H&M profits climb despite sales dip

H&M Group has reported net sales of SEK 49.6 billion (£3.9 billion) in the first quarter to 28 February 2026, a decline of 1% year-on-year, though store count was around 4% lower than in the same quarter last year.

Despite the sales dip, operating profit increased by 26% to SEK 1.51 billion (£120.9 million), corresponding to an operating margin of 3%.

Gross profit amounted to SEK 25.138 billion (£2.01 billion), which corresponds to a gross margin of 50.7%. The cost of markdowns decreased somewhat compared with the previous year.

H&M Group CEO, Daniel Ervér, said: “Good cost control and an improved gross margin contributed to strengthened profitability in a quarter characterised by cautious consumption and large currency translation effects.”

H&M Group’s sales in March 2026 are expected to increase by 1% in local currencies compared with the same month the previous year.

Additionally, the company's latest annual sustainability report showed that 32% of the materials used in commercial products in 2025 were recycled, and that the share of recycled or sustainably produced materials was 91%.

Meanwhile, yesterday H&M and Stella McCartney launched an Insights Board to bring together voices from across the industry to ensure that sustainability remains “front and centre”.

The establishment of the Insights Board forms part of a larger collaboration between H&M and sustainability champion and founder of her namesake brand, Stella McCartney, which was first announced in December 2025.

Apart from the board, the two companies are also collaborating on a joint collection, which will launch this spring and will spotlight certified, responsible materials, including recycled fabrics, offering a compelling view of alternatives to traditional textiles.