Swedish fashion retailer H&M has reported a notable increase in operating profit for the third quarter of the year (Q3 2025), attributing this success to an expanded product range, improvement in gross margin, and effective cost management.
For the quarter ending on August 31, 2025, H&M’s operating profit surged by 40%, climbing to SEK 4.91 billion, compared to SEK 3.51 billion in the same quarter last year. The company’s operating margin now stands at 8.6%.
H&M’s CEO Daniel Ervér stated: “Through a stronger customer offering, an improved gross margin, and good cost control, we have strengthened operating profit compared with the same quarter last year. The increase in profit shows that we are on the right track as a result of the progress we have made in our plan.”
He also highlighted the successful launch of H&M in Brazil in August, stating, “With the H&M brand’s global strength and a locally relevant customer offering, we have taken an important step into a large fashion market. We see good potential to grow both in Brazil and elsewhere in Latin America.”
Overall Performance in Q3
In the third quarter, H&M’s adjusted sales saw a rise of 2% when considering currency adjustments. However, the company experienced a 4% decline in the total number of stores compared to the same period a year prior. The gross profit remained steady at SEK 30.14 billion, leading to an increase in gross margin to 52.9%, up from 51.1%.
Performance Over Nine Months
During the first three quarters, H&M demonstrated consistent performance with a 2% increase in net sales in local currencies. The gross profit for this period reached SEK 88.74 billion, yielding a gross margin of 52.5%.
For the nine-month period, the operating profit totaled SEK 12.03 billion, reflecting an operating margin of 7.1%. The company expects September 2025 sales to be in line with those from the prior year.
Daniel Ervér emphasized, “In an environment of ongoing uncertainty with cautious consumers, all of us within the H&M group are consistently focusing on our customer offering—always giving the best value for money. Our strong culture, together with good cost control and flexibility, allows us to continue building a stable foundation for long-term, profitable, and sustainable growth in an increasingly complex environment, while taking additional important steps towards our ambitious sustainability goals.”
