Building a foundation for continued profitable and sustainable growth

In 2024, we focused on what matters most to our customers. This simple principle guided our decisions throughout the year, sharpening our focus on our core business, with the H&M brand as our top priority. H&M continued to strengthen in three key areas: elevated products, a more inspiring shopping experience, and stronger brand building.

Elevated product offering

With creativity at heart, we want to inspire our customers to dress according to their personal style through our products and collections. We have invested in design, craftsmanship, product quality and price. We have become even faster at responding to trends, accelerated decision making, increased supply chain flexibility, expanded our nearshoring capacity and tightened the teamwork with our suppliers.

As a result, especially our women’s fashion has been well received, highlighted by the launch of H&M’s A/W collection. In 2025, we will build on this foundation and elevate our ambitions for all customer groups.

Inspiring shopping experiences

In our omni model, we continue to integrate our physical and digital sales channels that collaborate and strengthen each other. By improving our product availability and expanding the use of RFID technology (Radio Frequency Identification) for inventory management, we ensure that the right products are available at the right time in the right channel so that the customer offering is always the most relevant.

During 2024, we started an extensive upgrade of our shopping experience, both online and in store. In physical stores, we have created modern, engaging environments, with rebuilds in key fashion capitals like London, New York, Tokyo, Seoul, Paris, Berlin and Stockholm. We are also rolling out upgrades at speed and scale to enhance customer experience in a significant share of our remaining stores. Improvements include better layouts, added tech functionality, improved product presentation and greater product availability.

Online sales developed very well during 2024. We made shopping more intuitive and convenient, with better fit, size and product recommendations, along with a simplified search function. We also introduced a new, more inspirational online shopping experience in several markets.

Strengthened brand building

We continue to strengthen the H&M brand, shaping meaningful experiences and branding moments with creativity, curiosity and imagination at the core.

We have evolved our brand building by connecting more effectively with our customers where they spend their time – strengthening our digital presence and reach. Through collaborations with creators and with more relevant and inspiring content, we are building stronger customer relationships with increased engagement.

H&M Lifestyle brands

H&M’s extended product range for home, sport and beauty is performing well. Our focus on H&M lifestyle brands has paid off – H&M Home, H&M Move, and H&M Beauty all show strong potential to grow in these expanding global categories. We are especially pleased with the positive customer feedback on our H&M Move sports range, particularly regarding its improved quality and functionality.

Portfolio brands and ventures

To make fashion accessible to more people and drive long-term profitable growth, we have a portfolio of brands and ventures like COS, Weekday, & Other Stories, ARKET and Sellpy. Our brands reach diverse customer groups with their own unique offers, while our ventures create additional long-term growth, contribute to sustainable development and generate new learning.

Both COS and ARKET developed positively, and our majority-owned venture, Sellpy, continued to grow at a high pace. Today Sellpy is one of Europe’s largest second-hand platforms for fashion, available in 24 markets.

While our focus remains on organic growth for the H&M brand, we have during recent years also invested in approximately 30 ventures to drive future growth. These investments complement our customer offering and include new business models, direct-to-consumer brands and new recycled materials.

As we prioritise initiatives that drive sales and profitability, while streamlining efforts that do not add value, we have decided to discontinue the brand Afound. During 2025, we will also integrate the Monki brand into Weekday, both in stores and online.

Integrated sustainability

Sustainability is a key priority. It is fundamental to how we operate and essential for long-term success.
We have identified four areas where we have the greatest potential: Decarbonising our supply chain, shifting towards recycled or sustainably sourced materials, optimising production to match demand and scaling circular business models to keep materials in use and extend product life.

In 2024 we integrated sustainability even further into our business, for example in our design and product development processes. We also made targeted investments to decarbonise our supply chain. In 2024, our scope 3 greenhouse gas emissions decreased by 24 percent compared to our 2019 baseline. This sets us up well to reach our long-term goal of reducing greenhouse gas emissions by 56 percent by 2030. Currently, 85 percent of the materials we use are recycled or sustainably sourced, and we aim to make that 100 percent by 2030. Our efforts have been recognised by global rankings, such as Stand.earth and the Dow Jones Sustainability Index, as well as being recognized as one of the leaders in the business by the Textile Exchange. We have yet again been included in CDP’s A list for our work to reduce emissions, mitigate climate risk and contribute to the transition to a fossil-free economy.

Outlook

With our business idea – fashion and quality at the best price in a sustainable way – we are well positioned for growth in the global fashion market. As living costs rise, consumers also increasingly prioritise best value for money when making their purchases.

We will continue strengthening our business to navigate a rapidly changing world marked by challenging macroeconomic conditions and geopolitical uncertainty. Our flexible supply chain helps us build resilience and mitigate negative external impact in different markets.

We have a strong foundation and clear path forward. Our top priority remains the H&M brand and organic growth, which are essential for our future success. Most importantly, we have extraordinary teams around the world, whose dedication I see every day in our stores, warehouses and offices. The increase in full-year profits means we can allocate a further SEK 236 million to the H&M Incentive Program for all H&M Group employees.

Thanks to the commitment and contribution from our teams and a strong plan, I am optimistic about our potential. We will take significant steps forward in 2025 and keep working to build the foundation for continued profitable and sustainable growth.

CEO H&M Group