H&M profits fall as stores close and boss weighs 'uncertain times'

Daily Mail​

3 days ago

H&M Group has unveiled a sharp fall in operating profits after the retailer closed stores and suffered the impact of currency fluctuations and high freight costs.
The world's second-largest listed fashion retailer saw operating profits slump 22 per cent for the six months to SEK 7.1billion, or £548million, in the six months to 1 May.
It credited the drop to a lower gross margin driven by 'negative external factors such as a more expensive US dollar and high freight costs, but also by markdowns and the company's investments in the customer offering'.
H&N also finished the second quarter with 4 per cent fewer shops worldwide than it had at the same point a year ago.
At the beginning of the second quarter, the business had 125 fewer stores than at the same time a year earlier, with net store closures coming in at 47.
Across all its locations, it had 4,166 shops on 31 May 2025, against 4,319 a year ago.
Update: H&M Group flagged store closures and lower operating profits in its latest half-year update
During the first six months of the current financial year, 24 new stores opened and 111 shops closed, H&M Group said.
The group, which operates H&M and brands like Cos and & Other Stories, said there were 3,706 H&M stores open globally on 31 May 2025, compared to 3,832 the previous year.
H&M eyes improvement
The world's second-largest listed fashion retailer said it expected sales in June, measured in local currencies, to rise 3 per cent, representing an improvement after a 6 per cent fall a year ago in the same period.
H&M also said it was ploughing on with plans to open new shops and an online shopping website in Brazil later this year. The group said it would benefit from Brazil's population of around 200million people.
Chief executive, Daniel Ervér, said: 'Our plan, with its focus on the product offering, the shopping experience and brand, is again confirmed by the progress we see.
'The positive development in important areas such as online, H&M womenswear and H&M Move, as well as continued focus on good cost control, will contribute to a profitable sales development.
'In uncertain times with cautious consumers we monitor macroeconomic and geopolitical developments closely and continuously adapt both the customer offering and the business to meet our customers' needs in the best way.
In November, H&M confirmed it would be closing its call centre in Edinburgh, Scotland, with 150 jobs lost. H&M blamed increased competition, changing customer behaviours and operational costs for the closure.
The Swedish-based business announced during the Covid-19 pandemic that it planned to close 250 shops globally.
This year, the group closed all its Monki stores across Britain.
British retailers face a barrage of higher costs as a result of changes to employer national insurance contributions and the national minimum wage announced in the Autumn Budget by Rachel Reeves last year.