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H&M has reported “lower than planned” Q2 sales and a flat profit for the March-May period, saying tighter inventory management limited its ability to fully meet customer demand even as profitability improved.
Net sales fell to SEK 54.8bn (£4.27bn) down from SEK 56.7bn (£4.42bn) the prior year. In local currencies, sales were broadly in line with the previous year despite the retailer operating around 3% fewer stores than at the same point in 2025.
Gross profit declined slightly to SEK 31.0bn (£2.42bn) from SEK 31.4bn (£2.45bn), while the gross margin improved to 56.6% from 55.4%.
However, operating profit excluding one-time costs rose 11% to SEK 6.59bn (£506m). Reported operating profit was SEK 5.9bn (£460m), broadly unchanged from the same period last year, with the operating margin improving to 10.8% from 10.4%.
It comes as selling and administrative expenses fell 1% to SEK 25.1bn (£1.96bn). The quarter included SEK 679m (£52m) in restructuring costs linked to organisational changes across the company’s sales markets and central sales operations.
Daniel Ervér, chief executive officer of H&M, said sales were weaker than planned during the quarter, despite profitability and inventory levels developing positively.
He said: “Sales in the quarter were somewhat lower than planned, while profitability and the stock-in-trade situation developed well. The profitability improvement and increased inventory productivity are in line with our long-term work to lay the foundations for sustainable and profitable growth.
“The tighter inventory management has, however, in some cases affected our ability to fully meet demand. Our assessment is that there is potential to further increase precision in order to create a better balance between availability and demand.”
He added: “We operate in a world that continues to be characterised by uncertainty and rapid change. The improvements we have made in recent years have strengthened profitability, simplified operations and increased our ability to act closer to the customer. Centred on the customers’ needs, we continue to strengthen the product, customer experience and brand in order to always offer the best combination of fashion and quality at the best price, in a sustainable way.”
