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H&M has seen operating profit rise 26% to SEK 1.51bn (£120m) during the first quarter, despite a slight decline in local currency sales and a reduced store count.
Net sales for the period fell 1% in local currencies to SEK 49.6bn (£3.96bn). This was in part due to a 4% fall in the group’s total number of stores in the quarter compared with the previous year.
Stronger Swedish currency further dampened results, with translation effects shaving nine percentage points off net sales. However, gross margin improved to 50.7% from 49.1% following reduced markdowns and better cost control.
The group reported that stock-in-trade decreased 16% to SEK 34.6bn (£2.76bn). This reduction in inventory was attributed to improved productivity and deeper collaboration with global suppliers to manage seasonal assortment.
Elsewhere, sustainability data released alongside the latest results showed that 91% of materials used by the group in 2025 were recycled or sustainably produced. Recycled materials alone accounted for 32% of commercial products.
Looking ahead, the group expects sales for March 2026 to increase 1% in local currencies. This follows a period of cautious consumption in December and January, which was offset by the performance of spring collections in late February.
Chief executive Daniel Ervér said: “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.
“In a still challenging macroeconomic environment marked by increased geopolitical uncertainty, flexibility is more important than ever. With the customer in focus, short decision paths and good cost control, we can adapt to a rapidly changing environment and continue to offer our customers relevant fashion with the best possible value for money.”
