H&M has reported a better-than-expected rise in operating profit during its final quarter, but warned it was experiencing a slower start to its new financial year.
The Swedish fashion giant said group sales were expected to fall 2% in the two months ending January 31, which it blamed on “strong sales” during the Black Friday week at the end of November, leading to “subdued demand” in several markets in December.
H&M chief executive Daniel Ervér said the start of the year had also been “marked by continued geopolitical and economic uncertainty”.
The note came as the fashion retailer, which also owns Cos and Weekday, saw its operating profit increase 38% to SEK6,364m (£522m) in the quarter to November 30, while sales rose 2% in local currencies.
Ervér said: “Performance during the quarter was largely driven by a stronger customer offering, good cost control and improved inventory productivity, as well as external factors that positively affected purchasing costs.”
In the year to November 30, 2025, H&M saw sales rise 2% and delivered an increase in operating profit to SEK18,395m (£1.5bn).
Ervér said: “This progress reflects determined efforts in our most important areas, with a focus on strengthening the product offering, the customer experience and our brands.”
“We are expanding through our stores and digital channels. Mostly in growth markets – including Brazil and other parts of Latin America. We are continuing to optimise the store portfolio.
“For 2026, we estimate that the sales effect from the store optimisation will turn around to become slightly positive.
“In addition to our investments in new markets, new stores, and an upgraded customer experience in a large share of our existing stores, we are also investing in the tech infrastructure. More data-driven decision-making and increased use of AI are improving our accuracy and giving us more tools for expressing creativity, thereby further strengthening our customer offering.”
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