H&M boosts annual profit despite sales decline

Swedish apparel group Hennes & Mauritz AB experienced a slight decline in sales for the 2024/25 fiscal year. This was primarily due to adverse market conditions and negative currency effects. However, the company improved its profit thanks to successful cost-saving measures. This was revealed in the latest annual report, which the parent company of brands such as H&M, Cos, Weekday, & Other Stories and Arket presented on Thursday.

According to the report, group sales for the fiscal year ending in November amounted to 228.3 billion Swedish kronor (25.91 billion dollars). This represented a 3 percent decrease compared to the previous year. In local currencies, however, revenue grew by 2 percent.

Negative currency effects impact sales development

Negative currency effects, resulting from the appreciation of the Swedish krona, impacted sales development across all international markets. Revenue in Western Europe remained at approximately the previous year's level. In contrast, sales declined in the Nordic countries (down 2 percent); Eastern Europe (down 1 percent); Southern Europe (down 1 percent); North and South America (down 5 percent); and Asia, Oceania and Africa (down 7 percent).

The group increased its operating profit by 6 percent to 18.4 billion Swedish kronor, thanks to a stable gross margin and cost reductions. Net profit attributable to shareholders rose by five percent to 12.2 billion Swedish kronor.

CEO Daniel Ervér emphasised that the group made “positive progress towards its long-term goals” during the past fiscal year, despite challenging market conditions. “The sales trend was positive over the course of the year, and profits strengthened in the second half,” he explained in a statement.

Group to continue investing in technical infrastructure

He also provided an overview of the strategic priorities. “We are expanding through our stores and digital channels, particularly in growth markets including Brazil and other parts of Latin America,” Ervér stressed. The store portfolio is also being continuously optimised.

“For 2026, we expect the impact of store optimisation on sales to be slightly positive,” the CEO explained. “In addition to our investments in new markets, new stores and an improved customer experience in many of our existing stores, we are also investing in technical infrastructure.” The group is planning, among other things, “the increased use of AI”.

The start to the new fiscal year has been subdued. The company announced that from December 1 to January 31, sales were 2 percent below the corresponding prior-year level in local currencies. Reasons for the decline include strong sales during Black Friday week at the end of November, which led to lower demand in December. Another factor is that the Chinese New Year falls in February this year.

This article was translated to English using an AI tool.

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