Swedish fashion giants H&M have reported a dip in profits in the first quarter, driven by “negative external factors”, increased markdowns of products and investment.
For the period covering December 1, 2024 to February 28, 2025, H&M reported a 2.4% dip in gross profits to SEK 27,169m. The retailer noted that markdowns during the period by around 1 percentage point were due to a later Black Friday, which also increased logistics costs for the quarter.
Operating profit also slipped to SEK 1,203m from SEK 2,077, which the retailer noted was attributable to lower gross margins.
The retailer noted that the headwinds it experienced in the first quarter are expected to be “significantly smaller in the second quarter”.
Net sales in the period increased 3% to SEK 55,333m, driven by strong trading in western, southern and central Europe.
H&M said that online continued to perform well during the period, and said that group sales in the month of March are expected to increase by 1% in local currencies.
H&M chief executive Daniel Ervér said: “Although we have made important progress in our plan and have good cost control, our sales and earnings in the quarter were somewhat weaker than planned—but the first quarter is the smallest quarter of the year for us in terms of sales and margin, and we are confident going forward.
“We have a stable financial position that gives us the flexibility to prioritise what creates the most value for our customers. With macroeconomic and geopolitical uncertainty, it is important that we continue to focus fully on our plan and offer the best combination of fashion, quality, price and sustainability for everyone”.
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