Q4 2025 Hugo Boss AG Earnings Call

March 10, 2026

Speaker #1: Ladies and gentlemen, welcome to the Q4 full-year 2025 results conference call and live webcast. I am Sandra, the course call operator. I would like to remind you that all participants have been listened only mode and the conference is being recorded.

Operator: Ladies and gentlemen, welcome to the Q4 full year 2025 results conference call and live webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants are in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Christian Stöhr, Senior Vice President, Investor Relations. Please go ahead, sir.

Speaker #1: The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone.

Speaker #1: For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Christian Stoehr, Senior Vice President, Investor Relations.

Speaker #1: Please go ahead, sir.

Speaker #2: Good morning, everyone, and welcome to our full-year 2025 financial results presentation hosted by Daniel Grieder, CEO of Hugo Boss, and Yves Muller, CFO and COO.

Christian Stöhr: Good morning, everyone, and welcome to our Full Year 2025 Financial Results Presentation hosted by Daniel Grieder, CEO of Hugo Boss, and Yves Müller, CFO and COO. Today's conference call will be structured in three parts. Daniel will begin by outlining the key strategic milestones we achieved in 2025. Yves Müller will then walk you through our financial performance for the past fiscal year and elaborate in detail on our outlook for 2026. Before I hand over to Daniel, allow me to remind you that all revenue-related growth rates will be discussed on a currency-adjusted basis unless otherwise specified. During the Q&A session, please limit your questions to a maximum of two. Let's get started, and over to you, Daniel.

Speaker #2: Today's conference call will be structured in three parts. Daniel will begin by outlining the key strategic milestones we achieved in 2025. Yves will then walk you through our financial performance for the past fiscal year and elaborate in detail on our outlook for 2026.

Speaker #2: Before I hand over to Daniel, allow me to remind you that all revenue-related growth rates will be discussed on our currency-adjusted basis unless otherwise specified.

Speaker #2: During the Q&A session, please limit your questions to a maximum of two. So let's get started, and over to you, Daniel. Thank you, Christian.

Daniel Grieder: Thank you, Christian. Good morning, everyone, and thank you for joining us today. Let me begin by saying that 2025 unfolded against the challenging industry backdrop. Macroeconomic and geopolitical volatility kept uncertainty high and consumer sentiment cautious across many key markets. This led to reduced traffic as well as increased price sensitivity among consumers. In such an environment, it was essential to stay agile and act with clarity and determination. Throughout the year, we focused on the levers within our control, acted with discipline, and took deliberate decisions to set the right course for long-term business success. While 2025 clearly does not reflect the full potential of Hugo Boss, I'm proud of how our teams have navigated the highly volatile market environment and delivered on our commitments for the year, both on the top and bottom line.

Speaker #2: Good morning, everyone, and thank you for joining us today. Let me begin by saying that 2025 unfolds against a challenging industry backdrop. Macroeconomic and geopolitical volatility kept uncertainty high, and consumer sentiment causes across many key markets.

Speaker #2: This led to reduced traffic as well as increased price sensitivity among consumers. In such an environment, it was essential to stay agile and act with clarity and determination.

Speaker #2: Throughout the year, we focused on the levers within our control, acted with discipline, and took deliberate decisions to set the right course for long-term business success.

Speaker #2: And while 2025 clearly does not reflect the full potential of Hugo Boss, I'm proud of how our teams have navigated the highly volatile market environment and delivered on our commitments for the year, both on the top and bottom line.

Speaker #2: In 2025, we generated sales of $4.3 billion, up 2% year over year, and broadly in line with the global apparel industry. Our bottom line development has especially what is especially strong with EBIT up 8% to $391 million and earnings per share up 17% to €3.61.

Daniel Grieder: In 2025, we generated sales of EUR 4.33 billion, up 2% year-over-year, and broadly in line with the global apparel industry. Our bottom line development was especially strong with EBIT up 8% to EUR 391 million and earnings per share up 17% to EUR 3.61. In addition, we delivered robust free cash flow of EUR 499 million, underscoring the cash generative strength of our business model. Yves will provide more details on this shortly. What is equally important to me lies beneath these numbers, the strategic progress that reinforces our confidence looking ahead.

Speaker #2: In addition, we delivered robust free cash flow of €499 million, underscoring the cash-generative strengths of our business model. We will provide more details on this shortly.

Speaker #2: But what is equally important to me lies beneath these numbers: the strategic progress that reinforces our confidence looking ahead. This includes the continued strengths and appeal of our brands, the sustained consumer relevance of BOSS Menswear, the initiated refinement of BOSS Womenswear and HUGO, and the decisive choices under Claim 5 Touchdown to realign our business in 2026 and prepare for profitable growth thereafter.

Daniel Grieder: This includes the continued strength and appeal of our brands, the sustained consumer relevance of Boss Menswear, the initiated refinement of Boss Womenswear, and Hugo, and the decisive choices on the CLAIM 5 touchdown to realign our business in 2026 and prepare for profitable growth thereafter. Let me briefly reflect on these highlights. In times of macroeconomic and geopolitical uncertainty, the decisions often center on efficiency measures. Yet our most important asset remains the strength of our brands and the relationship we build with our customers. This is what sets us apart from others and what will define our long-term success. Throughout the year, we continue to create brand moments that truly inspire consumers and deepen their emotional connection with Boss and Hugo. I'm especially encouraged by the progress made with our loyal customers. In 2025, our membership base grew by 20%.

Speaker #2: Let me be briefly reflect on these highlights. In times of macroeconomic and geopolitical uncertainty, the decisions often center on efficiency measures. Yet our most important asset remains the strengths of our brands and the relationship we build with our customers.

Speaker #2: This is what sets us apart from others and what will define our long-term success. Throughout the year, we continue to create brand moments that truly inspire consumers and deepen their emotional connection with BOSS and HUGO.

Speaker #2: I'm especially encouraged by the progress made with our loyal customers. In 2025, our membership space grew by 20%. Our loyalty program, Hugo Boss XP, meanwhile counts 30 million registered customers and we are making further strides in reengaging and activating members over the long term.

Daniel Grieder: Our loyalty program, HUGO BOSS XP, meanwhile counts 30 million registered customers, and we are making further strides in re-engaging and activating members over the long term. This achievement was possible because we continued to invest in our brands, keeping our marketing spend more or less stable at around 7% of sales. With powerful, authentic, and highly personal campaigns, we further elevated our storytelling. Our BOSS Winter 2025 campaign, Be the Next, featured talents such as Ishaan Khatter, S.Coups, and Amelia Gray, who all shared their individual journeys of ambition and success. At the same time, our BOSS Holiday X Dive campaign combined elevated design with a warm and playful narrative. The strong resonance of these activations, both offline and online, contributed to our successful Q4 in a meaningful way.

Speaker #2: This achievement was possible because we continue to invest in our brands, keeping our marketing spend more or less stable at around 7% of sales.

Speaker #2: With powerful, authentic, and highly personal campaigns, we further elevated our storytelling. Our Boss Winter 2025 campaign beat the next featured talents such as Ishan Ketter, S-Cubes, and Amelia Gray, who all shared their individual journeys of ambition and success.

Speaker #2: At the same time, our BOSS Holiday X5 campaign combined elevated design with a warm and playful narrative. The strong resonance of these activations both off- and online contributed to our successful final quarter in a meaningful way.

Speaker #2: The second aspect is our BOSS Menswear business, which grew 3% in 2025. Representing around 80% of our group sales, BOSS Menswear remained the core of our company and continues to demonstrate its leadership in the upper premium menswear market, even in a challenging environment.

Daniel Grieder: The second aspect is our Boss Menswear business, which grew 3% in 2025, representing around 80% of our group sales. Boss Menswear remained the core of our company and continues to demonstrate its leadership in the upper premium menswear market, even in a challenging environment. With a strong and consistent brand identity, the brand remains the go-to destination in modern tailoring, while also winning across casual and active wear. Our successful 24/7 lifestyle positioning continues to resonate strongly with consumers and was a key driver of our growth. Across brand lines, we saw healthy demand patterns underscoring the versatility of Boss Menswear across multiple wearing occasions. Additionally, our partnership with David Beckham further strengthened brand relevance. The global response to this collaboration must have been very encouraging, driving strong engagement and reinforcing Boss Menswear as a global player.

Speaker #2: With a strong and consistent brand identity, the brand remains the go-to destination in modern tailoring, while also winning across casual and activewear. Our successful 24/7 lifestyle positioning continues to resonate strongly with consumers and was a key driver of our growth.

Speaker #2: Across brand lines, we saw healthy demand patterns, underscoring the versatility of BOSS Menswear across multiple wearing occasions. Additionally, our partnership with David Beckham further strengthened brand relevance.

Speaker #2: The global response to this collaboration has been very encouraging, driving strong engagement and reinforcing Boss Menswear as a global player. Now, let me turn to Boss Womenswear and Hugo, which this line: 5% and 4% in 2025, respectively.

Daniel Grieder: Now let me turn to BOSS Womenswear and HUGO, which declined 5% and 4% in 2025, respectively. This development reflects the deliberate brand and distribution measures we have initiated during the year to set both brands up for long-term success. Our focus has been on simplifying assortments and refining distribution to strengthen brand identity and sharpen positioning. These steps are essential to ensure greater product consistency and stronger resonance with our target consumer. For me, 2025 therefore marked a turning point here, not because of the financial outcome, but because of the strategic direction we have set. With our new powerhouse structure and the new leadership teams established, we have built the organizational foundation required to drive this transition with conviction. Yet, the refinement of BOSS Womenswear and HUGO is not an isolated initiative.

Speaker #2: This development reflects the deliberate brand and distribution measures we have initiated during the year to set both brands up for long-term success. Our focus has been on simplifying assortments and refining distribution to strengthen brand identity and sharpen positioning.

Speaker #2: These steps are essential to ensure greater product consistency and stronger resonance with our target consumer. For me, 2025, therefore, marked a turning point here—not because of the financial outcome, but because of the strategic direction we have set.

Speaker #2: With our new powerhouse structure and the new leadership teams established, we have built the organizational foundation required to drive this transition with conviction. Yet the refinement of BOSS Womenswear and HUGO is not an isolated initiative.

Speaker #2: It's an integral part of the strategic choices we made to strengthen our foundation. While 2026 will continue to be shaped by these measures, we are executing with clarity and focus.

Daniel Grieder: It's an integral part of the strategic choices we made to strengthen our foundation. While 2026 will continue to shape this. Shaped by these measures we are executing with clarity and focus. I'm confident that by the end of this year, we will operate from a strengthened position. All of the mentioned decisions are laying the groundwork for CLAIM 5 touchdown, our execution framework through 2028. While our overall direction remains consistent with CLAIM 5, our emphasis now shifts from scale to quality of growth, with a sharper focus on profitability and cash generation. This is why we focus on three fields of excellence: brand, distribution, and operations. Strengthening these pillars will reinforce brand equity of BOSS and HUGO, and enhance the efficiency and financial quality of our business.

Speaker #2: I'm confident that by the end of this year, we will operate from a strengthened position. All of the mentioned decisions are laying the groundwork for claim five touchdown.

Speaker #2: Our execution framework through 2028. While our overall direction remains consistent with claim five, our emphasis now shifts from scale to quality of growth, with a sharper focus on profitability and cash generation.

Speaker #2: This is why we focus on three fields of excellence: brand, distribution, and operations. Strengthening these pillars will reinforce the brand equity of BOSS and HUGO and enhance the efficiency and financial quality of our business.

Speaker #2: With an organization fully aligned towards execution and delivery, this sets a clear path towards renewed growth from 2027 onwards. A key outcome of the increased focus on quality is the acceleration of free cash flow.

Daniel Grieder: With an organization fully aligned towards execution and delivery, this sets a clear path towards renewed growth from 2027 onwards. A key outcome of the increased focus on quality is the acceleration of free cash flow. Over the transformation period, we target an average of around EUR 300 million per year in free cash flow after leases. This will allow us not only to continue investing in our brands and platform, but also to create greater optionality in how we return capital to our shareholders. A disciplined balanced capital allocation approach remains firmly embedded in our strategic way forward. Against this backdrop, launching a share buyback program of up to EUR 200 million is a logical next step for us.

Speaker #2: Over the touchdown period, we target an average of around €300 million per year in free cash flow after leases. This will allow us not only to continue investing in our brands and platform, but also to create greater optionality in how we return capital to our shareholders.

Speaker #2: A disciplined, balanced capital allocation approach remains firmly embedded in our strategic way forward. Against this backdrop, launching a share buyback program of up to €200 million is a logical next step for us.

Speaker #2: The program to be completed by the end of 2027 underscores our strong financial position and reflects our confidence in the long-term value-creation potential of Hugo Boss.

Daniel Grieder: The program, to be completed by the end of 2027, underscores our strong financial position and reflects our confidence in the long-term value creation potential of Hugo Boss. Importantly, this evolution in our capital return mix does not change our overall commitment to shareholder returns. Instead, it gives us a greater flexibility in the current market environment, enabling us to allocate capital where it creates the most value, while continuing to invest in strategic initiatives that will drive sustainable, profitable growth. Before we turn to the numbers, let me briefly outline a few brand and product initiatives that will support our momentum during 2026. We kicked off the year with the BOSS fall/winter 2026 fashion show in Milan two weeks ago. The collection paid tribute to our heritage in craftsmanship and tailoring, reinterpreted with a modern, purposeful edge.

Speaker #2: Importantly, this evolution in our capital return mix does not change our overall commitment to shareholder returns. Instead, it gives us greater flexibility in the current market environment, enabling us to allocate capital where it creates the most value, while continuing to invest in strategic initiatives that will drive sustainable, profitable growth.

Speaker #2: Before we turn to the numbers, let me briefly outline a few brand and product initiatives that will support our momentum during 2026. We kicked off the year with the BOSS Fall/Winter 2026 fashion show in Milan two weeks ago.

Speaker #2: The collection paid tribute to our heritage, craftsmanship, and tailoring, repeated with a modern, purposeful edge. The next highlights will be the third drop of our Beckham by Boss collection and the launch of the Hugo Summer 2026 campaign tomorrow, which brings Hugo's refreshed brand narrative to life in a clear and contemporary way.

Daniel Grieder: The next highlight will be the third drop of our BECKHAM x BOSS collection and the launch of the HUGO summer 2026 campaign tomorrow, which brings HUGO's refreshed brand narrative to life in a clear and contemporary way. With this, ladies and gentlemen, I will now hand over to Yves for a more detailed look at the financial performance. Yves, over to you.

Speaker #2: And with this, ladies and gentlemen, I will now hand over to Yves for a more detailed look at the financial performance. Yves, over to you.

Speaker #1: Thank you, Daniel, and also from my side, a warm welcome to all of you. I will now walk you through our operational financial performance for 2025, followed by our expectations for full year 2026.

Yves Müller: Thank you, Daniel, and also from my side, a warm welcome to all of you. I will now walk you through our operational and financial performance for 2025, followed by our expectations for full year 2026. As Daniel outlined, 2025 was marked by a challenging consumer environment, with muted demand and softer traffic across many of our key markets. Against this backdrop, our priorities were clear, sustaining brand and product momentum to support the top line while protecting profitability and cash flow through strict cost and capital efficiency. Supported by impactful brand initiatives and a strong finish to the year, we delivered on our financial commitments. Group sales reached EUR 4.3 billion, up 2% year-on-year. At the same time, disciplined cost management and operational focus translated into strong bottom-line improvements.

Speaker #1: As Daniel outlined, 2025 was marked by a challenging consumer environment, with muted demand and softer traffic across many of our key markets. Against this backdrop, our priorities were clear: sustaining brand and product momentum to support the top line, while protecting profitability and cash flow through strict cost and capital efficiency.

Speaker #1: Supported by impactful brand initiatives and a strong finish to the year, we delivered on our financial commitments. Group sales reached €4.3 billion, up 2% year on year.

Speaker #1: At the same time, disciplined cost management and operational focus translated into strong bottom-line improvements. EBIT increased by 8% to €391 million, while our EBIT margin expanded 80 basis points to 9.2%.

Yves Müller: EBIT increased by 8% to EUR 391 million, while our EBIT margin expanded 80 basis points to 9.2%. This margin progression reflects structural efficiency measures, continued sourcing gains, and tight expense control across the organization. Importantly, it also demonstrates our ability to grow earnings even in a muted demand environment. Our full year performance was supported by a robust Q4 with clear acceleration in both revenue and earnings, despite a significantly tougher comparison base. Group sales increased by 7% with growth across all channels. Notably, brick-and-mortar retail returned to growth, including a modest increase in comp store sales. Brick-and-mortar wholesale and digital also delivered robust growth, supported by higher deliveries to partners, including a timing shift of around EUR 20 million from Q1 2026 into Q4 2025. The top-line acceleration translated into a meaningful improvement in profitability.

Speaker #1: This margin progression reflects structural efficiency measures, continued sourcing gains, and tight expense control across the organization. Importantly, it also demonstrates our ability to grow earnings even in a muted demand environment.

Speaker #1: Our full-year performance was supported by a robust fourth quarter, with clear acceleration in both revenue and earnings, despite a significantly tougher comparison base.

Speaker #1: Group sales increased by 7%, with growth across all channels. Notably, brick-and-mortar retail returned to growth, including a modest increase in comp store sales. Brick-and-mortar wholesale and digital also delivered robust growth, supported by higher deliveries to partners, including a timing shift of around €20 million from Q1 2026 into Q4 2025.

Speaker #1: The top-line acceleration translated into a meaningful improvement in profitability. EBIT rose by 22% to €154 million, and the EBIT margin expanded by 190 basis points to 12%, reflecting operating leverage on higher volumes together with continued tight control of operating expenses.

Yves Müller: EBIT rose by 22% to EUR 154 million, and EBIT margin expanded 190 basis points to 12%, reflecting operating leverage on higher volumes together with continued tight control of operating expenses. With this, let's now take a closer look at the regional top-line trends. In the EMEA, revenue increased by 2% in 2025, driven by growth in Germany and France. In the Q4, the region accelerated to 9% growth, supported by a successful holiday season, underscoring the resilience of our core European markets. In the Americas, revenues grew 3% for the full year, reflecting sequential improvements in the important US market throughout 2025 and double-digit sales increases in Latin America.

Speaker #1: With this, let's now take a closer look at the regional top-line trends. In the MEA, revenue increased by 2% in 2025, driven by growth in Germany and France.

Speaker #1: In the fourth quarter, the region accelerated to 9% growth, supported by a successful holiday season, underscoring the resilience of our core European markets. In the Americas, revenues grew 3% for the full year, reflecting sequential improvements in the important US market throughout 2025 and double-digit sales increases in Latin America.

Speaker #1: In the fourth quarter, gross accelerated to 6%, with solid momentum in the US, supported by targeted brand activations and the broad appeal of our 24/7 lifestyle offering.

Yves Müller: In Q4, growth accelerated to 6% with solid momentum in the US, supported by targeted brand activations and the broad appeal of our 24/7 lifestyle offering. Meanwhile, Asia Pacific declined by 5% for the full year, primarily due to subdued demand in China. This was partially offset by a resilient performance in Southeast Asia and Pacific, including strong contribution from Japan. In Q4, regional revenues were down 1%, still weighed by continued softness in China, although trends improved sequentially. Let's now turn to our performance by channel. In brick and mortar retail, full-year revenues remained stable. Importantly, performance improved gradually over the course of the year, with momentum building sequentially and ultimately resulting in 2% revenue growth in Q4. This was supported by a successful holiday season and several brand and product initiatives.

Speaker #1: Meanwhile, Asia-Pacific declined by 5% for the full year, primarily due to subdued demand in China. This was partially offset by a resilient performance in Southeast Asia and the Pacific, including a strong contribution from Japan.

Speaker #1: In the fourth quarter, regional revenues were down 1%, still weighed by continued softness in China, although trends improved sequentially. Let's now turn to our performance by channel.

Speaker #1: In brick-and-mortar retail, full-year revenues remained stable. Importantly, performance improved gradually over the course of the year, with momentum building sequentially and ultimately resulting in 2% revenue growth in the fourth quarter.

Speaker #1: This was supported by a successful holiday season and several brand and product initiatives. At the same time, we started to streamline our store portfolio, initiating the planned net reduction of around 50 stores by 2028.

Yves Müller: At the same time, we started to streamline our store portfolio, initiating the planned net reduction of around 50 stores by 2028. The modest decrease in selling space in 2025 marks the first step, resulting in a leaner network with broadly stable sales productivity despite lower footfall. Brick and mortar wholesale, on the other side, increased 2% in 2025, driven by successful collection deliveries and continued expansion of our global franchise business. In Q4, growth accelerated to 14%, benefiting in part from the positive timing shift I mentioned before. Last but not least, digital revenues grew 7% for the full year and accelerated to 12% in Q4. Growth was primarily driven by digital partners.

Speaker #1: The modest decrease in selling space in 2025 marks the first step, resulting in a leaner network with broadly stable sales productivity despite lower footfall.

Speaker #1: Brick-and-mortar wholesale, on the other side, increased 2% in 2025, driven by successful collection deliveries and continued expansion of our global franchise business. In the fourth quarter, growth accelerated to 14%, benefiting in part from the positive timing shift I mentioned before.

Speaker #1: Last but not least, digital revenues grew 7% for the full year and accelerated to 12% in Q4. Growth was primarily driven by digital partners.

Yves Müller: In contrast, revenues with hugoboss.com remained below prior year levels, reflecting our deliberate focus on full price sales, which weigh on conversion but supports brand equity over time. As this concludes the top-line discussion, let's turn to gross margin. For the full year, gross margin came in at 61.5%, down 20 basis points versus 2024. This mainly reflects external headwinds, including Forex impacts, the promotional market environment, and adverse channel mix effects. These factors more than offset continued sourcing efficiencies and lower freight rates, which improved structural support to margin quality and underlined the resilience of our operating model. In Q4, gross margin amounted to 60.8%, down 160 basis points year-on-year.

Speaker #1: In contrast, revenues with hugoboss.com remained below prior-year levels, reflecting our deliberate focus on full-price sales, which weighed on conversion but supports brand equity over time.

Speaker #1: As this concludes the top-line discussion, let's turn to gross margin. For the full year, gross margin came in at 61.5%, down 20 basis points versus 2024.

Speaker #1: This mainly reflects external headwinds, including forex impacts, the promotional market environment, and adverse channel mix effects. These factors more than offset continued sourcing efficiencies and lower freight rates, which improved structural support to margin quality and underlined the resilience of our operating model.

Speaker #1: In the fourth quarter, gross margin amounted to 60.8%, down 160 basis points year on year. This primarily reflects deliberate inventory measures, including higher wholesale deliveries as well as the targeted use of our controlled outlet business to clear excess merchandise.

Yves Müller: This primarily reflects deliberate inventory measures, including higher wholesale deliveries as well as the targeted use of our controlled outlet business to clear excess merchandise. All measures were fully aligned with our objective of entering 2026 with a clean and healthy inventory base for the successful execution of CLAIM 5 Touchdown. Despite these initiatives, we continued to realize sourcing efficiencies, which partially mitigated the margin impact in the quarter. Let's now move on to our operating expenses, where we demonstrated strong financial discipline throughout the year. In 2025, operating expenses decreased by 3%, contributing to our bottom line improvements. As a percentage of sales, OpEx accounted for 52.4%, which reflects a 100 basis points improvement versus the prior year and underscores our progress in driving structural efficiencies.

Speaker #1: All measures were fully aligned with our objective of entering 2026 with a clean and healthy inventory base for the successful execution of Claim 5 Touchdown.

Speaker #1: Despite these initiatives, we continued to realize sourcing efficiencies, which partially mitigated the margin impact in the quarter. Let's now move on to our operating expenses, where we demonstrated strong financial discipline throughout the year.

Speaker #1: In 2025, operating expenses decreased by 3%, contributing to our bottom-line improvements. As a percentage of sales, OPEX accounted for 52.4%, which reflects a 100-basis-point improvement versus the prior year and underscores our progress in driving structural efficiencies.

Speaker #1: This development was supported by a disciplined approach to selling and marketing expenses, which declined 3% year over year. Within retail, we continued to optimize operations by more closely aligning rent-to-sales and pay-to-sales ratios with evolving traffic trends.

Yves Müller: This development was supported by a disciplined approach to selling and marketing expenses, which declined 3% year-over-year. Within retail, we continued to optimize operations by more closely aligning rent to sales and pay to sales ratios with evolving traffic trends. Consequently, brick-and-mortar retail costs declined by 5% to 22.1% of sales. In marketing, investments decreased by 2% to 7.1% of sales, reflecting our strategic focus on driving marketing effectiveness. At the same time, administration expenses remained broadly stable, demonstrating our commitment to cost control and functions not directly tied to commercial performance. Our sharpened focus on operational excellence and cost discipline translated into robust bottom-line improvements. EBIT increased by 8% to EUR 391 million, resulting in an EBIT margin of 9.2%, up 80 basis points year-over-year.

Speaker #1: Consequently, brick-and-mortar retail costs declined by 5% to 22.1% of sales. In marketing, investments decreased by 2% to 7.1% of sales, reflecting our strategic focus on driving marketing effectiveness.

Speaker #1: At the same time, administration expenses remained broadly stable, demonstrating our commitment to cost control and to functions not directly tied to commercial performance. Our sharpened focus on operational excellence and cost discipline translated into robust bottom-line improvements.

Speaker #1: Effort increased by 8% to €391 million, resulting in an EBIT margin of 9.2%, up 80 basis points year over year. Below the operating line, our financial result improved by 23%, supported by lower interest expenses and a more favorable forex development.

Yves Müller: Below the operating line, our financial result improved by 23%, supported by lower interest expenses and a more favorable Forex development. In addition, the effective tax rate decreased to 25%, further enhancing bottom line performance. As a result, net income after minorities rose by a strong 17%, translating into earnings per share of EUR 3.61. Let me now turn to our balance sheet, starting with inventories. I am particularly pleased with the progress we achieved in 2025, especially in Q4. On a currency adjusted basis, inventory decreased by 10% year-over-year, ending the year at 21.5% of group sales, a reduction of 340 basis points compared to 2024 levels.

Speaker #1: In addition, the effective tax rate decreased to 25%, further enhancing bottom line performance. As a result, net income after minorities rose by a strong 17%, translating into earnings per share of 3 euros and 61 cents.

Speaker #1: Let me now turn to our balance sheet, starting with inventories. I'm particularly pleased with the progress we achieved in 2025, especially in the fourth quarter.

Speaker #1: On a currency-adjusted basis, inventory decreased by 10% year over year, ending the year at 21.5% of Group sales—a reduction of 340 basis points compared to 2024 levels.

Speaker #1: This strong development reflects our disciplined inventory management, including the targeted measures I mentioned earlier, which ensured a healthier, cleaner stock position heading into 2026.

Yves Müller: This strong development reflects our disciplined inventory management, including the targeted measures I mentioned earlier, which ensured a healthier, cleaner stock position heading into 2026. The improvement in inventory quality was further enabled by a more focused assortments and a more precise buying approach. Overall, these efforts provide a much more efficient and productive starting point for the important realignment year ahead. With that, let me now broaden this perspective to overall working capital. On a four-quarter moving average basis, trade net working capital amounted to 20% of group sales, slightly above the prior year level. This primarily reflects higher trade receivables and lower trade payables, which more than offset the reduced inventory position. CapEx, on the other side, totaled EUR 195 million in 2025, down 32% year-on-year.

Speaker #1: The improvement in inventory quality was further enabled by a more focused assortment and a more precise buying approach. Overall, these efforts provide a much more efficient and productive starting point for the important realignment year ahead.

Speaker #1: With that, let me now broaden this perspective to overall working capital. On a four-quarter moving average basis, trade net working capital amounted to 20% of Group sales, slightly above the prior-year level.

Speaker #1: This primarily reflects higher trade receivables and lower trade payables, which more than offset the reduced inventory position. PEPEX, on the other side, totaled €195 million in 2025, down 32% year on year.

Speaker #1: At 4.6% of sales, this reflects our increased focus on investment efficiency, following elevated investment levels in previous years. In 2025, we prioritized maintenance investments, targeted retail refurbishments, and selective digital initiatives, while exercising discipline in all other areas.

Yves Müller: At 4.6% of sales, this reflects our increased focus on investment efficiency following elevated investment levels in previous years. In 2025, we prioritized maintenance investments, targeted retail refurbishments, and selective digital initiatives while exercising discipline in all other areas. This consistent approach not only supported free cash flow, but also marked clear progress towards our midterm ambition of CapEx of around 3 to 4% of sales under CLAIM 5 touchpoints. Taken together, all these factors formed the foundation for our strong cash flow performance. Free cash flow before leases amounted to EUR 499 million, broadly in line with the prior year. Importantly, free cash flow generation was particularly strong in Q4, up 20%, partly reflecting a pull forward of cash flows from 2026 into 2025 linked to the higher year-end deliveries.

Speaker #1: This consistent approach not only supported free cash flow, but also marked clear progress towards our mid-term ambition of CAPEX of around 3 to 4 percent of sales under claim Five Touchdowns.

Speaker #1: Taken together, all these factors formed the foundation for our strong cash flow performance. Free cash flow before leases amounted to €499 million, broadly in line with the prior year.

Speaker #1: Importantly, free cash flow generation was particularly strong in the fourth quarter, up 20%, partly reflecting a pull forward of cash flows from 2026 into 2025 linked to the higher year-end deliveries.

Speaker #1: As a result, free cash flow in 2026 is expected to come in somewhat below our mid-term average. However, our ambition to generate an average of around €300 million per year between 2026 and 2028 after leases remains unchanged, supported by structurally improved margins, disciplined working capital management, and efficient capital expenditure.

Yves Müller: As a result, free cash flow in 2026 is expected to come in somewhat below our midterm average. However, our ambition to generate an average of around EUR 300 million per year between 2026 and 2028 after leases remains unchanged, supported by structurally improved margins, disciplined working capital management, and efficient capital expenditure. Equally important, we closed 2025 with a net financial position before leases of +EUR 48 million, effectively making us debt-free before leases and underscoring the strength of our financial basis. With this strong foundation in place, let me turn to our expectations for fiscal year 2026. As Daniel emphasized earlier already, 2026 will serve as a deliberate year of brand and channel realignment, streamlining our assortments, refining our distribution footprint, and preparing our business for renewed growth from 2027 onwards.

Speaker #1: Equally important, we closed 2025 with a net financial position before leases of plus €48 million, effectively making us debt-free before leases and underscoring the strength of our financial basis.

Speaker #1: With this strong foundation in place, let me turn to our expectations for fiscal year 2026. As Daniel emphasized earlier already, 2026 will serve as a deliberate year of brand and channel realignment, streamlining our assortments, refining our distribution footprint, and preparing our business for renewed growth from 2027 onwards.

Speaker #1: In the consumer environment that remains demanding, these actions are both strategically necessary and value-accretive, as they will strengthen the quality and resilience of our revenue base.

Yves Müller: In a consumer environment that remains demanding, these actions are both strategically necessary and value accretive as they will strengthen the quality and resilience of our revenue base. For full year 2026, we continue to expect group sales to decline in the mid to high single-digit range on a currency adjusted basis. This reflects our deliberate realignment of the business towards higher quality growth. In this context, we are pursuing a more selective distribution approach, including the moderate net reduction of brick-and-mortar retail space, as well as enhancement in distribution quality across wholesale and digital with a clear focus on full price sales. At the same time, we will further streamline product assortments, particularly at Boss Womenswear and HUGO, to sharpen brand positioning and strengthen brand relevance.

Speaker #1: For full year 2026, we continue to expect Group sales to decline in the mid- to high single-digit range on a currency-adjusted basis. This reflects our deliberate realignment of the business towards higher-quality growth.

Speaker #1: In this context, we are pursuing a more selective distribution approach, including a moderate net reduction of brick-and-mortar retail space, as well as enhancement in distribution quality across wholesale and digital, with a clear focus on full-price sales.

Speaker #1: At the same time, we will further streamline product assortments, particularly in both women's wear and HUGO, to sharpen brand positioning and strengthen brand relevance.

Speaker #1: Together, these measures will temporarily weigh on volumes, but they will structurally elevate the quality and sustainability of our revenue base moving forward. Importantly, the quarterly cadence will not be linear.

Yves Müller: Together, these measures will temporarily weigh on volumes, but they will structurally elevate the quality and sustainability of our revenue base moving forward. Importantly, the quarterly cadence will not be linear. Both Q1 and Q4 are anticipated to experience a more pronounced decline in sales compared to the full year trajectory. Besides overall tough comparison basis, this is primarily due to the aforementioned delivery shifts into Q4, which will inevitably weigh on volumes in Q1 2026. From a geographical perspective, we anticipate broadly similar patterns of mid- to high single-digit declines in 2026 across all three regions, consistent with our globally aligned product and distribution strategy.

Speaker #1: Both the first and the fourth quarter are anticipated to experience a more pronounced decline in sales, compared to the prior to the full-year trajectory.

Speaker #1: Besides, overall tough comparison basis, this is primarily due to the aforementioned delivery shifts into Q4, which will inevitably weigh on volumes in the first quarter in 2026.

Speaker #1: From a geographical perspective, we anticipate broadly similar patterns of mid- to high-single-digit declines in 2026 across all three regions, consistent with our globally aligned product and distribution strategy.

Speaker #1: In EMEA, the expected decline is primarily driven by targeted enhancements to distribution quality, particularly across physical and digital wholesale. In the Americas, the development mainly reflects targeted productivity and quality improvements across key consumer touchpoints. In Asia Pacific, the anticipated decline results from brand and channel elevation measures in retail, including selected store closures, combined with a prudent view on the pace of recovery in Chinese consumer demand.

Yves Müller: In EMEA, the expected decline is primarily driven by targeted enhancements to distribution quality, particularly across physical and digital wholesale. In the Americas, the development mainly reflects targeted productivity and quality improvements across key consumer touch points. In Asia Pacific, the anticipated decline results from brand and channel elevation measures in retail, including selected store closures, combined with a prudent view on the pace of recovery in Chinese consumer demand. Moving on to our bottom line. For 2026, we forecast EBIT in a range of EUR 300 to 350 million, reflecting the lower top line leverage as well as our commitment to supporting brand elevation throughout the year.

Speaker #1: Moving on to our bottom line. For 2026, we forecast EBIT in a range of €300 to €350 million, reflecting the lower top-line leverage as well as our commitment to supporting brand elevation throughout the year.

Speaker #1: As with the top line, profitability will be more heavily impacted in the first and fourth quarter, given the volume effects mentioned earlier, as well as anticipated negative currency effects at the beginning of the year in 2026.

Yves Müller: As with the top line, profitability will be more heavily impacted in Q1 and Q4, given the volume effects mentioned earlier, as well as anticipated negative currency effects at the beginning of the year in 2026. At the same time, we expect notable gross margin tailwinds in 2026 from ongoing sourcing efficiencies, selective price increases, and stronger full price execution. Combined with continued OpEx discipline, these measures are expected to support our margin profile during the year. Let me now turn to our capital allocation framework, which remains a core pillar of our long-term value creation agenda, as Daniel made already clear. Thanks to our strong balance sheet and high cash generating capabilities, we are well positioned to continue investing in our business while also delivering attractive shareholder returns. Our overall priorities remain unchanged.

Speaker #1: At the same time, we expect notable gross margin tailwinds in 2026 from ongoing sourcing efficiencies, selective price increases, and stronger full-price execution. Combined with continued OPEX discipline, these measures are expected to support our margin profile during the year.

Speaker #1: Let me now turn to our capital allocation framework, which remains a core pillar of our long-term value creation agenda, as Daniel made already clear.

Speaker #1: Thanks to our strong balance sheet and high cash-generating capabilities, we are well positioned to continue investing in our business while also delivering attractive shareholder returns.

Speaker #1: Our overall priorities remain unchanged. First, to fund our strategy and safeguard the investments required to elevate brand equity. Second, to increase shareholder value in a disciplined and sustainable way.

Yves Müller: First, to fund our strategy and safeguard the investments required to elevate brand equity. Second, to increase shareholder value in a disciplined and sustainable way. Third, to maintain financial resilience and protect our investment-grade ratings. Fourth, to retain sufficient flexibility to pursue M&A opportunities over the medium to long term. Against this backdrop, and supported by our successful performance in 2025 and the strong fundamentals of our company, we have announced a share buyback program of up to EUR 200 million. This initiative, to be completed by the end of 2027, reflects our confidence in the long-term potential of Hugo Boss and underscores our commitment to strengthen shareholder value. The program will be fully financed through ongoing free cash flow with repurchased shares intended for cancellation, reducing the number of shares outstanding and enhancing earnings per shares over time.

Speaker #1: Third, to maintain financial resilience and protect our investment-grade ratings, and fourth, to retain sufficient flexibility to pursue M&A opportunities over the medium to long term.

Speaker #1: Against this backdrop, and supported by our successful performance in 2025 and the strong fundamentals of our company, we have announced a share buyback program of up to €200 million.

Speaker #1: This initiative, to be completed by the end of 2027, reflects our confidence in the long-term potential of Hugo Boss and underscores our commitment to strengthen shareholder value.

Speaker #1: The program will be fully financed through ongoing free cash flow, with repurchased shares intended for cancellation, reducing the number of shares outstanding and enhancing earnings per share over time.

Speaker #1: The buyback underscores our conviction in the strengths of our brands, the resilience of our financial foundation, and the strategic agenda we are pursuing for the years ahead.

Yves Müller: The buyback underscores our conviction in the strengths of our brands, the resilience of our financial foundation, the strategic agenda we are pursuing for the years ahead. At the same time, reflecting the deliberate nature of 2026 as a year of realignment and our disciplined capital allocation approach, we will propose to the AGM a statutory minimum dividend of EUR 0.04 per share for fiscal year 2025. This ensures that we maintain the financial flexibility required to execute our strategic priorities, fund targeted investments, and reinforce our balance sheet in a still highly volatile environment. With this, ladies and gentlemen, let me hand back to Daniel for his closing remarks.

Speaker #1: At the same time, reflecting the deliberate nature of 2026 as a year of realignment and our disciplined capital allocation approach, we will propose to the AGM a statutory minimum dividend of €0.04 per share for fiscal year 2025.

Speaker #1: This ensures that we maintain the financial flexibility required to execute our strategic priorities, fund targeted investments, and reinforce our balance sheet in a still highly volatile environment.

Speaker #1: With this, ladies and gentlemen, let me hand back to Daniel for his closing remarks.

Speaker #2: Thank you, Yves. Ladies and gentlemen, let me conclude with three key messages before we move on to the Q&A session. First, as we close 2025, we do so from a position of operational and financial strength.

Daniel Grieder: Thank you, Yves. Ladies and gentlemen, let me conclude with three key messages before we move on to the Q&A session. First, as we close 2025, we do so from a position of operational and financial strength. Despite a challenging market environment, we delivered on our commitments, protected brand equity, and generated robust profitability and strong cash flow, which provides us with strong foundation for the next phase of our journey. Second, 2026 marks the deliberate year of brand and general realignment under CLAIM 5 Touchdown. By sharpening distribution, streamlining assortments, and elevating brand positioning, we enhance the quality and structural earnings power of our revenues and lay the groundwork for renewed growth from 2027 onwards. Third, our long-term ambition remains unchanged. Sustainable profitability growth and strong cash flow generation to drive attractive shareholder returns.

Speaker #2: Despite a challenging market environment, we delivered on our commitments, protected brand equity, and generated robust profitability and strong cash flow, which provides us with a strong foundation for the next phase of our journey.

Speaker #2: Second, 2026 marks the deliberate year of brand and general realignment under Claim Five Touchdown. By sharpening distribution, streamlining assortments, and elevating brand positioning, we enhance the quality and structural earnings power of our revenues and lay the groundwork for a renewed gross from 2027 onwards.

Speaker #2: Third, our long-term ambition remains unchanged: sustainable profitability growth and strong cash flow generation to drive attractive shareholder returns. The announced share buyback of up to €200 million reflects the commitment and our confidence in the long-term value creation potential of Hugo Boss.

Daniel Grieder: The announced share buyback of up to EUR 200 million reflects the commitment and our confidence in the long-term value creation potential of Hugo Boss. Thanks to our targeted approach in 2025, we enter the next phase of Hugo Boss with a clean inventory base and strong financial flexibility to execute Touchdown with focus, discipline, and determination. With our two iconic brands, a clear strategic roadmap, and highly committed teams worldwide, we are confident in delivering higher quality revenues, structurally stronger earnings, and significant long-term value for Hugo Boss. With this, we are now very happy to take your questions.

Speaker #2: Thanks to our targeted approach in 2025, we enter the next phase of Hugo Boss with a clean inventory base and strong financial flexibility, to execute touchdown.

Speaker #2: With focus, discipline, and determination—and with our two iconic brands, a clear strategic roadmap, and highly committed teams worldwide—we are confident in delivering higher-quality revenues, structurally stronger earnings, and significant long-term value for Hugo Boss.

Speaker #2: And with this, we are now very happy to take your questions.

Speaker #1: We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. In the interest of time, please limit yourselves to two questions. Anyone who has a question may press star and one at this time. Our first question comes from Manjari Dhar from RBC. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question.

Speaker #1: In the interest of time, please limit yourselves to two and one at this time. Our first question comes from Dar Manjari from RBC. Please go ahead.

Speaker #3: Good morning, team. It's Manjari Dar, RBC. Two questions from me, please. The first question: I was just wondering if you could give a little bit more color on the phasing of the actions that you're taking to deliberately reduce sales this year and improve the product and quality measures.

Manjari Dhar: Good morning, team. It's Manjari Dhar, RBC. Two questions from me, please. The first question, I was just wondering if you could give a little bit more color on the phasing of the actions that you're taking to deliberately reduce sales this year and improve the product and quality measures. I just thought, how should we think about when through the year they could hit, and how's that gonna impact the quarterly performances? My second question, Yves, I know you talked about gross margin increase, but I just wondered if you could give a little bit more color on the ambition of where that could get to this year.

Speaker #3: I just sort of—how should we think about when, through the year, they could hit, and how's that going to impact the quarterly performances?

Speaker #3: And then my second question, Yves, I know you talked about gross margin increase, but I just wondered if you could give a little bit more color on the ambition of where that could get to this year.

Speaker #3: I know that in the past, you guys have talked to sort of 62%, and potentially moving beyond that. But should we expect it to move beyond that this year?

Manjari Dhar: I know that in the past, you guys have talked to sort of 62% and potentially moving beyond that, but should we expect it to move beyond that this year? Thank you.

Speaker #3: Thank you.

Yves Müller: Please, Manjari, perhaps your first question, because the line was not so good. I was more referring to product initiatives regarding phasing over the time, or was this the question?

Speaker #4: Pete Manjari, perhaps your first question, because the line was not so good. I was more referring to product initiatives regarding phasing over the time, or was this the question?

Manjari Dhar: Yes, sorry. It was how we should think about the quarterly phasing of your initiatives this year.

Speaker #3: Yes, sorry. It was how we should think about the quarterly phasing of your initiatives this year.

Yves Müller: No, sorry. We still were discussing about the background of your question. Regarding the phases, the phasing of the measurements. What we expect for the year is that for Q1 and Q4 for 2026, we expect actually that the overall decline will be more pronounced. Definitely I think what has become visible now that we are in execution mode in terms of our CLAIM 5 strategy, that we actually take deliberate steps in many aspects in terms of our product assortment, in terms of the distribution, all these steps are now taking. We are really pursuing high quality revenues. I think this has become also transparent with the clean start of our inventory that we are taking.

Speaker #5: Sorry, we were still discussing the background of your question. So regarding the phases, the phasing of the measurements—what we expect for the year is that for Q1 and Q4 of 2026, we actually expect that the overall decline will be more pronounced. But definitely, I think what has become visible now is that we are in execution mode in terms of our CLAIM 5 strategy, that we are actually taking deliberate steps in many aspects—in terms of our product assortment, in terms of the distribution. All these steps are now taken.

Speaker #5: So, we are really pursuing high-quality revenues. I think this has also become transparent with the clean start of our inventory that we are taking.

Speaker #5: And if you look now at the pacing, of course, definitely in Q1 and Q4, we have—if you compare this to 2025—we have a higher comparison base.

Yves Müller: If you look now at the pacing, of course, definitely in Q1 and Q4, we have a higher comparison base if you compare this to 2025. We have also a currency effect that will become transparent in Q1. On top of this, I highlighted also somehow this kind of technical effect of pre-deliveries that have been shifted to Q4 2025 of around EUR 20 million. Regarding your second question for the expectation for the gross margin for this year, I think there are several effects that will drive the gross margin. First of all, if I look back at the gross margin in 2025 with this slight decline of 20 basis points, I think we have now a very sound starting base when we talk about the inventories.

Speaker #5: We have also a currency effect that will become transparent in Q1. And on top of this, I highlighted also somehow this kind of technical effect of pre-deliveries that have been shifted to Q4 2025 of around €20 million.

Speaker #5: Then, regarding your second question on the expectation for the gross margin for this year, I think there are several effects that will drive the gross margins.

Speaker #5: So, first of all, if I look back at the gross margin in 2025, with this slight decline of 20 basis points, I think we have now a very sound starting base when we talk about the inventories.

Speaker #5: And there are several measures that will drive and that will lead to a kind of improvement in gross margin. So, first of all, the sourcing efficiencies and freight cost reductions—those two initiatives—we have seen them over the course of the year in 2025, and they will also prevail in the year 2026 by vendor consolidation, by more volumes behind one sourcing order.

Yves Müller: There are several measures that will lead to a kind of improvement in gross margin. First of all, the sourcing efficiencies and freight cost reductions. Those two initiatives, we have seen them over the course of the year in 2025, and they will also prevail in the year 2026 by vendor consolidation, by more volumes behind one sourcing order. This streamlining, the collection complexity reduction, the product assortment realignment, this will all help us from a sourcing perspective to get the necessary sourcing efficiencies, point one. Further, as we always said, we are now at a high single-digit air freight. We want to get it further down. Air freight should be kind of exception going forward, and this is also a positive driver of the gross margin.

Speaker #5: So this streamlining, the collection complexity reduction, the product assortment realignment—this will all help us from a sourcing perspective to get the necessary sourcing efficiencies, point one.

Speaker #5: Further, as we always said, we are now at a high single-digit air freight. We want to get it further down. Air freight should be kind of an exception going forward.

Speaker #5: And this is also a positive driver of the gross margin. Secondly, so this was more related to the COX sourcing efficiency and freights. The second big effect is, be aware that we took a price increase also in Q4.

Yves Müller: Secondly, this was more related to the COGS, sourcing efficiency and freights. The second big effect is, be aware that we took a price increase also in Q4. As we had low to mid-single digit price increases, they will prevail also in the year 2026 going forward. On top of this, we will also take selective price increases going forward, just in alignment with the kind of elevation that we are doing in terms of our brand positioning. Thirdly, I think we should keep this also in mind, we are guiding a mid to high single digit decline from a top-line perspective because we take the deliberate move to have higher full price sell-through that we want to achieve with less discounts.

Speaker #5: So, as we had two single-digit price increases, they will prevail also in the year 2026 going forward. And on top of this, we will also take selective price increases going forward.

Speaker #5: Just in alignment with the kind of elevation that we are doing in terms of our brand positioning. And thirdly, and I think we should—we are at the end—we are guiding a mid to high single-digit decline from a top-line perspective, because we take the deliberate move to have higher full-price sales. Through that, we want to achieve this with less discounts.

Speaker #5: So this means we are looking for high-quality revenues, and this will also drive gross margin going forward. So these are the three major effects that we see, besides all the other technical effects that come into play—if it's forex, or all the other things.

Yves Müller: This means we are looking for high-quality revenues, and this will also drive gross margin going forward. These are the three major effects that we see besides all the other technical effects that come into play, if it's Forex or all the other things, or tariffs. I think these are the three major things that we focus on.

Speaker #5: Or tariffs, I think these are the three major things that we focus on.

Speaker #3: Thank you.

Manjari Dhar: Thank you.

Operator: The next question comes from Jürgen Kolb from Kepler Cheuvreux. Please go ahead.

Speaker #6: The next question comes from Jürgen Kolbe from Kepler Cheuvreux. Please go ahead.

Speaker #7: Yes, thank you very much. Gentlemen, just a few questions from me. How far have you already—or, either way around, any update on the Hugo restructuring?

Jürgen Kolb: Yes, thank you very much, gentlemen. Just a few questions from me. How far have you already, or other way around, any update on the HUGO restructuring, i.e., the collection streamlining, HUGO Red and HUGO Blue? Is that something that you think you can already achieve in the first half, or is that something that may take you longer throughout the year? Just one housekeeping question. The air freight share, is that expected to come down to basically zero, or just in necessary times? Or is that still gonna be inflated so that we still have a little bit of remaining effects in 2027? Thank you.

Speaker #7: I.e., the collection streamlining—red and blue. Is that something that you think you can already achieve in the first half, or is that something that may take you longer throughout the year?

Speaker #7: And just one housekeeping question. The air freight share, is that expected to come down to basically zero or just unnecessary times? Or is that still going to be inflated so that we still have a little bit of remaining effects in 2027?

Speaker #7: Thank you.

Daniel Grieder: Hi, Jürgen. Thanks for your questions. Let me first talk about HUGO. We already have taken action in the second half of this year. As you have seen, we have taken two deliberate steps. First, we built two powerhouses. One is a men's powerhouse, and second is a women's powerhouse, where we put both brands, BOSS and HUGO, into the men's powerhouse and BOSS and HUGO into the women's powerhouse. That clearly will drive a new area on womenswear for the total company for both brands. That is a major step.

Speaker #4: Hi, Jürgen. Thanks for your questions. Let me first talk about the Hugo. So, we already have taken action in the second half of this year and, as you have seen, we have taken two deliberate steps.

Speaker #4: First, we built two powerhouses: one is the men's powerhouse and the second is the women's powerhouse, where we put both brands, BOSS and HUGO, into the men's powerhouse and BOSS and HUGO into the women's powerhouse.

Speaker #4: That clearly will drive a new area in women's wear for the total company for both brands. And that is a major step, and a major step that we also did is we hired Kerstin Dorst, who is really an individual who has a lot of experience in women's wear.

Daniel Grieder: A major step that we also did is we hired Kerstin Dorst, who is a real an individual who has a lot of experience in womenswear and is now just started two months ago. We believe that these two powerhouse are set for success in the future. Now, coming back to HUGO, as we always said, we had in the past, you know, experienced HUGO to put more into the Gen Z area and the younger. We also adjusted the collection to the younger audience, and we were now adjusting also to put more contemporary collection into the assortment, where we also show more suits opportunity for men and women.

Speaker #4: And is now just started two months ago. So we believe that it is two powerhouses that are set for success in the future. Now, coming back to Hugo, as we always said, we had in the past experienced Hugo to put more into the Gen Z area and the younger, and we also adjusted the collection to the younger audience.

Speaker #4: And we were now adjusting also to put more contemporary collection into the assortment, where we also show more suits—suits opportunity for men and women.

Speaker #4: And since we already adjusted the collection to this, we see a clear tension and better results at the point of sales. So this is really something that we have looked into, and we actually go back to the heritage of Hugo, where, as you remember, the first suit that somebody was wearing when they came out of university was a Hugo suit, and then after, moved into Boss.

Daniel Grieder: Since we already adjusted the collection to this, we see a clear intention and better results on the point of sales. This is really something that we have looked into it, and we actually go back to the heritage of HUGO where, as you remember, the first suit that somebody was wearing when they came out of the university was a HUGO suit, and then after moved into BOSS. That's what we took back. This contemporary suiting in HUGO, that's what we underline. So far already started, and the successful sales through that we have with it is really promising. That is already in motion, and that's what we expect to further extend and scale in the coming months.

Speaker #4: And that's what we took back. And this contemporary suiting in Hugo, that's what we underline. And so far, already started, and the success sales through that we have with it is really promising.

Speaker #4: So, that is already in motion, and that's what we expect to further extend and scale in the coming months. Within the collection in Blue and Red, we will further optimize the size, and we will further optimize the efficiency of the collections.

Daniel Grieder: That within the collection in Blue and Red, we further optimize the size and we further optimize the efficiency of the collections. Also from a collection point of view, but also from a distribution point of view. Again, because we build those two powerhouses, we adjust there slightly the collection and optimize the assortment for Red and Blue.

Speaker #4: Also from a collection point of view, but also from a distribution point of view—again, because we built those two powerhouses—we adjusted there slightly, the collection, and optimized the assortment for Red and Blue.

Speaker #4: Yes, and the second question—good morning, Jürgen—on the air freight. As I was indicating, we reduced the air freight share '25 over '24 from a kind of mid-single-digit, mid-teens number to high single digits.

Yves Müller: Yes, the second question. Good morning, Jürgen, to the air freight. As I was indicating, we reduced the air freight share 2025 over 2024 from a kind of mid-single digit, mid-teens number to high single digits. That was the effect that we have seen actually in 2025. Strategically wise, the logic should be mid- to long-term to have an air freight share of 0, and just manage the exceptions and have an air freight as an exception, as it is. On the other side, I have to say since we are now going further down, we have already achieved this high single digit numbers. These kind of effects get less pronounced for our P&L, still we are seeking for more improvements.

Speaker #4: So that was the effect that we have seen actually in 2025. And strategic-wise, the logic should be mid to long term to have an air freight share of zero.

Speaker #4: And just manage the expectation, just manage the exceptions and have air freight as, yeah, as an exception as it is. But on the other side, I have to say, since we are now going further down, we have already achieved these high single-digit numbers.

Speaker #4: These kinds of effects get less pronounced for our P&L. But still, we are seeking more improvements, but they will be less pronounced than in the years before '25 and '24.

Yves Müller: They will be less pronounced than in the years before, 2025 and 2024.

Speaker #7: Got it. Got it. Thank you very much, guys. All the best of luck.

Jürgen Kolb: Got it. Thank you very much, guys. All best of luck.

Speaker #4: Thank you.

Daniel Grieder: Thank you.

Yves Müller: Thank you.

Speaker #8: Thank you.

Speaker #6: The next question comes from Thomas Chauvet from Citi. Please go ahead.

Operator: The next question comes from Thomas Chauvet from Citi. Please go ahead.

Thomas Chauvet: Good morning, everyone. Thanks for taking my question. The first one on retail and current trading. You've delivered +2 brick-and-mortar retail in Q4 positive LFLs, so quite a good achievement. Sounds like you had a good holiday season. What was the retail growth in December? How do the first 8 to 9 weeks of the year compare to that +2%? Any you know guidance on your revenue guidance by channel this year would be useful between the 3 sub channels. My second question on inventories and promotions. I mean, you've successfully cleared inventory in outlets and sounds like in the wholesale channel in full.

Speaker #9: Good morning, everyone. Thanks for taking my question. The first one on retail and current trade—you've delivered a plus two brick-and-mortar retail into four positive LFL, so quite a good achievement.

Speaker #9: Sounds like you had a good holiday season. What was the retail growth in December, and how do the first eight, nine weeks of the year compare to that plus 2%?

Speaker #9: And any guidance on your revenue guidance by channel this year would be useful between the three sub-channels. My second question on inventories and promotions—I mean, you've successfully cleared inventory in outlets.

Speaker #9: And it sounds like, in the wholesale channel into Q4, irrespective of these actions, you have said in prior calls that the promotional environment was quite intense.

Thomas Chauvet: Irrespective of these actions, you had said in prior calls that the promotional environment was quite intense. Are you generally seeing in the premium apparel market, the consumer trading down in the US and Europe, favoring outlets over full price? Can you comment on the mid-single digit pricing you implemented on spring 2026? How has the consumer responded to that? Are you planning similar kind of increase on autumn winter collection? Thank you.

Speaker #9: Are you generally seeing, in the premium apparel market, the consumer trading down in the US and Europe? Are they favoring outlets over full price? And can you comment on the mid-single-digit pricing you implemented on Spring '26?

Speaker #9: How has the consumer responded to that? Are you planning a similar kind of increase on the autumn-winter collection? Thank you.

Yves Müller: Yes. Thank you, Thomas. I will try to take the question. First of all, we are actually very happy regarding the sequential improvements that we have seen in retail brick-and-mortar. If you take the four quarters in 2025, it was -4, -1, 0, and +2. You have seen actually a kind of coming from negative turning into positive side. We really have to say that we try to be, have a very, let's say, successful holiday season. We had the campaign Be the Next.

Speaker #4: Yes, thank you, Thomas. I will try to take the questions. So, first of all, we are actually very happy regarding the sequential improvements that we have seen in retail brick-and-mortar.

Speaker #4: So if you take the four quarters in 2025, it was minus 4, minus 1, 0, and plus 2. So you have seen actually a kind of coming from negative turning into positive side.

Speaker #4: And we really have to say that the that we try to have a very, let's say, successful holiday season. We had the campaign Be the Next Be the Next Boss.

Yves Müller: We had the collaboration also with Steiff, and we try to actually specially celebrate also these kind of commercial moments, because if you compare the Q4 to the previous three quarters, it's actually between 25% and 30% higher in terms of net sales. There you can see with Black Friday, Singles' Day, holiday seasons, you have big commercial moments. We really wanted to have the right collections and products in place for the seasons, and we could really see this kind of sequential improvement going forward. We are happy with this development overall in Q4 that we have seen. Now, talking about the channel logic for 2026, we still have overall regarding retail a kind of overall prudent approach as we go into the year.

Speaker #4: We had the collaboration also with Styve, and we tried to actually specially celebrate also these kinds of commercial moments, because if you compare the Q4 to the previous three quarters, it's actually between 25% and 30% higher in terms of net sales.

Speaker #4: So, there you can see, with Black Friday, Singles' Day, holiday seasons, you have big commercial moments. And we really wanted to have the right collections and products in place for the season.

Speaker #4: And we could really see this kind of sequential improvement going forward. So we are happy with this development overall in Q4 that we have seen.

Speaker #4: Now, talking about the channel logic for 2026, we still have, overall regarding retail, a kind of overall prudent approach as we go into the year.

Speaker #4: But in terms of the development, in terms of the channels, the overall guidance that we have given will be less pronounced, definitely from a retail perspective.

Yves Müller: In terms of the development in terms of the channels, the overall guidance that we have given will be less pronounced definitely from a retail perspective. We also have to keep in mind that we have reduced the space now. You might have seen the numbers. The space is now down year-over-year at the end of the year by -2%. We of course have a kind of space effect here also going to the next years. Regarding the inventories, you were talking about promotional activities. Like I already said, there was a kind of, let's say, similar performance between full price business and outlets. Of course, we use this kind of commercial season also to clear our inventories.

Speaker #4: But we also have to keep in mind that we have reduced the space now. You might have seen the numbers. The space is now down year over year at the end of the year by minus 2%.

Speaker #4: So, we are, of course, having a kind of space effect here also going into the next years. And regarding the inventories, you were talking about promotional activities.

Speaker #4: So, like I already said, there was a kind of, let's say, similar performance between full-price business and outlets. Of course, we used this kind of commercial season also to clear our inventories.

Speaker #4: At the end, we have to say, if you just compare our balance sheet year over year in terms of euro numbers, we more than decreased our inventories by €150 million.

Yves Müller: At the end, we have to say, if you just compare our balance sheet year over year in terms of euro numbers, we more than decreased our inventories by EUR 150 million. We always said we want to achieve an inventory to net sales of 20% to net sales. We have now made a big step of almost 350 basis points year over year. We are standing now at 21.5%, and that was deliberately. It was a deliberate, intentional move somehow to reduce our inventory position to get clean into the year 2026, because 2026 marks our execution of CLAIM 5 touchdown, where we are seeking high quality revenues.

Speaker #4: We have always said we want to achieve an inventory-to-net sales ratio of 20%. We have now made a big step of almost 350 basis points year over year.

Speaker #4: We are standing now at 21.5%. And that was deliberately—was a deliberate, intentional move, somehow, to reduce our inventory position to get clean into the year 2026, because 2026 marks our execution of claim five touchdown, where we are seeking high-quality revenue.

Speaker #4: So that was a deliberate decision. And we did this for retail. We did this in full price, in outlets, and also for wholesale partners.

Yves Müller: That was a deliberate decision, and we did this for retail, we did this in full price, in outlets, and also for wholesale partners.

Speaker #4: Daniel, do you want to add something?

Daniel Grieder: Yeah. Maybe I can add a few things on the retail side. What we definitely focused and emphasized in the second half of 2025 was also that we actually expand and actually improve customer experience in all our stores. We deliberately, because traffic went down, made all effort to actually put the customers in the center of everything we do in the stores and optimize the journey in the store through the assortment in the store. That really helped. As Yves already said, with the holiday program, the window. We optimized on every touch point that we have with the customer to improve also the experience and get better sales per customer.

Speaker #8: Yeah, maybe I can add a few things on the retail side. So what we definitely focused and emphasized in the second half of 2025 was also that we actually enlarged and actually improved customer experience in all our stores.

Speaker #8: So we deliberately, because traffic went down, made all effort to actually put the customers in the center of everything we do in the stores, and optimized from the journey in the stores through the assortment in the store, and that really helped it.

Speaker #8: And as Yves already said, with the holiday program, the windows—so we optimized on every touchpoint that we have with the customer to improve also the experience and get better sales per customer.

Speaker #8: On top of that, I don't want to also underline that we have our XP program in place, which is really helping us to activate our members more than in the past.

Daniel Grieder: On top of that, and also underline that we have our XP program in place, which is really helping us to activate our members more than in the past. As we have seen, that member base has grown by 20%. Very importantly, they also spend 57% more than non-members. We did a big activation to optimize all the retail stores, and the result in the retail stores with less traffic. The conversion rate has increased because all these activities that have taken place. Then I also want to add something about the inventory.

Speaker #8: And as we have seen, that member base has grown by 20%. And very importantly, they also spend 57% more than non-members. So we did a big activation to optimize all the retail stores.

Speaker #8: And the result in the retail stores with less traffic, so the conversion rate has increased because of all these activities we have taken place. And then I also want to add something about the inventory.

Speaker #8: Yes, we have cleaned the inventory. And we are sure that in the future, we can optimize inventory, because I want to also mention that we have much better planning, because we use much more data, and therefore we have a much better overview of our orders that we place. Optimized with our customers, the flow of delivery of the merchandise.

Daniel Grieder: Yes, we have cleaned the inventory, and we are sure that in the future we can optimize inventory because want to also mention that we have a much better planning because we use much more data, and therefore we have a much better overview of our orders that we place, optimize with our customers, the flow of delivery of the merchandise. Also there, it's not just a one-off inventory optimization. It's a long-term step that we have taken with all the AI and you know, digital campus we have in place to get also the data in place. Just to underline that as well.

Speaker #8: So, also there, it's not just the one-off inventory optimization. It's a long-term step that we have taken with all the AI and digital campus we have in place to get also the data in place.

Speaker #8: So just to underline that as well.

Thomas Chauvet: Thank you, Daniel. Just coming back to my first question on current trading. How does the first nine weeks of the year compare to the +2% you were reporting in Q4, please?

Speaker #1: Thank you, Daniel. Just coming back to my first question on current trading, how does the first nine weeks of the year compare to the plus 2% you've reported in Q4, please?

Thomas Chauvet: Thank you, Daniel. Just coming back to my first question on current trading. How does the first nine weeks of the year compare to the +2% you were reporting in Q4, please?

Yves Müller: Thomas, I just try to understand your question because the line was not so good. The start into the year was actually in line with our expectation.

Speaker #8: Thomas, I just tried to understand your question because the line was not so good. The start into the year was actually in line with our expectation.

Yves Müller: Thomas, I just try to understand your question because the line was not so good. The start into the year was actually in line with our expectation.

Speaker #8: So, this is how we concluded. I think, on the other side, you also have to keep in mind that we have given the guidance already last year, on the 3rd of December, for the year 2026.

Daniel Grieder: This is how we concluded. I think on the other side, you also have to keep in mind is that we have given the guidance already last year on 3 December for the year 2026. Since then there have been two things. One was that I think we had a strong Q4 at the end, which gives us a higher base going into the year 2026. Secondly, of course, we have the Middle East conflict. Notwithstanding those two effects, because we had of course, on the other side, the positive momentum in retail. On the other side, we confirmed this kind of guidance as of today. I think this is enough comment regarding our current trading.

Yves Müller: This is how we concluded. I think on the other side, you also have to keep in mind is that we have given the guidance already last year on 3 December for the year 2026. Since then there have been two things. One was that I think we had a strong Q4 at the end, which gives us a higher base going into the year 2026. Secondly, of course, we have the Middle East conflict. Notwithstanding those two effects, because we had of course, on the other side, the positive momentum in retail. On the other side, we confirmed this kind of guidance as of today. I think this is enough comment regarding our current trading.

Speaker #8: Since then, there have been two things. One was that I think we had a strong Q4 at the end, which gives us a higher base going into the year 2026.

Speaker #8: And secondly, of course, we have the Middle East conflict. Notwithstanding of those two effects, because we had, of course, on the other side, the positive momentum in retail on the other side, we confirmed this kind of guidance as of today.

Speaker #8: I think this is enough comment regarding our current trading.

Speaker #1: Okay. And just on pricing for autumn/winter, mid-single digit is what you intend to pass on as well?

Thomas Chauvet: Okay. Just on pricing for autumn/winter, mid-single digit is what you intend to pass on as well?

Daniel Grieder: Say it again, Thomas. Sorry, we didn't get your question. Please repeat it.

Speaker #8: Say it again, Thomas. Sorry, we didn't get your question. Please repeat it.

Thomas Chauvet: Yeah. Apologies for the line if it's bad. Price increase with mid-single digit on spring/summer. What about autumn/winter? Is it the same kind of magnitude that you are anticipating?

Speaker #1: Yeah, apologies for the line if it's bad. Price increases were mid-single digits on spring/summer. What about autumn/winter? Is it the same kind of magnitude that you are anticipating?

Daniel Grieder: Yes, Thomas, you are right. We have the price increase of the spring campaign is low to mid-single digit increase, and this increase will prevail going into 2026. This has been a kind of step up of the prices since the start of the spring 2026 campaign, and this will prevail for the year 2026, like I explained, for the gross margin.

Speaker #8: Yes, Thomas, you are right. So we have the price increase for the spring. The campaign is a low to mid-single-digit increase. And this increase will prevail going into 2026.

Speaker #8: So this has been the kind of step-up of the prices since the start of the Spring '26 campaign. And this will prevail for the year 2026.

Speaker #8: Like I explained, also for the gross margin.

Thomas Chauvet: Super. Thank you.

Speaker #1: So thank you.

Speaker #8: Yeah, my pleasure.

Daniel Grieder: Yep. My pleasure.

Operator: The next question comes from Daria Nasledysheva from Bank of America. Please go ahead.

Speaker #6: The next question comes from Darian Ashley Dieva from Bank of America. Please go ahead.

Speaker #9: Hi everyone, this is Daria from Bank of America. Thank you for taking my questions. I will ask two questions aloud. So, as you already mentioned, the 2026 outlook is unchanged versus December, considering a stronger-than-expected Q4.

Daria Nasledysheva: Hi, everyone. This is Daria from Bank of America. Thank you for taking my questions. I will ask two as allowed. As you already mentioned, 2026 outlook is unchanged versus December, considering a stronger than expected Q4. Have any recent events, particularly in the Middle East and ensuing implications, changed your thinking around any line items at all constituting the outlook? Just want to understand if, how much of latest volatility is also now part of the outlook, or it's more of a wait-and-see mode. My second question is, in terms of underlying consumer behavior, are you seeing any sort of hyper seasonality of consumption around promotional events? You were mentioning Black Friday, Singles' Day, et cetera.

Speaker #9: Have any recent events, particularly in the Middle East and the ensuing implications, changed your thinking around any line items at all constituting the outlook? Just want to understand how much of the latest volatility is also now part of the outlook, or if it's more of a wait-and-see mode?

Speaker #9: And my second question is, in terms of underlying consumer behavior, are you seeing any sort of hyper-seasonality of consumption around promotional events? You were mentioning Black Friday, Singles' Day, etc.

Speaker #9: So, basically just trying to understand, given your focus on full-price sell-through into next year, how much should we be expecting rebates to impact gross margin?

Daria Nasledysheva: Basically just trying to understand, given your focus on full price sell-through into next year, how much should we be expecting rebates to impact gross margin, and just to understand the seasonality of sales. Thank you.

Speaker #9: And just to understand the seasonality of sales. Thank you.

Speaker #8: Thank you for your question. I’ll start, and then Yves can add where we want. Talking about the guidance that we gave at the beginning of December, we said it’s mid- to high-single-digit.

Daniel Grieder: Thank you for your question. I start and then Yves can add, wherever you want. Talking about the guidance that we gave, beginning of December, we said it's mid- to high-single-digit. We continue to confirm that high-single-digit, including the situation now in the Middle East. However, it is too early to have to say what the impact of the Middle East will be. Clearly, we look closely every day on the situation because there's every day also a different situation. We have, you know, it. Most of the time it has an impact, or at the moment it has an impact on the store opening, where we have to adjust.

Speaker #8: We continue to confirm that high single-digit, including the situation now in the Middle East. However, it is too early to have to say what the impact of the Middle East will be.

Speaker #8: Clearly, we look close and every day on the situation because there's, every day, also a different situation. Most of the time, it has an impact, or at the moment, it has an impact on the store opening.

Speaker #8: Where we have to adjust, if the shopping center is closed, then we have also to close the stores. But in terms of delivery, we are not yet, until now, affected on this.

Daniel Grieder: If the shopping center is closed, then we have also to close the stores. In terms of delivery, we are not yet until now affected on this. It has a direct impact on store opening and store performance because there is not many tourists or less tourists shopping. That's clear. That has an effect on the whole, and on the shopping centers and so far then for all the brands. Underlying again for delivery, so far we are not impacted on that. Therefore, we again confirm the high to mid to high single digit. Yves, anything?

Speaker #8: So it has a direct impact on store opening and store performance because there are not many tourists, or less tourists shopping. That's clear. That has an effect overall on the shopping centers and so far, then, for all the brands.

Speaker #8: But an underlying, again, for delivery so far, we are not impacted on that. Therefore, we again confirm the high to mid to high single digit.

Speaker #8: And Yves, anything? No, I'm fine. Yeah. Okay. And then the second question was about the consumer behavior. So actually, we had very good Christmas business, as we said, because we've made a lot of initiative.

Daria Nasledysheva: No, I'm fine.

Yves Müller: No, I'm fine.

Daniel Grieder: No. Okay. The second question was about the consumer behavior. Actually, we had very good Christmas initiative. We also had a strong Black Friday, but we were less promotional on Black Friday. To mention that the Chinese New Year actually also turned out into a positive number for our side. However, the Chinese New Year had an impact in December, but has a positive impact in January. So far, all these events that we had were for us a positive number. Consumer sentiment, it's a bit early to say, but at least at the beginning of.

Speaker #8: We also had a strong Black Friday, but we were less promotional on Black Friday. And then, also to mention, the Chinese New Year actually also turned out into a positive number for our side.

Speaker #8: And, however, the Chinese New Year had an impact in December but has a positive impact in January. So far, all these events that we had were, for us, a positive number.

Speaker #8: So, consumer sentiment—it's a bit early to say, but it, at least at the beginning of, at the end of the year in December, has gotten better.

Daniel Grieder: At the end of the year in December has gotten better. Now with this situation, it's a bit unclear, and it's a bit unclear every day. We are adjusting our moves, our business, our actions from day to day and maneuver, as we always say, fly by sight to see how this situation is developing. One thing is clear. It has an impact on consumer behavior and consumer sentiment because everybody is also wait and see.

Speaker #8: Now, with this situation, it's a bit unclear, and it's a bit unclear every day. So we are adjusting our moves, our business, our actions from day to day and maneuver, as we always say: fly on sight.

Speaker #8: To see what is—how this situation is developing. But one thing is clear: it has an impact on consumer behavior and consumer sentiment, because everybody is also waiting and seeing.

Speaker #9: Thank you so much. And can I quickly follow up around the Middle Eastern implications? Because is there anything around freight or COGS impact at all, or is this yet to be determined?

Daria Nasledysheva: Thank you so much. Can I quickly follow up around the Middle Eastern implications? 'Cause is there any thinking around freight or COGS impact at all, or this is yet to be determined? Because to be honest, we don't know where it all will end up.

Speaker #9: Because, to be honest, we don't know where it all will end up.

Daniel Grieder: At the moment, as I said before, on the freight, on delivery, it doesn't have yet. That we don't see the impact. I'm sure it might have. Depends how long that this war is going on. For us, at the moment, to make clear statement is too early.

Speaker #8: At the moment, as I said before, on the freight, on delivery, it doesn't have yet—we don't see the impact. So, but I'm sure it might have, as long as it depends how long that this war is consisting.

Speaker #8: Going on. But for us at the moment, to make a clear statement is too early.

Speaker #9: Thank you very much. Helpful.

Daria Nasledysheva: Thank you very much. Helpful.

Speaker #8: Thank you.

Daniel Grieder: Thank you.

Operator: The next question comes from Michael Kuhn from Deutsche Bank. Please go ahead.

Speaker #6: The next question comes from Michael Kuhn from Deutsche Bank. Please go ahead.

Speaker #10: Good morning. Thanks for taking my questions. Also, two from my side. Firstly, starting with Women's Wear, you built the new powerhouse structure over the past few months.

Michael Kuhn: Good morning. Thanks for taking my questions. Also two from my side. Firstly, starting with womenswear. You built the new powerhouse structure over the past few months. Now, Kerstin Dorst has started at the beginning of the year. Let's say when we will see her handwriting and when should we expect womenswear to ideally outperform menswear and BOSS, let's say, not punching below its weight in womenswear any more? Secondly, briefly on capital allocation, switching from dividends to buybacks, is that something that you would foresee for the, let's say, transition period restart 2026, 2027, and maybe switch back to dividends again? Or is that too early to say? Thank you.

Speaker #10: Now, Kerstin Doll has started at the beginning of the year. Let's say, when will we see her handwriting, and when should we expect women's wear to ideally outperform menswear—and Boss, let's say, not punching below its weight in women's wear anymore?

Speaker #10: And secondly, briefly on capital allocation, switching from dividends to buybacks— is that something that you would foresee for the, let's say, transition period, restart '26, '27?

Speaker #10: And maybe switch back to dividends again? Or is that too early to say? Thank you.

Daniel Grieder: Thank you, Mike. We start with the womenswear, and Kerstin, who has just started 2 months ago. First of all, the powerhouse gives us clearly the focus on womenswear that we try to implement into a BOSS and the company for years. I just wanna underline that over the past few years, we tripled the sales in womenswear, so not, you know, it's still a step that we have done in the right direction. However, we now wanna sharpen our handwriting, and therefore, we took her because she is a very experienced individual that really can help us, you know, building the future for womenswear in the company. That has a big potential.

Speaker #8: Thank you, Mike. I start with the women's wear. And Kerstin, who has just started two months ago. So, first of all, the powerhouse gives us clearly the focus on women's wear that we try to implement into BOSS and the companies in years.

Speaker #8: I just want to underline that over the past few years, we tripled the sales in women's wear. So now it's still a step that we have done in the right direction.

Speaker #8: However, we now want to sharpen our handwriting, and therefore we took her because she is a very experienced individual that really can help us build the future for womenswear in the company.

Speaker #8: That has a big potential. Now, she already made some analytics and analysis about the collection—about what she sees in the future, and what she needs to change, and how it will be changed.

Daniel Grieder: Now, she already made some analytics and analysis about the collection, that what she sees in the future and what she needs to change and how it will be changed. The handwriting now that you see in the stores, of course, is not yet from her, but that will come in the next two collection. You see partly takeover from her handwriting. What we also intend to do is a quick response that we will, you know, can implement as just a few items in the end of the year, of this year, that will help us to already show the direction we are going.

Speaker #8: And the handwriting now that you see in the stores, of course, is not yet from her. But that will come in the next, in the next two collections, you see partly take over from her handwriting.

Speaker #8: What we also intend to do is a quick response that we can implement as just a few items at the end of the year, this year, that will help us to already show the direction we are going.

Speaker #8: So, a bit early, but clear signs that we have a clear plan because we specialize this powerhouse for women and for men. And we, with that new direction and new organization in place for BOSS and for HUGO men's and for HUGO women's wear, and BOSS women's wear, we are confident that this will have a positive impact.

Daniel Grieder: A bit early, but clear signs that we have a clear plan because we specialize in this powerhouse for women and for men, and with that new direction and new organization in place for BOSS and for HUGO Menswear and for HUGO Womenswear, and BOSS Womenswear, we are confident that this will have a positive impact, and hopefully we can, you know, move more to the potential of Womenswear that we are seeking for this brand. We are optimistic on that. The second question is on capital allocation. Yes, it's too early, as you said, to say what we are going to do at the moment. We are very confident on the move we have done. It gives us flexibility, especially in this situation.

Speaker #8: And hopefully, we can move more toward the potential of womenswear that we are seeking for this brand. So we are optimistic on that.

Speaker #8: And the second question is on capital allocation. So yes, it's too early, as you said, to say what we are going at the moment. We are very confident in the move we have done.

Speaker #8: It gives us flexibility, especially in this situation. And it gives us the moment also to refocus, refine, and realign on our business in 2026.

Daniel Grieder: It gives us the moment also to refocus and refine and realign on our business in 2026. That's what we have implemented touchdown. We have, with that flexibility, all opportunities to go either way, and that's what we also will do. A bit too early to comment on that, but we'll come back as soon as we have news on that.

Speaker #8: That's what we have implemented, touchdown. So we have, with that flexibility, all opportunities to go either way. And that's what we also will do.

Speaker #8: So, it's a bit too early to comment on that, but we'll come back as soon as we have news on that.

Speaker #10: All right. Thank you.

Michael Kuhn: All right. Thank you.

Operator: The last question for today is from Andreas Riemann from Oddo BHF. Please go ahead.

Speaker #6: The last question for today is from Andreas Riemann from Odoo BHF. Please go ahead.

Speaker #10: Yep. Thanks for taking my questions. First one, specifically on the US business. In H2 '25, many brands implemented price increases in the US. So, how would you describe the development of promotions and volumes in the US market specifically after all those price increases?

Andreas Riemann: Yep. Thanks for taking my questions. First one specifically on the US business. In H2 2025 many brands implemented price increases in the US. How would you describe the development of promotions and volumes in the US market, specifically after all those price increases? That's question number one. Number two, on the brands, in 2026 it sounds like you wanna continue to streamline Womenswear and HUGO. Are there also adjustments to BOSS Menswear this year? Or if not, would you say the BOSS Menswear performance in 2026 is a good proxy for the underlying development of your company? That's the second question. Thanks.

Speaker #10: That's question number one. And number two, on the brands, in '26, it sounds like you want to continue to streamline womenswear and HUGO.

Speaker #10: So, are there also adjustments to BOSS Menswear this year, or if not, would you say the BOSS Menswear performance in '26 is a good proxy for the underlying development of your company?

Speaker #10: That's the second question. Thanks.

Speaker #8: So in the US, we already—first of all, we have shown good results. Robust results, robust results in the US. We feel with all the initiatives we have done last year, we had a very positive result.

Daniel Grieder: In the US, we already start. First of all, we have shown robust result in the US. We feel with all the initiatives we have done last year, we had a very positive result. We also continued our distribution to extend our distribution not only with BOSS but also with Hugo. We got much more space with our sub line in BOSS, but also with Hugo. We felt very comfortable so far with the development in the US. Particularly, I wanna say that, yes, US is very discount-driven, but we deliberately took a step in the other direction and be less discount-driven. Even with a less discount-driven approach, our results is actually showing even more promising results.

Speaker #8: We also continued our distribution to extend our distribution not only with BOSS, but also with Yugo. We got much more space with our supply in BOSS, but also with Yugo.

Speaker #8: So, therefore, we felt very comfortable so far with the development in the US. Particularly, I want to say that, yes, the US is very discount-driven, but we deliberately took a step in the other direction and have been less discount-driven.

Speaker #8: So therefore, even with a less discount-driven approach, our results are actually showing even more promising results. And this is also our way going forward.

Daniel Grieder: This is also our way going forward. You said about women's and men's potential. Yes. We see. First of all, we are very strong with our sub lines. The BOSS Black line continues to show very strong results. We optimized our collections and also product with a much better price value. If you remember, we invested a lot into our products, and therefore, we have not just increased the price with the same level of product. We increased the price because also the quality of the product got better. BOSS Black remains very stable, very good sales throughout, and a very promising collection.

Speaker #8: And then you said about the women's and men's potential. Yes. We see, first of all, we are very strong with our supply. So the BOSS Black line continues to show very strong results.

Speaker #8: We optimized our collections and also product with a much better price–value. If you remember, we invested a lot into our products, and therefore we have not just increased the price with the same level of product.

Speaker #8: We increased the price because also the quality of the product got better. So BOSS Black remains very stable. Very good sales through. And a very promising collection.

Speaker #8: Then we added, as you know, also Boss Camel. And Boss Camel shows a big, how to say, interest of our customers to add an additional line from us, next to our more affordable luxury competitors.

Daniel Grieder: We added, as you know, also BOSS Camel, and BOSS Camel shows a big interest of our customers to add an additional line from us in, next to our more affordable luxury competitors. Also that line is performing very well. BOSS Green is probably the one that we have extraordinary results because it's just a moment of more athleisure wear. We had BOSS Green always as athleisure collection in place. We also underlined there our structure within BOSS Green that we have tennis wear, we have golf wear, and we have athleisure wear in there. This is at moment a great and big market trend.

Speaker #8: So also that line is performing very well. And then BOSS Green is probably the one where we have extraordinary results, because it's just the moment of more athleisure wear, and we had BOSS Green always as a leisure collection in place.

Speaker #8: We also underlined there our structure within BOSS Green, that we have tennis wear, we have golf wear, and we have athleisure wear in there.

Speaker #8: So this is, at the moment, a great and big market trend. And then, last on top on menswear is also Boss spec hem. That shows positive results, as he is an ambassador for us, not only for his Boss and Beckham.

Daniel Grieder: Last, on top of menswear is also BECKHAM x BOSS that shows positive results as he's an ambassador for us, not only for his BECKHAM x BOSS. It's also for BOSS, an ambassador that is so relevant globally. No matter if you go into the US and Asia, he is relevant wherever it is for both genders, young and old. First of menswear, we add also the shoes and the accessories, so we can only show consistent growth. We can show consistent results and positive results, and that's what we continue to do. This is our DNA. That is our yeah focus.

Speaker #8: It's also for boss and ambassador. That is so relevant. Globally, no matter if you go into the US, no matter if you go to the US and Asia, he is relevant wherever it is, for both genders and young and old.

Speaker #8: So there, first, of menswear, we add also the shoes and the accessories. So we can only show consistent growth. We can show consistent results and positive results.

Speaker #8: And that's what we continue to do. This is our DNA; that is our focus. And we have this also underlined with our fashion show in Milan—that we really have the format for menswear, that we add the suiting, the heritage of our brand.

Daniel Grieder: We have this also underlined with our fashion show in Milan, that we really have the format for menswear, that we add the suiting, the heritage of our brand, and this works very successfully. Now, all the success we have in men's, that's what we now try to also develop for womenswear. We have shown with our story, Be Your Own BOSS. It's not just a men's story. It's a story that also resonates for women because in the meantime, all the women want to also be a boss. Be Your Own BOSS is a perfect storytelling subject that really is resonating for men and for women. We are, at this moment, really going to the potential of womenswear.

Speaker #8: And this works very successfully. Now, all this success we have in men's—that is what we now try to also develop for women's wear. And we have shown with our story 'Be Your Own Boss.'

Speaker #8: It's not just the men's story. It's a story that also resonates for women because, in the meantime, all the women want to also be a boss.

Speaker #8: So 'be your own boss' is a perfect storytelling subject that really is resonating for men and for women. So we are at this moment really going to the potential of womenswear.

Speaker #8: Of course, it's still small, but we are very positive with all the actions we have taken in the organization and in the product. We believe that we will achieve this optimization and also reach the potential of women's wear for BOSS and for Yugo.

Daniel Grieder: Of course, it's still small, but we are very positive with all the action we have taken into the organization and into the product that we will, you know, get this optimization and also get to the potential of womenswear for BOSS and for HUGO.

Speaker #10: Excellent. Okay.

Christian Stöhr: Excellent.

Andreas Riemann: Excellent.

Andreas Riemann: Okay.

Speaker #8: Thanks, Andreas. Thank you, Daniel. Ladies and gentlemen, that actually completes today's conference call. If you have any further questions, please feel free to contact the Investigations team.

Christian Stöhr: Thanks, Andreas. Thank you, Daniel. Ladies and gentlemen, that actually completes today's conference call. If you have any further questions, please feel free to contact the investor relations team. Thanks for your participation, and we look forward to reconnecting with many of you over the next days and weeks. Thanks and goodbye.

Speaker #8: Thanks for your participation, and we look forward to reconnecting with many of you over the next days and weeks. Thanks, and goodbye.

Speaker #1: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines.

Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

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