BOSSY (BOSSY) Q2 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, welcome to the Q2 2026 Results Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. [Operator Instructions]. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Christian Stohr, Senior Vice President, Investor Relations. Please go ahead, sir.

Good morning, ladies and gentlemen, and welcome to our second quarter 2026 results presentation. Today's call will be hosted by Daniel Grieder, CEO of HUGO BOSS; and Yves Muller, CFO and COO. Before we begin, please be reminded that all revenue growth rates will be discussed on a currency-adjusted basis, unless stated otherwise. Also as usual, during the Q&A session, we kindly ask analysts to limit their questions to 2. And with that, let me hand over to Daniel.

Thank you, Christian. Good morning, ladies and gentlemen. Thank you for joining us today. The second quarter marked another important step in the execution of our strategy CLAIM 5 TOUCHDOWN. While consumer demand remained weak and market conditions continued to be volatile, we made further progress on our key priorities, strengthening brand equity, enhancing earnings quality and driving long-term value creation. As we outlined at the beginning of the year 2026 -- in the year 2026 is a deliberate year of realignment. We are talking targeted actions to build a stronger and more productive HUGO BOSS even if these measures temporarily weighed on volumes. The progress achieved in the second quarter confirms that these actions are working, especially when it comes to gross margin expansion, inventory optimization and cash generation. While there is still work ahead of us, these improvements strengthen our confidence that our strategy enhances the quality of our business and positions HUGO BOSS for sustainable value creation over time. Before we discuss the quarter in more detail, let me briefly touch on the voluntary takeover offer by Frasers Group. Frasers has been a long-standing partner of HUGO BOSS for many years, both as a customer and as our single largest shareholder. We value the constructive relationship we built and appreciate the continued support for our strategic direction. Following a comprehensive review process supported by 2 independent external opinions, both the Managing Board and Supervisory Board concluded that the offer price of EUR 38 per share does not reflect the long-term potential of Hugo Boss. We, therefore, jointly recommended that shareholders do not accept the offer. Our assessment reflects our conviction in the stand-alone value creation potential of our company. The progress we have achieved under CLAIM 5 TOUCHDOWN reinforces our confidence in our ability to strengthen profitability in the long run, increase cash generation and create sustainable value for all shareholders. Against this backdrop, our focus remains unchanged. We execute our strategy with discipline and unlock the tremendous potential of our 2 brands, BOSS and HUGO. Let me, therefore, briefly revisit CLAIM 5 TOUCHDOWN, which builds on 3 strategic pillars: brand excellence, distribution excellence and operational excellence. We often describe it as a shift from scale towards value creation, being more selective in how we drive growth, placing greater emphasis on profitability and fostering cash generation. From a value creation perspective, 3 elements are, therefore, particularly important. First, strengthening our brands and distribution by enhancing consumer relevance, sharpening our product offering and driving distribution quality. Second, improving profitability through gross margin expansion and disciplined cost management. Third, enhancing cash generation through simplified operations, lower working capital and disciplined capital allocation. Taken together, CLAIM 5 TOUCHDOWN is designed to strengthen the quality of our business while laying the foundation for long-term shareholder value creation. As outlined in our release this morning, the second quarter was characterized by both a volatile market environment and deliberate realignment actions. Sales declined by 9%, which reflects softer consumer demand as well as our strategic realignment measures. At the same time, we delivered improvements across key value drivers of the business. Gross margin improvement by 200 basis points to 64.9%. Operating expenses declined by 4% and free cash flow before leases reached EUR 105 million. These improvements demonstrate that our priorities are translating into measurable outcomes. As part of the first strategic pillar brand excellence, our priority is to strengthen the relevance of BOSS and HUGO and deepen consumer engagement. Throughout the first half, we continue to invest in our brands while further improving marketing effectiveness. Our brand Spring/Summer 2026 campaigns, together with activations like the BOSS Open and the BOSS Summer Club supported brand visibility worldwide. This contributed to an increase in our social media community to almost 30 million followers. Beyond marketing, we continue to sharpen our product offering and reduce product complexity for the upcoming 2026 winter collection. Together, these actions will strengthen brand equity, drive efficiency and create a more focused assortment architecture. And we remain committed to further investing in our brands. In the second half, marketing investments are expected to increase in line with our planned phasing. We will support key commercial moments across BOSS and HUGO, including our winter and holiday campaigns, additional BOSS by Beckham activations and the launch of our new fall authentic luxury campaign featuring Japanese baseball superstar, Shohei Ohtani. Together with our more focused product offering, these investments will further strengthen consumer engagement and brand desirability. Under our pillar distribution excellence, we remain focused on improving distribution quality, strengthening full price sell-through and increased store productivity. Our loyalty program, HUGO BOSS XP continues to gain momentum in the first half. Membership increased by 16% year-over-year to more than 14 million members. Particularly encouraging is the growing relevance of BOSS and HUGO amongst younger consumer who accounted for nearly half of new member acquisitions. At the same time, we remain disciplined in prioritizing full price sell-through and maintain tight control over markdown activity. This contributed to the strong gross margin development achieved in the second quarter and supports our focus on enhancing earnings quality. We also continue to optimize our global store network. In the first half, HUGO BOSS recorded a net closure of 21 stores. At the same time, we continue to refine our store portfolio, including the opening of the first dedicated BOSS Green store in the U.S. market. While these actions temporarily affect volumes, they support higher productivity and a healthier distribution footprint over time. In our third pillar, operational excellence, we are building a more agile, efficient and productive business. We continue to simplify process across our value chain, reduce complexity and improve buying decisions. Increasingly, we embedded AI into planning and inventory management, which helps us improve forecasting accuracy and product allocation. Together with a more focused operating model, these efforts support productivity and better full price execution. Inventory management remains a key focus area for us. Disciplined buying, more focused assortments and ongoing inventory optimization are improving inventory efficiency as demonstrated by our first half performance. At the same time, we remain selective in our investment with a clear focus on our strategic priorities. An important milestone in this context is the successful go-live of the extension of our distribution center in Filderstadt in the second quarter. This investment of more than EUR 100 million will further strengthen the efficiency of our logistics operations in the year to come. And with that, let me hand over to Yves for a more detailed review of our financial performance. Yves, over to you.

Thank you, Daniel, and a warm welcome from my side as well. I will now walk you through our financial performance for the second quarter before discussing our outlook for the remainder of the year. In the second quarter of 2026, sales declined by 9%, reflecting both our deliberate strategic realignment and the challenging consumer backdrop. At the same time, gross margin expansion, disciplined cost management and strong cash generation demonstrate that we are making good progress and strengthening the fundamentals of our business even as market conditions remain challenging. Let me first turn to our top line performance across brands, regions and channels. Starting with our brands. Revenues at BOSS declined by 8% in the second quarter. This reflects targeted measures to strengthen brand equity and profitability, especially in womenswear. At the same time, BOSS Menswear continues to benefit from a strong 24/7 lifestyle positioning from tailoring to casual wear and athleisure. HUGO revenues declined by 14%, reflecting the ongoing repositioning of the brand towards a more focused assortment and stronger contemporary tailoring offering. These actions temporarily impact volumes, but strengthens HUGO's positioning over time. From a regional perspective, EMEA declined by 13%, impacted by softer local demand, weaker tourism and lower traffic in the Middle East following geopolitical developments. The Americas declined by 1% with resilient U.S. brick-and-mortar performance and moderate growth in Latin America. Asia Pacific declined by 5%, reflecting lower revenues in China and Southeast Asia Pacific, while Japan continued to perform comparatively well. Looking at our channels. Retail revenues decreased by 8%, reflecting softer traffic and an ongoing network optimization, including a 4% reduction in net selling space. Comparable store sales in brick-and-mortar were down 6%, proving more resilient than the overall retail business. Wholesale revenues declined by 10%, reflecting our focus on distribution quality and the transition to a more selective partner and assortment approach. Turning to profitability. Gross margin remains a key indicator of our strategic progress. In the second quarter, gross margin increased by 200 basis points to 64.9%. The improvement was broad-based, driven by continued sourcing efficiencies, implemented price increases associated with our Spring/Summer 2026 collection and a higher share of full price sales. Our disciplined approach to distribution and sell-through also supported the improvement despite lower volumes. Importantly, these structural drivers remain in place. Turning to operating expenses. Costs declined by 4% in the second quarter, reflecting our continued focus on efficiency and disciplined cost management. Selling and marketing expenses decreased by 6%, driven by productivity improvements across our retail operations as well as our focus on marketing effectiveness and a more balanced phasing of brand investments throughout the year. Administration expenses increased by 3%, primarily reflecting continued investments in our digital capabilities as well as onetime fees in the mid-single-digit million euro range related to the takeover offer. Excluding these expenses, our underlying cost discipline remained intact. Gross margin expenses and disciplined cost management helped mitigate the impact of lower sales, resulting in EBIT of EUR 49 million -- EUR 59 million and a margin of 6.5%. As expected, lower volumes resulted in operating deleverage. Last but not least, net income after minorities accounted to EUR 33 million, translating into earnings per share of EUR 0.49. Let me now turn to cash generation. Working capital discipline remained a clear priority throughout the first half year. As of June 30, inventories were down 15% on a currency-adjusted basis year-over-year, representing 23.1% of group sales, a notable improvement of 240 basis points versus the prior year. This reflects disciplined buying, more focused assortments and ongoing inventory optimization. Supported by lower inventories and receivables, trade net working capital declined by 11% on a currency-adjusted basis. On a rolling 4-quarter basis, trade net working capital amounted to 19.8% of group sales, remaining around the upper end of our midterm target range of 18% to 20%. We also maintained a disciplined approach to capital expenditure. CapEx amounted to EUR 31 million in Q2, corresponding to 3.4% of group sales, thus well in line with our midterm target of 3% to 4% of sales. Investments continued to focus on selective retail refurbishments, digital initiatives and infrastructure to support our strategic priorities. As a result, free cash flow before leases reached EUR 105 million in Q2 and increased to EUR 137 million in the first 6 months. These results underline the strength of our cash generation, and they provide the flexibility to continue investing in our business while maintaining a strong balance sheet. The operational progress achieved during the first half of the year supports our confidence in delivering on our full year guidance. While market visibility remains limited and geopolitical uncertainty continues to weigh on consumer sentiment, our priorities remain unchanged: enhance earnings quality, improve cash generation and strengthen our business fundamentals. Consequently, we continue to expect currency-adjusted group sales to decline in the mid- to high single-digit range. While our strategic realignment is progressing according to plan, we expect the external environment to remain volatile during the second half, particularly given ongoing geopolitical uncertainty and its impact on consumer demand. Currency translation is expected to remain a moderate headwind to reported sales. From a regional perspective, we now expect sales in EMEA to decline in the high single-digit to low teen percentage range, thereby also incorporating the situation in the Middle East and its spillover effects. At the same time, the Americas and Asia Pacific are now anticipated to decline in the low to mid-single-digit range. For EBIT, we continue to expect a range of between EUR 300 million and EUR 350 million. Targeted gross margin improvements and continued cost discipline are expected to support profitability while lower revenues are anticipated to result in deleverage. While visibility remains limited, the operational progress achieved in the first half supports the execution of our plans for the remainder of the year. With that, let me hand back to Daniel.

Thank you, Yves. Ladies and gentlemen, let me close with 3 key messages. First, the first half of 2026 demonstrates tangible progress on the CLAIM 5 TOUCHDOWN. Despite top line pressure from our strategic realignment and the challenging market environment, we are strengthening the fundamentals of the business. Gross margin is expanding, inventories are lower and cash generation is strong. Second, 2026 remains a deliberate year of realignment. We are prioritizing long-term value creation over short-term volume, building a stronger, more productive and more profitable HUGO BOSS. And third, we remain convinced of the long-term value creation potential of our business. Based on our 2 strong brands, a clear strategic road map and disciplined execution, we remain focused on creating attractive shareholder returns over time. Thank you very much for your attention. We are now happy to take your questions.

[Operator Instructions] Our first question comes from Grace Smalley from Morgan Stanley.

The first one would be on EMEA. If you could just elaborate further on what you've seen in Europe as we move through the second quarter and then into July, I guess, touching on both the direct and indirect impact from the events in the Middle East, so on the direct region, but also consumer sentiment and tourism? And then my second question would just be on gross margin, very strong performance in Q2. As we look ahead to the second half of the year, should we be expecting a kind of similar level of year-over-year expansion in the second half as you did in Q2? Or is there anything we should expect that's different in terms of the gross margin build in the second half?

Thank you very much, Grace. I will take both questions. So perhaps -- starting with gross margin. First of all, I want to really reiterate that we are really happy how we performed with our gross margin, plus 200 basis points versus prior year. It's a very good performance, thanks to a lot of sourcing efficiency, higher full price sales, lower markdowns and some pricing effects. So we are going in the right direction. We see that the execution of CLAIM 5 TOUCHDOWN is really bearing the fruits here. And the majority of those effects will continue since we are committed to continue the execution of our CLAIM 5, especially if you look at the measurements that we are taking, for example, from the product assortment point of view, we are reducing the collection complexity. That has a kind of ripple effect that we are capable of really driving economies of scale in sourcing while at the same time, further reducing the number of vendors that we're having. So we are placing a higher number of volume behind one order for a vendor. So this is really helping us in our gross margin improvement. And also, we stick to our game plan. We will continue to drive high-quality revenues over short-term volumes, and this will also help us with lower markdowns, especially in the retail environment that we can influence on our own. So structurally, this is strategically intended is that our gross margin will be improving. And I think there is more to come in the next quarters. And also long term-wise, we want to get the gross margin up further as we discuss this. Regarding EMEA, I think you make a comment regarding the recent performance. I think I have already some comments during my presentations. So definitely, you have to keep in mind the direct impact of the Middle East region in our EMEA numbers. So first of all, it's, I think, clear in comparison to Q1 that we operated the full quarter in this kind of situation of the Middle East crisis. And of course, this was not helping only not only the UAE and Qatar, but also indirectly our wholesale business in Israel and in some adjacent countries in this kind of region. So this was not helping. On top of this, I think, as we all know, that HUGO BOSS is by majority exposed to European markets, including Middle East. It means like 65% of our business. We saw also some indirect effects coming from lower travel activities and also consumer sentiment was down. You have seen higher food price -- fuel prices led to the fact that people were going less to specific destinations, also to outlets. So traffic was low with the majority of a lot of countries like U.K., Germany and France, and that was driving this kind of development.

Okay. And if I could just follow up, have you seen that continue in terms of current trading to date on the kind of European impact on consumer sentiment and tourism and maybe a broader comment on current trading globally as well.

Yes. I think I would first highlight the overall global, let's say, information around current trading. I mean, Grace, as you all know, we are not very specific regarding current trading. I think we all should be aware of the effect that we are taking a lot of strategic measurements and that we are in the middle of executing a lot of, let's say, strategic steps within our CLAIM 5 strategy. So what I can say is and what I want to say that for the -- how we started in the quarter and we've just started, it's just 1/3 of this quarter, we are in line with our expectations, how we operate.

The next question comes from Dhar Manjari from RBC.

I also have 2, if I may. My first question was on the Filderstadt extension. I just wonder if you could give us some color on how we should think about the time line of the ramp-up there? And what sort of savings we should expect as that gets up and running? And then my second question was a follow-up from Grace's question on gross margin. I just wondered if you could give us some more color on the sort of expectations for further sourcing efficiencies. You've obviously seen a lot of benefits so far. But in terms of work left to do, how much is left? And how long should we expect sourcing efficiency benefits to persist?

Thank you very much for your questions. So regarding Filderstadt, so this is our flat goods warehouse close to Stuttgart, where we invested more than EUR 100 million. We have had now the go-live in a very automated way. And with this, we are now capable of in-sourcing our HUGO apparel operations, which has been outsourced to third party. So with the -- now with the winter campaign and the next campaign coming in, we will directly route them to Filderstadt. So we terminated the contract with a third party for HUGO apparel, and this will give us efficiency gains in the low double-digit million euro amount going forward, starting actually with Q3 going forward. So this -- all these measurements will make us more efficient when it comes to unit cost, how we operate. Plus, of course, we will have some savings on the transportation piece once we deliver especially wholesale and retail to our European customers because we can combine this with HUGO and BOSS together. Regarding gross margin, so we keep on going, especially with product assortment collection complexity. We intend to further reduce the collection complexity. We further intend to reduce our vendors. So this is a phenomenon that's going to prevail over the next 4 quarters, as I can say. So this will keep on going. And also on the airfreight share, as a matter of fact, we were finalizing the year '25 with still a high single-digit number. We want to really completely go -- have a kind of no air freight kind of policy going forward and have just the exceptions. So we are -- so there's still more in the pipeline to come when it comes to sourcing efficiency really to be more efficient. But I still want to highlight this trickle-down effect once we reduce the assortment, this is also really helping us on the gross margin side.

The next question comes from Jurgen Kolb from Kepler Cheuvreux.

Two questions. First one, we're deeper in the year. I was wondering if you could maybe share some thoughts on your order book after, obviously, sales are down 9%. At some stage, the switch has to flip again to growth. So maybe a few comments on what you're seeing maybe for early 2027 in terms of orders from customers? And then secondly, specifically on HUGO and BOSS women, how far are you with the realignment process there? Is that all going according to plan? And also here, maybe an add-on comment from what retailers are giving you as a feedback that would be very helpful.

Thank you, Jurgen. I take this question about the order book. So in line with CLAIM 5 TOUCHDOWN, we are deliberately sharpening our wholesale distribution by reducing long-tail exposure. We also do prioritize full price quality over volume. That's a clear measurement that we decided to do and building an even healthier order book going forward. Against this backdrop as well as the still challenging macroeconomic environment and continued inventory discipline amongst wholesale partners, order intake remains below the prior year level. That's clear. But importantly, engagement with our key strategic partner remains strong, giving us confidence in the long-term development of the wholesale business. We are having a very strong relationship to all our key customers. When you see us our visibility in the stores, it's stronger. We continuously gain space in the stores. I would like to underline our sub-brands, the initiative that we take or the strategic initiative we take in the beginning to add sub-brands that helps us to really expand our footprint in the retail, especially in department stores. And sell-through numbers show positive, and we remain absolutely positive that the results of our wholesale business continue to be positive, especially in BOSS mens. Womenswear, I think we have also did a lot of progress there. It's always a bit early to see. But I think we have -- we actually -- we are undertaking and Kirsten has undertaken already activities to address the current challenges in the business. But the implementation or the real results you're going to see in the second part of 2027 when the real collection is at the moment fully developed under her direction. But anyway, quick wins has already immediately improved some results. And we are positive that we going to gain market shares back on womenswear, but it always takes some time as we don't want to -- as we said, we don't want to go too fast. We want to build it on full price on a long-term view. Therefore, we are not rushing into something that is on risk. But again, Kirsten has really put the new handwriting in and that you will see in the second half of next year.

Very good. Very good. Maybe a quick follow-up. You mentioned you opened the first green store in North America. What do you see as a potential target number for that specific collection?

Well, that's a bit early to say. However, the demand of green is really growing because knowing all these brands coming from Asia to us, let's talk about Arc'teryx. And actually that we are the brand that has this sport element combined with fashion really gives us a unique placing in the market. As you know, we already had golf wear. We had tennis wear. We have a capsule collection also in the auto industry. And especially our coming event, the Australian Open, where we have taken position of the outfit of the Australian Open will help us to further put relevance into that market, always with the positioning, not as a completely sports brand, but a sports/fashion brand that goes into that area. And we also with our testimonials like Taylor Fritz, they show and it shows clearly that the interest of having and wearing fashion brands on these events is growing, and we were one of the first that has taken their step. So we are very positive on BOSS Green. There's more shops to come. And so far, the results are very, very promising.

Next question comes from Thomas Chauvet.

Two questions, please. The first one on the XP loyalty program, you indicated 16% increase in membership to 14 million customers. That's a big number. Could you give us some color on how the average XP member compares to a normal BOSS customer, if I can say, in terms of age or frequency of visits, average basket? And I suspect a lot of these members are recruited online. So how do you explain the directly operated digital channel was down double digit in the first half when the XP membership increased by a double-digit percentage? And my second question on Frasers' shareholding and your earlier comments, Daniel, after their recent options exercise and the initial results of the offer before the extension to next week, they have close to 38% of the capital, if I'm not mistaken, an additional 30% exposure through short put positions and the Marzotto family is still at 14%. So the free float is now just under 50%. Could you comment on how, obviously, the nature and frequency of your engagement with them has evolved maybe a bit beyond the existing wholesale relationship? How do you manage good governance and the independence of the company considering also that Frasers CEO sits at the HUGO BOSS Supervisory Board, which is maybe a little bit unusual in a way.

Sorry, 2 questions. I start with the XP. So we iterated this program nearly 2 years ago. And we always said that we not just want to have customers that come into our stores. So our intention is to turn customers into fans. And what this XP program is just giving us is really demonstrate with clear results that these customers shop more either online or so in our stores. So the return on investment is good, but we are gaining these customers not just with discount. We give them an added value. We invite them to our events that we are organizing. We really go close with them in relationship. And with the brand and activate the brand in their mind. And the result also to gain younger consumers through that program is exactly what our aim was in the past. And we always say it doesn't matter where the customer buy. Is it online or offline as long as he is a loyal BOSS customer, that's what counts. And some goes in the store, some is online, it doesn't matter. We have to be omni -- with our omnichannel, we want to be omnipresent. And I think with the customer loyalty program, we have the perfect part and the perfect program in place, I would say. That is the first question. And then if we come back to Frasers. So First of all, I want to say that we maintain a regular and constructive dialogue with all of our shareholders and especially also with Frasers Group. We value also Frasers Group as a long-term shareholder and expect to continue our constructive and very professional relationship with them ongoing. At the same time, we have a clear strategic framework through CLAIM 5 TOUCHDOWN in our focus, and we remain also disciplined to execute that strategy. And we get full support from our advisory Board. We get full support also from Frasers. So we can expect that we continue our strategy and that there is no change on our -- on the strategy whatsoever. So we are very positive and pleased with how much support we get also from the Marzotto as a main shareholder. So that is continuing on a very good pace, I would say. And then also just on what we said with the Frasers confirmed in the official document for the voluntary takeover offer only a few weeks ago that they fully support the Chairman of the Supervisory Board, the entire Management Board and also me. And I think that was a clear statement there. So following the rumors, Frasers also confirmed this position to us and again, confirmed it again. So there is nothing more to comment on the rumors. Anything else, I think that's it for your question.

[Operator Instructions] The next question comes from Zuzanna Pusz from UBS.

It's Rob from UBS. I just had one question about gross margin development. It was very impressive in Q2. But last call, you mentioned that you are pretty confident about the outlook for raw materials into 2026. How should we be thinking about 2027 given the recent oil price? I know it's quite volatile, came off a bit, again go up. So how should we be thinking about 2027? We hear a lot of efficiencies coming from supply chain, but -- is there going to be a headwind? Or if you could even quantify the raw material headwind, that would be great.

Thank you very much, Rob, for your question. So first of all, regarding the raw materials, I think it's clear for 2026 that we -- 2026, we expect no material effect coming from raw materials. And still going forward, I mean, you know that we are living in a volatile market going up and down. Also some other influences regarding, for example, wood prices are happening. On the other side, you have also the freight and the spot rates there. I wouldn't view this as a big headwind going into next year. I think we are well aware of this, and we can manage this and from the time being, the visibility what we are having, we can -- with our internal measurements, we can by far outweigh any, let's say, external effects also coming into the year 2027.

The next question comes from Chiara Battistini from JPMorgan.

I have 2. The first one, if you could share already some initial color or outlook on the pricing for next year for fiscal '27? And the second question on OpEx into H2. Can you please remind us on marketing, how much that was down in Q2 and also how to think about the phasing of the marketing spend in H2, please?

Thank you very much, Chiara, for your questions regarding pricing. So also there, I think what's quite visible is we have to look at the performance of our brands. I think as we all know, we have invested a lot. And as a matter of fact, you have seen already the price increase that we did with the Spring/Summer '26 campaign. So we are observing it closely, and we will exploit some price increases more on the smart basis. So we might do some smart adjustments whenever there is a possibility that we need. Also when it comes to different developments from the OpEx to compensate this. But actually, for the time being, we have all the OpEx overall, I have to say, well under control. You've seen the development of our gross margin. I think we would take some steps. But I would also say, first of all, we have to put more marketing behind it, increase the brand equity, increase the relevance of own brands, BOSS and HUGO. And with this, we also have more potential somehow on the pricing front for the time being, we are not, let's say, planning tremendous price increases for 2027.

But let me also add to that, that already from the beginning, we invested in the beginning gross margin into our product. So we have concluded that phase and really increased our quality of our product tremendously. And we just haven't -- we just -- we haven't done just price increases for the sake of price increases. We really increased the price value of our product tremendously. And therefore, we have put that phase behind us. There is -- there was a big step we have done. And now we also got the benefit of the gross margin back, but it's all time and it all came with a better product with a better quality. And that remains that we, of course, going forward, always look where we can improve, what we can do to optimize and continue to give our product the best price value, just to add to Yves's comment. And then I come back to the marketing. So yes, the marketing expenses are down around 15%. But it's -- this line is actually more a phasing effect and maybe continue to focus also marketing effectiveness rather than on structural reduction in brand investment. That's not what's happening. So at 7.1% of group sales, marketing investment in the first half remain fully aligned with our strategic ambition. And in addition, our marketing activities are weighted towards the second half of 2026 with a strong activation calendar planned around key campaigns, sporting events and also very important, the holiday season, which gained a lot of commercial impact. So we, therefore, fully remain committed to investing behind our brands, but also while maintaining a disciplined return on investment focused approach. But everything goes hand-in-hand and everything has to be in a balanced way. What Yves also said on the product and when you do marketing, it creates more traffic to the stores. And of course, it's going to build brand equity. So there is nothing that we're going to lose or not do. Actually, we do it with more efficiency and hope that even gets -- the message even gets stronger. So less with more.

Great. Well, thank you, Daniel. Thank you, Yves. Ladies and gentlemen, after 45 minutes on the call, that completes, as usual, our Q2 results release. Rest assured that we will follow up with anyone who did not have the opportunity to ask a question today. Also in case you have any open topics, please feel free to contact the Investor Relations team as always. Thank you for your participation, and goodbye.

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