Consumers walk in front of H&M shop in Galeria Krakowska shopping mall in central Krakow, Poland on March 13, 2025. The country keeps its interest rates high as anyway high inflation is expected to rise again which affects the Polish economy. (Photo by Dominika Zarzycka/NurPhoto via Getty Images)
- H&M on Thursday posted weaker-than-expected fiscal first-quarter sales in a slow start to the year for the world's second-largest clothing retailer.
- Sales at the Swedish fashion giant rose 2% in local currencies to 55.33 billion Swedish krona ($5.5 billion), slightly below the 55.86 billion forecast.
- Operating profit totaled 1.2 billion in the first quarter, versus 1.9 billion Swedish krona expected.
H&M on Thursday posted weaker-than-expected sales in the fiscal first quarter in a slow start to the year as depressed demand continues to weigh on the world's second-largest clothing retailer.
Sales at the Swedish fashion giant rose 2% in local currencies to 55.33 billion Swedish krona ($5.5 billion) year-on-year in the three-month period to Feb. 28, slightly below the 55.86 billion forecast by LSEG analysts.
Shares were down 1.6% by 8:08 a.m. London time.
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Operating profit totaled 1.2 billion in the company's first quarter, versus 1.9 billion Swedish krona expected, resulting in an operating margin of 2.2%.
The retailer attributed the weaker operating profit to "negative external factors, increased markdowns and investments in the customer offering," which impacted gross margins.
The company noted, however, that such factors were "estimated to already be significantly smaller in the second quarter," pointing to an anticipated 1% annual uptick in March sales.
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"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," CEO Daniel Ervér said in a statement.
"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," he added.
It follows several consecutive quarters of weak sales for the Swedish fashion giant, which has struggled to close a widening gap with Inditex-owned rival Zara and higher competition from lower-cost retailers such as Chinese-founded fast fashion giant Shein.
The results mark the latest test for CEO Ervér, who was appointed to the role in January 2024 to accelerate the group's turnaround.
This is a breaking news story and will be updated shortly.
