Word from CEO

Our starting point is always our business idea: fashion and quality at the best price in a sustainable way. Fashion is more than clothing – it’s a way of expressing your personality – and our ambition is to make this possible for everyone. In 2025 we further raised the level of our products, elevated the shopping experience and strengthened our brands to offer even more value for money.

Putting the product front and centre

The product is our top priority. During the year we enhanced our creativity and at the same time streamlined our design and purchasing work by shortening decision paths, improving our ability to analyse trends and speeding up our supply chain.

We have also developed closer partnerships with our suppliers, who share our view of quality and sustainability. Altogether this has helped create a more relevant assortment and has progressively improved inventory efficiency.

Upgrading the shopping experience

Our omni-model creates a seamless shopping experience. It allows customers to move easily between our channels and meet us where, when and how it suits them. Digitally we have taken important steps forward. In 2025 we launched our upgraded digital store globally. It provides more space for inspiration and a product presentation with improved product pages, recommendations and search functions. This has made the experience more intuitive and personal, and contributed to profitable growth.

Upgrading our physical stores is just as important. During the year we continued to upgrade stores by investing in rebuilds. We are continuing this work in 2026 by updating a large part of the stores with improvements in layout, presentation and tech to further strengthen the customer experience and the interaction between our channels.

Relevant brands

During the year both H&M and COS presented their main collections for autumn and winter at the fashion weeks in London and New York respectively. There was a strong response, including on social media – confirming the relevance of our collections and the strength of our brands.

Another example of brand building was H&M’s expansion into Brazil. The customer response was very positive, and there was an evident sense of pride among our colleagues. This shows the power of our upgraded offering and our responsiveness to the local market.

COS continued at the same time to enhance its position in the accessible luxury category. Its global brand journey was confirmed in 2025 by repeated top positions in the Lyst Index¹, which ranks COS as one of the world’s most sought-after brands – underlining the strength of its offering.

Bringing business and sustainability together

Integrating our sustainability efforts into the business is the key to reducing emissions in line with our plan and the 1.5°C target. During the year we further reduced our emissions in Scope 3² and are well on the way to our longterm target of an absolute reduction of 56 percent by 2030. Our efforts have attracted external attention, and we are seen as one of the leading players in our industry. During the year we were ranked number one of 200 companies in Fashion Revolution’s What Fuels Fashion report, topped Stand.earth’s Fossil-Free Fashion Scorecard for the second consecutive year and were A-listed by CDP for our climate and water efforts.

What we are particularly proud of is that many of the effects we have achieved have been driven by smarter ways of working in our value chain, rather than by large investments. We work with fewer suppliers and build long- term partnerships with them. By offering more stable volumes and better planning, we create the conditions for our partners to invest in renewable energy and more energy-efficient processes. It is this partnership that makes a difference. When business and sustainability develop together, we can reduce emissions at scale and show that fashion can be both affordable and have a lower climate impact.

The power of our culture

Our greatest assets are our employees and our shared values. The passion I encounter in stores, warehouses and offices around the world – the desire to succeed and the drive to always improve – is one of our most fundamental strengths. To improve things further, during the year we took important steps in our ongoing work to simplify the organisation, removing layers for shorter decision paths and creating simpler structures.

Focus going forward

Despite uncertainty in the world around us, over the past year we have moved closer to our long-term targets. At the same time, we humbly acknowledge that in the coming year there is much more to do.

2026 will be about building on the momentum we have created. We will continue our work to improve the product, the experience and brand building. We will continue to prioritise what is most important to our customers: a more relevant assortment that gives them the best value for money, and a seamless and inspiring shopping experience in all channels.

With an increasingly strong foundation, a plan that works and thanks to our employees’ commitment, we are well prepared to continue to deliver profitable growth, reduce our climate emissions and continue to develop an offering that exceeds our customers’ expectations.

CEO H&M Group