Hugo Boss surpasses profit forecasts despite Iran war affecting markets

German fashion group Hugo Boss announced Tuesday quarterly operating profit higher than analysts’ expectations, causing its stock to rise nearly 5%, even as the war in Iran weighed on its Middle Eastern markets. The company’s Ebit for the first quarter fell to 35 million euros ($41 million), down from 61 million euros in the same period last year. This figure, however, remains above the average analyst forecast of 30 million euros according to a company survey.

“After ending 2025 on a positive note, we started this year with a clear roadmap. However, the market environment became more challenging in the first quarter due to recent developments in the Middle East,” said CEO Daniel Grieder in a statement.

The Deutsche Bank noted that this report marked a “good start to the year” and should reassure investors on Tuesday.

The conflict in the Middle East has shaken global markets, driving up oil prices and reigniting concerns about global inflation and growth, as the vital Strait of Hormuz remains closed.

Hugo Boss stated that the conflict had led to a significant drop in store traffic in the region since March, while global consumer sentiment remained bleak throughout the first quarter, resulting in a negative impact of about 1% on the group’s revenue.

CFO Yves Müller told reporters at a press conference that the company had not yet seen any impact of the war on the supply chain and indicated that transportation costs should remain manageable for 2026.

“We source about 50% from Europe, which means we are actually quite flexible in terms of the supply chain,” said Müller.

“We will definitely feel the effects over time, especially on transportation costs, but… it will depend on the duration of this situation.”

UNCERTAINTY ABOUT CUSTOMS DUTY REFUNDS

Asked about U.S. import duties and the refund process following the Supreme Court’s decision on February 20, which invalidated certain duties, Mr. Müller said it was too early to comment on the issue.

The decision did not address the issue of importers’ refunds, creating uncertainty about the refund process.

“Let’s assume that, for the part of the duties that were illegal, only a portion will be automatically refunded,” said Müller, without disclosing the amount that Hugo Boss planned to claim.

“We are seeking to recover the money we paid unnecessarily.”

(1 $ = 0.8557 euros)