H&M Sales Dip 2% in First Nine Months, But Third Quarter Shows Signs of Recovery

H&M, closer to optimization. The Swedish retail giant, number two in the world, has closed the first nine months of the year accelerating the decline in sales dragging throughout the year, and a net result down. The company, immersed in a plan to restructure its commercial park, has assessed the business development in the last quarter as positive, in which despite maintaining sales also down, has managed to multiply its profits.

In the first nine months of the year (period from December to August), the group has recorded sales of 169 billion Swedish kronor ($18 billion), 1.8% less than in the same period last year, and above the fall already recorded in the middle of the year. H&M’s profit for the period fell further to 7,753 million kronors ($826.2 million), down 9.8%.

The Swedish company’s gross profit, meanwhile, fell by 2.8% to 88,737 million kronors ($9,456 million) and a gross margin of 52.5%, half a percentage point less than the previous year. The drop was also sharper for operating profit, down 5.1% to 12,031 million kronor ($1.28 billion), and an operating margin of 7.1%, down from 7.4% a year ago.

H&M has reduced sales and profit in the first nine months of the year

By markets, the worst performance was recorded by H&M in Asia, Oceania and Africa, where the group posted sales of 20,696 million kronor ($2.20 billion) in the first nine months, down 6% year-on-year. It was followed by the Americas, where sales fell by a further 4% to 38,857 million kronor (3,520 million euros).

The Swedish company’s sales in the Nordic region also fell by 3% and in Eastern Europe by a further 2%. In both regions H&M posted sales of 15,014 million kronor (1,360 million euros) and 15,251 million kronor (1,381 million euros), respectively. Sales were flat in Western Europe, H&M’s largest market by revenue, at 57,762 million kronor (5,233 million euros), and in the south of the continent, at another 37,307 million kronor ($4.14 billion).

Despite the fact that the group’s results remain down, the company has welcomed the first positive signs resulting from the optimization plan being implemented by H&M. “The combination of good cost control and flexibility does not allow us to continue to build a stable foundation for long-term sustainable growth,“ said group CEO Daniel Ervér.

The Swedish giant will enter Paraguay and Malta in 2026, while Cos will enter India later this year

Looking ahead to results for the third quarter alone, in fact, the Swedish group’s business performance has been somewhat more positive. At the end of the period from June to August, H&M’s sales stood at 57,017 million kronor ($6,07 billion), 3.4% less than in the same period last year. The giant’s profit, however, has recovered to score a rise of almost 40%, which has translated into profits of 3,212 million kronor ($342 million).

Much of the Swedish retail giant’s optimization plan is based on closing unprofitable stores, which has meant that, at the end of the first nine months, H&M operates 135 fewer stores than a year ago. The region with the most closures is Asia, Oceania and Africa (78 stores down), followed by Eastern Europe (21 stores down), and Southern Europe and the Nordic countries (14 stores down each).

Part of the group’s restructuring has also reached Spain, where the group has been closing stores over the past year. In addition, H&M recently sold the company that managed its customer service center to the U.S. multinational Concentrix. The operation involved the outsourcing of these services from the subsidiary Hennes & Mauritz Services SL, which has been renamed CNXC Customer Experience Spain SL, and the appointment of new joint administrators.

Although the number of stores has been declining in net terms, the group has carried out some openings during the period, including its first store in Brazil, which will be followed by another six openings, two in the remainder of the year and another four in 2026. H&M has also landed in Venezuela and El Salvador, and plans for the coming year include arriving in Paraguay and Malta, in the latter case through a franchise model. In October of this year, Arket will be available on the Zalando platform and Cos will open its first store in India.