optimisation in the areas of brand, distribution, and operations with the clear ambition to transform them from great to excellent. Our vision is clear: to be the premium, tech-driven, customer-centric global fashion platform,” Daniel Grieder, chief executive officer of Hugo Boss, said in a release.

As part of its capital allocation framework, the company reaffirmed its commitment to maintaining shareholder returns through dividends and share buybacks while reducing financial leverage and preserving headroom for future M&A. It will also work to maintain strong investment-grade ratings from S&P (BBB) and Moody’s (Baa2).

Hugo Boss said Claim 5 Touchdown will sharpen execution, reinforce operational discipline, and position the company to convert strategic focus into measurable financial results.

Fibre2Fashion News Desk (HU)