Swedish retailer H&M Hennes & Mauritz AB maintained its operating profit in the second quarter of fiscal year 2026 at nearly the same level as last year, despite a decline in sales in Swedish kronor, an improvement in gross margin, and a reduction in inventory.
According to the company’s report, H&M’s net sales for March–May totaled SEK54.828 billion, compared to SEK56.714 billion for the same period last year. In local currencies, sales were nearly at last year’s level, while in Swedish kronor, the figure was negatively impacted by the krona’s appreciation.
Gross profit in the second quarter was SEK31.045 billion, compared to SEK31.425 billion a year earlier, and the gross margin rose to 56.6% from 55.4%. The company attributed the margin improvement primarily to efforts to improve supply chain efficiency.
Operating profit, excluding one-time expenses, rose by 11% to SEK6.592 billion, and the corresponding operating margin increased to 12% from 10.4%. At the same time, operating profit including expenses amounted to SEK5.913 billion compared to SEK5.914 billion a year earlier, with an operating margin of 10.8% compared to 10.4%.
One-time restructuring costs for the quarter totaled SEK679 million and were related to organizational changes in the company’s sales markets and central commercial structures.
H&M’s net profit in the second quarter was SEK3.963 billion, compared to SEK3.962 billion a year earlier, with earnings per share of SEK2.49, compared to SEK2.48.
For the first half of fiscal year 2026, the group’s net sales declined to SEK104.435 billion from SEK112.047 billion; in local currencies, the decline was 1%. Operating profit for the first half of the year rose to SEK7.425 billion from SEK7.117 billion, while the operating margin increased to 7.1% from 6.4%. Net profit rose to SEK4.667 billion from SEK4.541 billion.
Cash flow from operating activities rose 24% in the second quarter to SEK10.591 billion and 15% for the first half of the year to SEK14.616 billion.
Inventory as of the end of May decreased by 10% to SEK34.942 billion from SEK38.817 billion a year earlier. In currency-adjusted terms, inventory decreased by 2%. The inventory-to-sales ratio for the past 12 months fell to 15.8% from 16.6%.
“Our long-term efforts have strengthened profitability and give us good opportunities to create even more value for our customers,” said H&M CEO Daniel Erver.
According to him, sales for the quarter were slightly below target, but profitability and the inventory situation developed positively. The company continues to streamline its organization, bring decision-making closer to the customer, and will begin upgrading its digital infrastructure in the second half of the year.
As of May 31, 2026, the H&M Group had 4,038 stores, compared to 4,166 a year earlier. In the first half of the year, the company opened 41 stores and closed 104. Online sales account for more than 30%.
In 2026, H&M plans to open about 90 new stores and close about 170. The company continues its expansion in Latin America: its first store in Rio de Janeiro opened in April; in the second half of 2026, H&M plans to enter the Paraguayan market, and in 2027, the Argentine market through a franchise.
H&M Group’s sales in local currencies in June 2026 are expected to be on par with the same month last year.
H&M Group is one of the world’s largest fashion retailers. The group includes the brands H&M, COS, Weekday, & Other Stories, ARKET, H&M HOME, and Sellpy.
The full version of the report is available at this link.
