Press release

H & M Hennes & Mauritz AB Three-month report 2025

27 March, 2025

First quarter (1 December 2024 – 28 February 2025)

• The H&M group’s net sales in the first quarter increased by 3 percent to SEK 55,333 m (53,669). In local currencies net sales increased by 2 percent with around 3 percent fewer stores compared with the previous year.
• Gross profit amounted to SEK 27,169 m (27,655). This corresponds to a gross margin of 49.1 percent (51.5). The gross margin for the quarter was affected by negative external factors, increased markdowns and investments in the customer offering. The Swedish krona strengthened in the first quarter, with the result that currency remeasurement effects have also negatively affected the gross margin compared with the previous year.
• Selling and administrative expenses amounted to SEK 25,938 m (25,564). In local currencies these expenses were on par with the previous year.
• Operating profit amounted to SEK 1,203 m (2,077), corresponding to an operating margin of 2.2 percent (3.9). The decrease in operating profit is attributable to the lower gross margin.
• The result after tax amounted to SEK 579 m (1,231¹).
• The stock-in-trade amounted to SEK 41,008 m (37,630), an increase by 9 percent. Currency adjusted the stock-in-trade increased by 11 percent compared with the previous year. Higher purchasing costs reflected in the weaker gross margin in the first quarter explain the majority of the increase in stock-in-trade. In addition, extended transport times associated with the situation in the Red Sea continued to affect inventory. The composition of the stock-in-trade is assessed to be good.
• Cash flow from operating activities increased to SEK 4,201 m (3,967). Cash and cash equivalents plus undrawn credit facilities were SEK 34,470 m (38,710). 
    
• The H&M group’s sales in the month of March 2025 are expected to increase by 1 percent in local currencies compared with the same month the previous year.
• The overall negative effect from external factors, increased markdowns and investments in the customer offering is estimated to already be significantly smaller in the second quarter than in the first quarter, while collaboration with strategic suppliers is being deepened and bringing additional positive effects. At present the conditions are in place for these to have a positive overall effect in the second half of the year compared with the previous year, with the customer offering being strengthened at the same time.
• The H&M group is included in the Carbon Disclosure Project’s A List for its leadership within transparency and climate impact.
• Today the H&M group publishes its annual and sustainability report 2024. Among other things, the report shows that the greenhouse gas emissions in scope 3² reduced by around 24 percent in 2024 compared to the 2019 baseline.
• The annual general meeting will be held on 7 May 2025 to resolve, among other things, on the board’s proposed dividend of SEK 6.80 per share, to be paid in two instalments, and on a general authorisation allowing the board to buy back the group’s own B shares in the period up to the 2026 annual general meeting.

“Sales increased by 3 percent in SEK in the first quarter, with well-received women’s collections. Operating profit and profitability were impacted by temporarily challenging development of the gross margin. Our main priorities are a strengthened product offering, a more inspiring shopping experience and a stronger brand. Through this we create the conditions for long-term, profitable and sustainable growth”, Daniel Ervér, CEO.
 
1.    See note 5.
2.    Scope 3 excludes the use of sold products.
 

Comments by Daniel Ervér, CEO
 
Sales in the first quarter increased by 3 percent in SEK  and by 2 percent in local currencies. Sales development  was good in western, southern and eastern Europe, with positive development in Germany and Poland. Online sales continued to develop well, which shows that customers appreciate our upgraded digital store. We are continuing to optimise the store portfolio by closing select stores. We went into the quarter with nearly 120 fewer stores compared to the same time last year and we had 40 net store closures during the period.

Profitability in the quarter was negatively impacted by a weaker gross margin, which in turn was affected by negative external factors, increased markdowns and investments in the customer offering. We estimate that the overall negative effect of these will already be significantly smaller in the second quarter than in the first quarter.

Although we have made important progress in our plan and have good cost control, our sales and earnings in the quarter were somewhat weaker than planned – but the first quarter is the smallest quarter of the year for us in terms of sales and margin, and we are confident going forward. 

We can see that the improvements we have made, especially in the women’s assortment, are starting to have a positive effect. Here we have simplified the organisation and become faster at adapting to new trends and creating a more relevant assortment. During the year we are implementing similar improvements for all our customer groups. 

Through our omni-model we are continuing to integrate the physical and digital sales channels, making it easier for our customers to find what they are looking for. The upgraded digital store was rolled out to more markets in the quarter and has been well received by our customers. Upgrades to our physical stores continues to be given high priority. In addition to rebuilds of key stores in several major cities, we are expanding customer experience upgrades to more stores in more markets during the year. 

We have a stable financial position that gives us the flexibility to prioritise what creates the most value for our customers. With macroeconomic and geopolitical uncertainty, it is important that we continue to focus fully on our plan and offer the best combination of fashion, quality, price and sustainability for everyone. We are therefore further strengthening our customer offering through an upgraded product offering, a more inspiring shopping experience and a stronger brand. This creates the conditions for long-term profitable and sustainable growth, with the H&M brand and organic growth in focus.

 
Communication in conjunction with the three-month report
 
The three-month report, i.e., 1 December 2024 – 28 February 2025, will be published at 08:00 CET on 27 March 2025, followed by a telephone conference at 09:00 CET for the financial market and media. The telephone conference will be held in English, hosted by CEO Daniel Ervér, CFO Adam Karlsson and Head of IR Joseph Ahlberg.

For log in details for the telephone conference please register via this link:
https://app.webinar.net/48NWzdRkxoq
 
To book interviews for media in conjunction with the three-month report on 27 March 2025, please contact: Anna Frosch Nordin, Head of Media Relations, telephone +46 73 432 93 14, anna.froschnordin@hm.com.

Contact

 
H & M Hennes & Mauritz AB (publ)
SE-106 38 Stockholm 
Phone: +46 8 796 55 00, e-mail: info@hm.com 
Registered office: Stockholm, Reg. No. 556042-7220

For more information about the H&M group visit hmgroup.com.

 
Information in this interim report is that which H & M Hennes & Mauritz AB (publ) is required to disclose under the EU Market Abuse Regulation (EU) No 596/2014. The information was submitted for publication by the abovementioned persons at 08:00 (CET) on 27 March 2025. This interim report and other information about the H&M group are available at hmgroup.com.

 
H & M HENNES & MAURITZ AB (PUBL) was founded in Sweden in 1947 and is listed on Nasdaq Stockholm. H&M’s business idea is to offer fashion and quality at the best price in a sustainable way. In addition to H&M, the group includes the brands COS, Cheap Monday, Weekday, Monki, H&M HOME, & Other Stories, ARKET, Singular Society and Sellpy. The group also includes several ventures. For further information, visit hmgroup.com.