Hennes & Mauritz (HM) Q2 2025 earnings summary

Executive summary

• Q2 2025 sales increased by 1% in local currencies, or 3% excluding store closures, despite a 4% reduction in store count year-over-year; operating profit was SEK 5.9 billion.

• Operating margin for Q2 was 10.4%, with sequential improvement supported by gross margin gains.

• Portfolio brands, especially COS, outperformed, while Monki continued consolidating with significant store closures.

• Women's wear and digital channels showed strong performance; men's and kids' wear lagged but are a focus for improvement.

• Strategic initiatives include elevating product offerings, upgrading store and digital experiences, and expanding into new markets such as Brazil, El Salvador, and Venezuela.

Financial highlights

• Q2 net sales were SEK 56,714m (59,605), up 1% in local currencies but down in SEK due to currency effects; six-month net sales were SEK 112,047m (113,274), down 1% year-over-year.

• Q2 gross profit was SEK 31,425m (33,569), with a gross margin of 55.4% (56.3%).

• Q2 operating profit was SEK 5,914m (7,098), with a margin of 10.4% (11.9%); six-month operating profit was SEK 7,117m (9,175), margin 6.4% (8.1%).

• Inventory growth slowed to 1% in Q2 from 11% in Q1, with stock levels lower than last year and improved composition.

• Q2 net income was SEK 3,962m (5,064); EPS SEK 2.48 (3.15).

Outlook and guidance

• June 2025 sales are expected to increase 3% in local currencies year-over-year, with a negative calendar effect of ~1%.

• Q3 markdowns as a percentage of sales are expected to increase due to heightened competitive pressure and price sensitivity.

• Average selling prices are predicted to be slightly up for the year, driven by elevated product offerings.

• Store portfolio optimization will continue, with closures of underperforming stores and openings in high-potential markets.

• Focus remains on cost control, product offering, and omnichannel integration to drive profitable growth.