Swedish fashion brand H&M has reported a strong rise in profits in 2025, driven by tighter cost control and better stock management, even as sales growth remained modest across its global estate.

For the full year to 30 November 2025, the business recorded operating profit rose to about £1.38bn (SEK 18.4bn), compared with £1.30bn (SEK 17.3bn) a year earlier, while profit after tax increased to approximately £905m (SEK 12.1bn).

The group posted net sales of around £17.1bn (SEK 228.3bn), and said it ended the year on a strong note, with operating profit in the fourth quarter jumping 38% to around £477m (SEK 6.4bn), despite trading with roughly 4% fewer stores than the same period last year.

H&M said inventory levels improved significantly during the year, with stock falling 12% to around £2.65bn (SEK 35.4bn).

Chief executive Daniel Ervér said the results showed the business was moving in the right direction despite a challenging backdrop.

“Through a strengthened customer offering, good cost control and improved inventory productivity, we continue to take important steps towards all our long-term targets in a challenging environment,” he said.

Looking ahead, the retailer expects sales in the period from December 2025 to January 2026 to fall by 2%, reflecting strong Black Friday trading at the end of November, but softer demand in December.

H&M plans to invest between £675m and £750m (SEK 9–10bn) in 2026, largely focused on store upgrades, digital improvements and technology infrastructure, including further logistics investment across Europe.

The group also highlighted progress on sustainability, saying it has reduced Scope 3 greenhouse gas emissions by around 30% compared with its 2019 baseline and remains on track to meet its 2030 climate targets.

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