Hugo Boss Q3 net income rises 7% as cost savings offset sales decline

Investing.com -- Hugo Boss on Tuesday reported a 7% rise in third-quarter profit as tight cost control and sourcing efficiencies offset a softer topline and currency headwinds. The German fashion group said net income reached €60 million, up from €56 million a year earlier, while sales declined 4% to €989 million, or 1% on a currency-adjusted basis.

Operating profit (EBIT) remained stable at €95 million, with the EBIT margin improving to 9.6% from 9.3%. Gross margin rose by 100 basis points to 61.2%, supported by lower freight costs, more favorable product costs and continued efficiency gains.

Operating expenses fell 3% to €510 million, reflecting lower selling, marketing and administrative costs. Marketing expenses declined 8% to €70 million, or 7.1% of sales, while administrative costs slipped 2% to €90 million.

“Despite ongoing global market volatility in Q3, we remained focused on our strategic priorities, emphasizing long-term brand strength over short-term gains,” chief executive Daniel Grieder said. “We achieved meaningful efficiency gains, delivering notable gross margin expansion and streamlined expenses.”

Analysts at RBC Capital Markets said, sales and EBIT came in slightly below consensus expectations, but earnings per share exceeded forecasts on a lower financial result. 

EPS rose to €0.85, compared with market expectations of €0.82, as financial expenses fell 34% to €12 million due to favorable currency effects and reduced interest charges. 

RBC described the results as “broadly in line with market expectations” and noted that “cost control remains good.”

Regional results reflected uneven market conditions. Currency-adjusted sales in the Americas increased 3%, supported by modest growth in the United States and double-digit gains in Latin America. 

In Europe, the Middle East and Africa, revenue fell 2%, with declines in the United Kingdom offsetting growth in Germany and France. 

Sales in Asia/Pacific were down 4%, mainly because of lower volumes in China, while Japan and Southeast Asia recorded small increases.

By brand, BOSS Menswear was flat year over year on a currency-adjusted basis, supported by the latest BECKHAM x BOSS collection and the BOSS Spring/Summer 2026 fashion show in Milan.

BOSS Womenswear declined 9%, and HUGO fell 5%, as the company continued to refine assortments and distribution channels.

Digital sales rose 2%, driven by growth on hugoboss.com and partner sites. Brick-and-mortar retail sales were stable, while wholesale revenue declined 5% because of delivery timing expected to benefit the next quarter.

Free cash flow increased 63% to €66 million, supported by higher capital expenditure efficiency. Trade net working capital rose 11% on a currency-adjusted basis to €909 million, reflecting a 5% rise in inventories and reduced trade payables.

HUGO BOSS reaffirmed its full-year 2025 outlook, projecting sales and EBIT at the lower ends of guidance ranges because of persistent currency pressure.

The company expects annual revenue between €4.2 billion and €4.4 billion and EBIT between €380 million and €440 million. Currency headwinds are expected to reduce sales by about €100 million and EBIT by up to €20 million. 

Capital expenditure is forecast at the lower end of €200 million to €250 million, while trade net working capital as a percentage of sales is expected at 19% to 20%.