H&M adapts its purchases to a new world of tariffs and trade barriers, while CEO Daniel Ervérs stricter cost control begins to show in unexpectedly good margins.
H&M reports a profit before tax of 5.3 billion kronor for the broken fiscal year's second quarter, ended in May. This can be compared to 6.7 billion kronor during the corresponding quarter last year.
Net sales during the quarter fell to 56.7 billion, compared to 59.6 billion a year earlier.
Negative external factors
The profit was in line with expectations, but sales were weaker than expected. Analysts had on average expected a profit before tax of 5.3 billion kronor on a turnover of 57.1 billion kronor during the quarter, according to a compilation of forecasts made by Bloomberg.
"The quarter's result was negatively affected by higher purchase prices due to a more expensive US dollar and higher freight costs, but also because we have continued to invest in the customer offering," says CEO Daniel Ervér about the development in a comment in the report.
"The negative external factors that have increased the cost of purchases in the first half of the year will turn out to be positive in the second half of the year," he adds.
Sales measured in local currencies increased by 1 percent in the second quarter, despite 4 percent fewer stores at the end of the quarter compared to the same period last year, according to H&M.
Repurchase in the summer
H&M adds that June sales look positive:
"The H&M Group's sales during June 2025 are expected to increase by 3 percent in local currencies compared to the same month last year. The sales increase of 3 percent is burdened by a negative calendar effect of approximately one percentage point," the clothing chain writes in the report.
In connection with the report, H&M announces that the company, in line with the authorization from the annual general meeting in May, makes repurchases for the company's long-term incentive program until July 17. The maximum total number of acquired shares is 1.1 million.
