August M
H&M has reported stronger profits even as its sales declined, highlighting mixed performance at the start of the year.
Currency pressures and cautious consumer spending weighed on revenue across several regions.
The Swedish fashion group posted a net profit of €67 million for its first fiscal quarter ending in February, a rise of 22.7%, according to elEconomista.es. However, total sales fell 10.3% year-on-year to €4.59 billion, partly due to the strengthening Swedish krona.
Sales under pressure
Revenue declines were seen across most major markets, with the sharpest drops recorded outside Europe.
Sales in Asia and Oceania fell significantly, while the Americas also saw a notable decline. In Europe, performance was mixed, with modest growth in Nordic countries offset by weaker results in western, eastern and southern regions.
The company pointed to currency effects and subdued demand as key factors behind the downturn.
Strategy shifts
H&M said it is monitoring global developments, including tensions affecting trade flows in regions such as the Middle East.
The retailer added that its supply chain flexibility allows it to adjust logistics if conditions change, helping it respond to disruptions.
Store footprint shrinks
The group continued to streamline its physical presence, reducing its global store network by 4% compared to a year earlier.
At the end of the quarter, H&M operated around 4,050 stores worldwide, reflecting a shift in strategy as retail habits evolve.
Profit boosted
Despite weaker sales, improved cost control and stronger margins supported profitability.
CEO Daniel Ervér said: ” Good cost control and an improved gross margin helped strengthen profitability in a quarter marked by prudent consumption and a significant impact from currency conversion,”
He added that while demand was softer at the start of the period, spring collections were better received later on, with momentum continuing into March.
Sources: elEconomista.es
