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H&M has reported that operating profit rose by 38% to SEK 6.3bn (£521m) in the fourth quarter, with operating margin ahead of expectations at 10.7%, but has warned of weaker Christmas sales.
The fourth quarter performance was largely driven by tight cost control, an improved inventory productivity and a “stronger” customer offering which saw sales rise by 2% to SEK 59.2bn (£4.85bn).
For its full-year results, net sales increased by 2% in local currencies to SEK 228.3bn (£18.69bn), and operating profit increased to SEK 18.395bn (£1.51bn).
It comes despite the group operating with 152 fewer stores at the end of the quarter compared to the previous year. At the beginning of the fourth quarter there were 180 fewer stores than at the same point in time last year.
The group said the optimisation of the store portfolio has had a “somewhat negative impact” on sales in 2025 due to store closures and rebuilds. For 2026, however, the sales effect from the store optimisation programme is “expected to be slightly positive”.
The group completed the integration of Monki into Weekday during the period, resulting in the closure of all standalone Monki stores. Portfolio brands, excluding Monki, saw a 5% increase in local currencies during the final three months of the year.
Looking ahead, the group warned that projected sales for the period between 1 December 2025 and 31 January 2026 are expected to fall by 2% in local currencies.
The group attributed this to subdued demand in December following strong Black Friday trading and a negative calendar effect from the Chinese New Year, which falls in February this year.
Chief executive Daniel Ervér said: “Through a strengthened customer offering, good cost control and improved inventory productivity, we continue to take important steps towards all our long-term targets in a challenging environment.”
