H&M Group has delivered a strong third quarter (June to August 2025), with operating profit rising by 40% to SEK 4,914 million (£388.77m), compared with SEK 3,507 million (£277.42m) in the same period last year.
According to its nine-month interim report, which was released today (25 September), H&M Group recorded an increased operating margin of 8.6%, compared to 5.9% a year ago.
While net sales in local currencies climbed 2% in Q3, the stronger Swedish krona impacted recorded sales. The group reported SEK 57,017 million (£4.51 billion) in sales, down from SEK 59,011 million (£4.51bn).
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The brand – which owns H&M, COS, & Other Stories and Arket – said gross profit in Q3 stood at SEK 30,143 million (£2.38bn), delivering a gross margin of 52.9%, up from 51.1% in the same period last year.
The report attributes the margin enhancement to improvements across supply chain operations and favourable external cost factors, offsetting some adverse currency effects.
On the cost side, the group reduced selling and administrative expenses by 5% in SEK terms to SEK 25,167 million (£1.99bn).
The company highlighted that cost control has been a critical lever in strengthening profitability.
As of 31 August 2025, the group operated 4,118 stores globally — a net reduction of 180 stores (–4%) year-on-year. During the first nine months, 36 new stores opened and 171 closed.
Over 30% of H&M’s sales now occur online and the business said it is enhancing customer experience via upgraded store layouts, tech investments, and tighter alignment between physical and digital channels.
H&M launched its first store, and an online presence, in Brazil at end of August 2025, with further store openings planned across Latin America. Other planned expansions include El Salvador, Venezuela, Paraguay, and Malta, via franchise, as well as the first COS store in India.
H&M expects sales in September 2025 to match last year’s levels in local currency terms, but said this must be viewed against strong comparatives from 2024.
To mitigate pressures ahead, H&M says it will lean on supply chain flexibility, pricing strategy and cost control.
Robyn Duffy, consumer markets senior analyst at RSM UK, said the latest results show H&M’s “turnaround strategy is making progress”.
“Despite sluggish sales growth of just 2% in local currencies, operating profit surged 40% on the back of tighter stock management, an improved gross margin and firm cost control. A sharper product mix and faster stock turnaround reduced inventory by 9% year-on-year, easing markdowns and lifting margins.
“Overall, H&M is showing clear progress on its turnaround journey. The next challenge will be sustaining profitability while continuing to invest in product, customer experience, stores and digital capability to reinforce its global position.”
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