H&M, the Swedish fashion retail giant, reported third-quarter 2026 operating profit above analyst expectations after pushing ahead with cost controls and improved sourcing and purchasing efficiency, though sales growth remained sluggish amid fierce competition from Shein and Inditex, the owner of Zara. Operating profit in Q3 2026, covering the period from 1 June to 31 August 2026, rose to 6.04 billion Swedish kronor from 4.91 billion kronor in the same period a year earlier, and beat the analyst average estimate of 5.14 billion kronor. The gross margin rose to 54.0% from 52.9% a year earlier, partly helped by customs duty refunds, compared with analysts' forecast of 53.4%. However, sales have yet to show a clear recovery, with H&M expecting September sales to rise only 1% in local currencies, the same pace as in the June-to-August period. H&M shares opened down 2%. Since Daniel Ervér took over as chief executive in January 2024, H&M's profitability has steadily improved, with the company restructuring its purchasing and increasing the share of clothing bought in-season to respond faster to shifting fashion trends and weather. But inventories in the quarter rose 9% after adjusting for currency effects, which the company attributed to global supply chain bottlenecks. H&M is also stepping up logistics investment to support growing online sales, preparing to gradually bring new European warehouses into operation from this year through next year to boost distribution capacity and make goods more readily available. Meanwhile, the heir of H&M's founder has been gradually raising his stake, fueling speculation that a buyout to take the company private could be on the cards.
H & M Hennes & Mauritz AB (publ)Q3 operating profit rose to 6.04bn kronor, beating the 5.14bn estimate, with gross margin up to 54.0%.
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SHEIN Global Holdings Limited