The gross profit reached SEK 25,138 million (~$2.39 billion), with the gross margin improving to 50.7 per cent from 49.1 per cent a year earlier, supported by lower markdown costs and more efficient sourcing.
H&M has reported net sales of SEK 49,607 million (~$4.72 billion) in Q1 FY26, with sales down 1 per cent in local currencies.
Improved cost control lifted gross margin to 50.7 per cent and operating profit rose 26 per cent.
The net profit increased to SEK 704 million (~$75.05 million), while inventory fell 16 per cent.
Currency effects weighed on revenue despite stronger margins and improving sales.
The operating profit rose by 26 per cent to SEK 1,512 million, lifting the operating margin to 3 per cent from 2.2 per cent. Selling and administrative expenses declined by 1 per cent in local currencies and by 9 per cent in SEK terms, reflecting continued cost discipline, H&M said in a press release.
The net profit after tax (PAT) increased to SEK 704 million (~$75.05 million), with earnings per share (EPS) improving to SEK 0.45 from SEK 0.37. Inventory management also showed progress, with stock-in-trade falling 16 per cent to SEK 34,608 million, indicating improved inventory productivity.
However, sales in SEK terms were impacted by a currency translation effect of just over 9 percentage points due to the strengthened Swedish krona. The quarter began with weaker demand following strong Black Friday trading, though sales trends improved towards the end, supported by spring collections.
“Good cost control and improved gross margin contributed to strengthened profitability in a quarter marked by cautious consumption and large currency translation effects,” said Daniel Erver, CEO at H&M.
Looking ahead, H&M expects March 2026 sales to rise by 1 per cent in local currencies. The company also highlighted its sustainability progress, noting that 32 per cent of materials used in 2025 were recycled, while 91 per cent were either recycled or sustainably sourced.
Fibre2Fashion News Desk (SG)
