Two hundred and fifty to three hundred million euros. That's the operating profit range Hugo Boss now expects for 2026, and it's the first forecast the company has published since Mike Ashley's Frasers Group took majority control. New owner, lower number. Welcome to the board. You're listening to Fashion Business Daily. It's Wednesday, November 4, and we have three stories. Hugo Boss reports a weaker third quarter and lowers its full-year guidance. Marks and Spencer more than doubles first-half profit, and says its fashion business gained share while the UK clothing market shrank. And Interbrand's annual ranking puts Hermès ahead of Louis Vuitton for the first time, while Gucci's brand value falls by almost a third.
Benjamin Fitzgerald, writing for FashionNetwork:
Looking ahead, Hugo Boss now expects currency-adjusted group sales to decline in the high single-digit percentage range for 2026, and EBIT to range between €250 million and €300 million in 2026.
Results came out Tuesday, November 3. Third-quarter sales were 946 million euros, down 5 percent on a currency-adjusted basis by the company's count. Operating profit fell 15 percent to 81 million euros, an 8.6 percent margin. Net income was down about 18 to 19 percent, to 49 million euros. On the call, CFO Ivica Maric said gross margin rose 220 basis points to 63.6 percent, and inventories were down 14 percent. Break it down by brand, because that's where it gets ugly. Boss is down 2 percent. Hugo is down about 16 percent. Modaes puts Hugo at 133 million euros for the quarter, and Boss at 813 million. By region, EMEA fell about 7 percent, with the company pointing to weak demand in France and the UK. In its own stores, sales fell 8 percent currency-adjusted, according to the CFO, on lower traffic, store closures and the push to sell at full price. Modaes counts 458 company-owned stores at the end of September, down from 485 at the end of 2025. So margins are better and the shelves are leaner, but fewer people are buying. And a 16 percent drop at Hugo isn't the economy. That's a product problem. People just aren't excited about it. Here's the detail I'd flag on the guidance. Maric told analysts the profit cut has two causes of roughly equal weight. One is lower sales spreading fixed costs thinner. The other is higher depreciation, because the company is shortening the useful lives of some IT and software assets. That second half is a non-cash accounting change, not lost demand. He also said free cash flow this year will be well below what the Claim 5 Touchdown plan originally assumed. And the outlook for next year? Not much better yet. CEO Daniel Grieder said order intake for the coming season is below last year, and the start of the fourth quarter hasn't shown a meaningful change. He also said four Boss stores in France were looted during recent protests, in Grenoble, Lyon, Marseille and Bordeaux. Only Bordeaux has reopened. Now the ownership part. That's what makes this more than a normal guidance cut. We covered Frasers taking control in late October. Modaes reports Frasers reached 50.08 percent on October 23, after its June tender offer at 38 euros a share got it only to 47.89 percent. Michael Murray now chairs the supervisory board, and Maric replaced Yves Müller as CFO on October 1. Grieder used the call to call Frasers a constructive partner and said he and Murray share a view of the strategy. Of course he did. It's your first earnings call with a new majority owner. You say nice things. Maybe so. But Maric also said he'll review the company's strategic targets and how it manages its balance sheet and cash. Under a new controlling shareholder, that's the line I'd watch most closely.
Vahid Karaahmetovic, reporting for Investing.com:
Fashion, Home & Beauty sales increased 17.5%, generating adjusted operating profit of £150.5 million with a margin of 7.5%. Food volume growth of 11.9% was driven by reinvestment in value and quality, while Fashion gained market share despite availability constraints and a 5.5% decline in the overall clothing market.
Marks and Spencer reported this morning for the six months to September 26. Adjusted pretax profit was 403.2 million pounds, up from 184.1 million a year earlier, and just ahead of the analyst consensus of 399 million. Group sales rose 16.2 percent to 9.26 billion pounds. Fashion up 17 and a half percent while the clothing market falls five and a half? In the same quarter Hugo Boss is blaming British shoppers? That's a big gap. It is, but look at what it's being compared with. Investing.com says the growth reflects recovery from last year's cyber incident, so the base period was badly hurt. Doubling profit off that base is a recovery, not proof the business has grown that much. The market-share claim is the stronger signal, and that's the company's own account. It also says it got there despite stock availability problems. Fine, but give them some credit. If people are picking M&S clothes while the rest of the market shrinks, somebody there got the product right. The rest of the report fits that. International sales rose 22.1 percent. M&S completed 18 store projects in the half, and it has net funds of 374.7 million pounds excluding leases. The interim dividend is up 16.7 percent to 1.4 pence. The company says it's moving from four years of reshaping into reinvesting for growth, including style, new stores and lower-cost supply chain capacity. And the full year? M&S expects full-year adjusted pretax profit in line with current market expectations, so no raise. The second half won't get the same easy comparison, and that's when we'll see how much of the share gain holds.
CPP-Luxury, on Interbrand's Best Global Brands 2026 report:
Hermès added 10.6 percent to reach $45.2 billion in brand value, taking No. 15 and a place in the global top 20. Louis Vuitton slipped 6.9 percent to $45.1 billion and fell to No. 16, just below it. Only $100 million now separates the two houses.
One caveat first. Brand value is Interbrand's own estimate from its methodology. It isn't revenue and it isn't market capitalization, so take it as one consultancy's view of brand strength. Still, by Interbrand's count, this is the first time Hermès has been the world's most valuable luxury brand. And the bigger story is at the bottom of the list. Gucci's brand value is down 30.7 percent to 8.1 billion dollars. It dropped 24 places to number 93. That's the sharpest decline in the luxury sector. Interbrand cites weaker desirability and soft performance in key markets, even with the creative reset. We covered Kering's third quarter in late October. CPP-Luxury notes Gucci revenue fell 4 percent as reported, and 6 percent at constant exchange rates, which missed forecasts. That's what happens when you swap designers every couple of years and expect people to stay excited. You can't schedule desire on a corporate calendar. Other luxury fashion names lost ground too. Dior fell 5 percent to 8.9 billion dollars, and Prada fell 15.1 percent to 7.6 billion, dropping ten places to number 96. The gainers were Chanel, up 8.1 percent to 32.9 billion, and the jewelers. Cartier rose 9.4 percent and Tiffany 6.2 percent. Chanel's the one I'd point to. Interbrand credits Matthieu Blazy with bringing in new energy while keeping the house codes. When the clothes are good, people notice. There's also a pricing side to Chanel. CPP-Luxury's own analysis has the Medium Classic Flap up 95 percent in six years, to 11,300 dollars, which it reads as a push toward Hermès-level exclusivity. So part of the brand-value gain may be pricing power, not just creative energy. Interbrand doesn't break that out. Fair. But if the clothes weren't good, nobody would pay those prices. Interbrand's verdict is that luxury is polarizing, and that heritage alone no longer guarantees growth. Interbrand chief executive Gonzalo Brujó said strong brands can't assume their reputation will carry them anymore. The ranking doesn't move a sales figure by itself. But it does line up with what the quarterly numbers have been showing.
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So my takeaway: the brands people still want are pulling away from the ones selling on reputation. And the next few quarters will show which side Hugo Boss ends up on. That's Fashion Business Daily, a Lantern Podcast. I'm Charlotte, with Joey, and we'll be back tomorrow, Thursday, November 5.