Companies

H&M reports first half progress

Jun 27, 2025 Sweden

Despite reporting only a slight increase in sales in the second quarter and the first half, the CEO highlighted the progress that the Sweden-based fashion group is making towards achieving healthier profitability

“Our plan, with its focus on the product offering, the shopping experience and brand, is again confirmed by the progress we see. The positive development in important areas such as online, H&M womenswear and H&M Move, as well as continued focus on good cost control, will contribute to a profitable sales development”, says Daniel Ervér, CEO, who also highlighted the consumers cautious behaviour amid an uncertain macroeconomic and geopolitical developments.

Second Quarter Results

In the second quarter of the current fiscal year, which ended on the 31^st of May, the group’s sales increased by 1% in local currencies despite having 4% fewer stores than in the same period last year. Excluding the impact of store closures, sales increased by 3%.

However, when converted into Swedish kronor, net sales decreased from 59.61 billion (5.36 billion) to 56.71 billion Swedish kronor (5.1 billion euros). This drop was mainly due to the strengthening of the currency, which had a negative currency translation effect of around 6 percentage points.

H&M’s second quarter gross profit declined to 31.43 billion Swedish kronor (2.83 billion euros) from 33.57 billion Swedish kronor (3.0 billion euros), with the gross margin contracting from 56.3% to 55.4%. This was mainly due to external factors, such as a stronger US dollar and high freight costs, which raised purchasing costs, as well as investments in customer experience.

Thanks to lower gross margins and negative currency translation effects, the company’s operating profit was 5.91 billion Swedish kronor (531.6 million euros) in the second quarter, as compared to 7.1 billion kronor (638.7 million euros) in the same period previous year. The operating margin was 10.4% in the quarter, as compared to 11.9% in the same period of the previous year.

In the second quarter of the current fiscal year, H&M reported a result after tax of 3.96 billion Swedish kronor (352.2 million euros), which is comparable to 5.06 billion Swedish kronor (455.2 million euros) in the second quarter of last year.

First Half Results

In the six months to the 31^st of May, the group’s sales increased by 1% in local currencies, as compared to the same period of the prior year. However, when converted into Swedish kronor, the group’s net sales declined from 113.27 billion (10.19 billion) to 112.05 billion (10.12 billion euros).

In the first half of the current fiscal year, the company’s result after tax decreased from 6.29 billion Swedish kronor (565.8 million euros) to 4.54 billion Swedish kronor (408.4 million euros) in the first half of fiscal 2024.

June Outlook

H&M expects sales in the month of June to increase by 3% in local currencies, as compared to with the same month of last year. This increase is negatively impacted by a calendar effect of around one percentage point.

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Image Credits: fashiongonerogue.com

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