Companies

H&M reports higher profitability despite slight sales decline in the first quarter

Apr 2, 2026 Sweden

The fashion group reported improved margins and a rise in operating profit in the first quarter of 2026, despite a slight decline in sales due to currency headwinds and store optimisation measures

“The quarter began in December with weaker demand following strong Black Friday trading in November. Towards the end of the quarter our well-received spring collections contributed to a positive sales trend, which also continued into March”, explained Daniel Ervér, CEO of H&M.

First Quarter Results

In the first quarter of the year, which ended on the 28^th of February 2026, the company’s reported net sales totalled 49.61 billion Swedish kronor (4.53 billion euros), reflecting a 1% year-on-year decrease. Net sales in SEK were reduced by just over 9 percentage points due to the stronger Swedish króna.

The group continues to optimise its store portfolio to support long-term profitability. There are 4% fewer stores than in the previous year, partly due to the closure of all Monki stores in 2025. While this had a slight impact on first-quarter sales in 2026, it is expected to have a modestly positive effect over the full year.

H&M reported a gross profit of 25.14 billion Swedish kronor (2.29 billion euros) in the first quarter, corresponding to a gross margin of 50.7%. This is an improvement on the 27.18 billion kronor (2.48 billion euros) and 49.1% recorded in the same period in 2025. The company noted that the costs of markdowns decreased somewhat compared with the previous year.

The fashion retailer’s first quarter selling and administrative expenses decreased by 1% in local currencies and by 9% in SEK year-on-year, reaching 23.63 billion Swedish kronor (2.15 billion euros). Meanwhile, operating profit increased by 26% to 1.51 billion Swedish kronor (137.9 million euros), and the operating margin improved from 2.2% in the first quarter of last year to 3.0%.

“Through continued good cost control, greater efficiency in our product purchasing and external factors that positively affected purchasing costs, we strengthened both the gross margin and the operating margin compared with the same quarter last year”, added the CEO.

Daniel Ervér also highlighted: “The results of this can also be seen over the past 12 months, as the operating margin has improved by 1.4 percentage points to 8.4 percent”.

Between the 1^st of December and the 28^th of February, the group achieved a net profit of 704 million Swedish kronor (64.3 million euros), up from 579 million Swedish kronor (52.8 million euros in the same period last year.

The H&M Group expects its sales in March to increase by 1% in local currencies compared to the same month of 2025.

1 SEK = 0,091 EUR

Image Credits: fashiongonerogue.com

Sweden Companies Fashion H&M Quarter Results Results