For the three months ended 31 August 2026, H&M Group’s net sales rose to *SEK57.2bn, from SEK57bn a year earlier. In local currencies, sales increased 1%, while the group ended the quarter with around 2% fewer stores than at the same point last year.
The bigger movement came through on the bottom line. Operating profit increased 23% to SEK6bn, lifting the operating margin to 10.6%, compared with 8.6% in the prior-year quarter.
H&M CEO Daniel Ervér said the company’s work across purchasing, cost control and operations had contributed to a more profitable business, while there remained further potential to grow sales.
Gross profit increased to SEK30.9bn, with the gross margin improving to 54%, from 52.9% a year earlier.
The margin was boosted by approximately 1.6 percentage points from one-time effects related to tariffs and goods imports that had increased the cost of goods sold in previous quarters. H&M said these effects should therefore be viewed separately from the underlying improvement in profitability.
Selling and administrative expenses declined 1% to SEK24.8bn, helping support the stronger operating result.
Profit after tax increased to SEK4.1bn from SEK3.2bn, while operating cash flow rose 19% to SEK11.9bn.
For the first nine months of the financial year, however, sales remained below the previous year in reported terms. Net sales amounted to SEK161.6bn, compared with SEK169.1bn, although sales in local currencies were in line with the first nine months of the previous year.
Operating profit for the nine-month period increased 12% to SEK13.5bn, with the operating margin rising to 8.3% from 7.1%. Operating cash flow increased 17% to SEK26.5bn.
H&M is also changing how it manages its product pipeline, gradually increasing the proportion of in-season purchasing.
The strategy is intended to allow the retailer to respond more quickly to customer demand, while balancing fashion trends with quality and price. Ervér said the approach would help H&M strengthen its position across both new fashion and updated core products.
Digital infrastructure is another part of the transformation. The retailer is investing in systems intended to improve precision across the value chain, from product development and purchasing through to allocation, marketing and sales.
At the same time, H&M is moving decision-making closer to customers as it implements a simplified organisational structure.
The retailer is also working on its store portfolio, with a focus on optimisation and upgraded locations rather than simply expanding its physical footprint.
H&M said a more optimised store portfolio, upgraded stores and a more personal digital experience are intended to improve both customer experience and productivity across physical and online channels.
The group is also increasing its use of AI and other technology across the business, particularly within the supply chain and areas where greater precision can improve product availability and customer relevance.
Stock-in-trade stood at SEK39.4bn at the end of August, up from SEK37.9bn a year earlier. H&M attributed the increase largely to the higher value of goods in transit, reflecting disruption in global supply chains and temporary effects from the consolidation of its European logistics network.
The group said the composition of its inventory remained good and that it was well positioned for the autumn season.
Looking ahead, H&M expects sales in September 2026 to increase by 1% in local currencies compared with September 2025.
The retailer is entering the autumn period against a backdrop of continued pressure on consumers from high living costs. Its response is to focus on product appeal, shopping experience and brand relevance while using technology, supply chain improvements and operational efficiencies to strengthen the economics of the business.
For H&M, the latest results suggest that profitability improvements are currently running ahead of sales growth. The next phase of its strategy will be to translate those operational gains into stronger customer demand while maintaining greater discipline across purchasing, costs, stores and inventory.
*Swedish Krona
The full report is available on hmgroup.com.
