German consumer giants tighten belts as Middle East pressure mounts
Hugo Boss and Beiersdorf both report falling sales but point to margin gains and cost discipline as evidence their turnaround plans are taking hold.
Image: drapersonline.com
Beiersdorf cuts guidance as Nivea recovery stalls
Beiersdorf lowered its 2026 sales outlook after organic revenue fell 3.5% to €5bn in the first half. The Hamburg-based group now expects consumer division sales to decline in low-single digits, having previously forecast flat to slightly growing revenue. Nivea sales dropped 6.8% in the period, weighed down by customer conflicts, a late European sun season, and trade destocking. CEO Vincent Warnery said the brand requires "even more decisive action" after early rebalancing measures delivered results that "remain too isolated in categories and markets" to lift global performance.
Hugo Boss posts €905m quarter despite macro headwinds
Second-quarter sales at Hugo Boss fell 10% to €905m, which the Metzingen-based group attributed to continued macroeconomic headwinds and geopolitical tensions. Operating expenses declined 4%, reflecting what the company called disciplined cost management and ongoing efficiency gains. Gross margin climbed 200 basis points to 64.9%, a figure CEO Daniel Grieder cited as evidence the business is "in control of what matters." The company reaffirmed its full-year outlook for currency-adjusted sales to decline by mid- to high-single digits and EBIT between €300m and €350m.
Frasers Group bid deadline looms as stake hits 37.3%
Hugo Boss shareholders face an August 13 deadline to respond to Frasers Group's €38-per-share offer for the German luxury business. Frasers last week increased its holding to 37.3%. Hugo Boss's managing board and supervisory board jointly recommended rejection, concluding the offer "does not adequately reflect the company's standalone prospects and future value creation potential." The bid arrives as the company executes its Claim 5 Touchdown strategy, which Grieder said is strengthening the business despite near-term sales pressure.
Nivea turnaround enters new phase with €100m media push
Beiersdorf will invest an additional €100m in consumer-facing activities in the second half of 2026 as it launches the next phase of Nivea's turnaround. The 18-month plan focuses on reigniting growth across all categories through broad-based innovation and regional tailoring of offerings. The first phase of the rebalancing strategy, initiated in the second half of 2025, delivered positive effects on some market share and volume figures, though sell-out growth remained positive while sell-in faced headwinds. Beiersdorf expects to stabilise margins and return to net sales growth in 2027.
EMEA drags Hugo Boss as Middle East tensions cut store traffic
Hugo Boss saw EMEA sales fall 12% to €1.1bn in the second quarter, the steepest regional decline. The company cited lower store traffic in the Middle East following geopolitical developments, which added pressure on regional performance. Americas sales declined 5% to €424m, while Asia Pacific fell 6% to €239m. Beiersdorf similarly flagged the Middle East crisis as impacting consumer sentiment, consumption, and costs across its markets.
Hugo Boss retail and wholesale both down double digits
Hugo Boss retail sales fell 9% to €565m in the second quarter, while wholesale revenue dropped 10% to €320m. License sales declined 13% to €21m. The company said the declines reflect both strategic realignment and a challenging external environment. Inventories declined and free cash flow generation remained strong, which Grieder described as signs the strategy is translating into "tangible benefits and creating a structurally stronger Hugo Boss."
Beiersdorf's derma brands defy the downturn
Beiersdorf's derma division grew 7.8% organically in the first half, driven by Eucerin and its Epicelline and Thiamidol ingredient innovations. Aquaphor's expansion into body lotions and creams is expected to further boost the brand's growth potential. Premium skin care brand La Prairie declined 6.9% in the half but returned to growth in the second quarter with sales up 2.2%, helped by US department store and travel retail disruptions easing. A new entry line launches in September to attract consumers and expand distribution.
Margin pressure ahead for Beiersdorf
Beiersdorf expects EBIT margin in its consumer business to fall to 11% in 2026, down from 13.6% in 2025, driven by increased investment in Nivea's turnaround. Group EBIT margin is projected at 11.8%, compared with 14% the previous year. The company said it aims to return to profitable growth with net sales ahead of the market and margin improvement from 2028 onwards. Beiersdorf confirmed flat or slightly growing organic sales guidance for its tesa self-adhesive products division.
Draws on source material published at drapersonline.com.
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