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; operating profit was SEK 5.9 billion with a 10.4% margin.

• Net sales in SEK declined due to a 5–6 percentage point negative currency effect from a stronger krona.

• Portfolio brands, especially COS, outperformed, while Monki consolidated with significant store closures; online sales accounted for over 30% of Q2 sales.

• Women's wear and digital channels showed strong performance, while men's and kids' wear lagged.

• Strategic focus remains on elevating product, upgrading store and digital experiences, and expanding in growth markets like Brazil, El Salvador, and Venezuela.

Financial highlights

• Q2 net sales: SEK 56,714m–59,605m (up 1% in local currencies); gross profit: SEK 31,425m–31,425m; gross margin: 55.4% (sequential improvement from Q1).

• Q2 operating profit: SEK 5,914m (down 17% year-over-year); operating margin: 10.4%.

• Six-month net sales: SEK 112,047m–113,274m (up 1% in local currencies); operating profit: SEK 7,117m (down 22% year-over-year); operating margin: 6.4%.

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

• Cash flow from operating activities: SEK 12,729m (16,567); cash and equivalents: SEK 16,262m (24,246).

Outlook and guidance

• Q3 markdowns as a percentage of sales are expected to rise due to competitive discounting and cautious consumer behavior.

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

• External factors negatively impacting purchasing in H1 are expected to turn positive in H2.

• Net space effect from store closures will become less negative as new, higher-turnover stores open, especially in Brazil.

• Marketing spend is expected to be neutral year-over-year in the second half, with focus on optimizing effectiveness.