Net sales for the quarter ended May 31 fell 3% to SEK 54.8 billion (US$5.66 billion) from SEK 56.7 billion (US$5.85 billion) a year earlier, while sales in local currencies were broadly unchanged despite the retailer operating around 3% fewer stores. Gross margin improved to 56.6% from 55.4%, with gross profit reaching SEK 31.0 billion (US$3.20 billion).
Operating profit before one-off restructuring costs rose 11% to SEK 6.6 billion (US$680 million), lifting the operating margin to 12.0% from 10.4%. After restructuring costs of SEK 679 million (US$70.11 million), operating profit was broadly unchanged at SEK 5.9 billion (US$610 million). Net profit remained stable at SEK 4.0 billion (US$410 million), while cash flow from operating activities increased 24% to SEK 10.6 billion (US$1.09 billion).
For the first six months of the financial year, net sales totalled SEK 104.4 billion (US$10.78 billion), down from SEK 112.0 billion (US$11.56 billion), or 1% lower in local currencies. Gross margin improved to 53.8% from 52.3%, while operating profit before one-off costs increased 14% to SEK 8.1 billion (US$840 million). Reported operating profit rose to SEK 7.4 billion (US$760 million) from SEK 7.1 billion (US$730 million), and net profit increased to SEK 4.7 billion (US$490 million).
The retailer also reduced inventory by 10% year-on-year to SEK 34.9 billion (US$3.60 million), with stock representing 15.8% of rolling 12-month sales compared with 16.6% a year earlier. H&M said the improved inventory position reflects greater supply chain efficiency and a higher proportion of in-season purchasing, aimed at improving product availability while reducing working capital. These developments could be of value to leather suppliers as brands continue to focus on leaner inventories and more responsive sourcing.
Looking ahead, H&M expects June sales in local currencies to be in line with the same month last year. The group plans to open around 90 new stores and close around 170 during 2026 as it continues optimising its retail network, while expansion in Latin America will continue with new markets including Paraguay later this year and Argentina in 2027.
