Hennes & Mauritz AB reported first-quarter sales that fell short of analyst expectations, with net sales in local currencies sliding 1% to 49.6 billion kronor ($5.3 billion), against a forecast of 50.46 billion kronor. This occurred during a period characterized by weak consumption and significant currency effects. The company’s net sales in Swedish kronor were particularly affected by a currency translation effect of over 9 percentage points due to the strengthened krona.
Despite the sales miss, H&M managed to surpass operating profit estimates, achieving 1.51 billion kronor ($162 million), a 26% increase year-on-year, compared to an LSEG analyst mean forecast of 1.39 billion kronor. This marks the third consecutive quarter of rising profits, attributed to tight cost controls and an improved gross margin of 50.7%. The operating margin for the quarter was 3.0%.
H&M's CEO, Daniel Ervér, stated that challenging conditions persisted into the first quarter, with cautious consumer spending. However, the company noted that well-received spring collections contributed to a positive sales trend towards the end of the quarter and continuing into March. March sales are expected to increase by 1% in local currencies compared to the same month last year.
Analysts, including Jie Zhang from Alphavalue, found the 1% March sales forecast somewhat disappointing despite positive reception of the spring collection. Lucas Mattsson of Inderes expressed caution, not expecting strong sales growth in 2026, citing a lack of clear trends. H&M also warned that a prolonged Middle East war could significantly impact consumer spending, though current impacts on their operations are limited due to minimal sales exposure in the region and transportation by sea and land.
