Hennes & Mauritz (HM) Q2 2026 earnings summary

Executive summary

• Q2 operating margin rose to 12% (up from 10.4%) before one-off restructuring costs, with a rolling 12-month operating margin of 8.5% (up from 6.5%).

• Net sales were flat year-over-year in local currencies for Q2, with a 3% reduction in store count due to ongoing store optimization.

• Gross margin improved to 56.6% in Q2, and inventory productivity increased with stock-in-trade at 15.8% of sales.

• Online sales grew, while store channel performance was mixed; customer offer elevated through store upgrades, digital investments, and collaborations.

• SEK 679 million in one-off restructuring costs impacted results, including layoffs and organizational changes.

Financial highlights

• Gross margin rose by 120 basis points to 56.6% in Q2; rolling 12-month gross margin reached 54.1%-56.6%.

• SG&A before restructuring costs decreased by 2% in local currencies in Q2.

• Operating profit before restructuring costs increased by 14% in Q2.

• Inventory as a percentage of sales improved to 15.8% from 16.6% year-over-year.

• Return on capital employed increased to 17.4% over three years; EPS up more than 260%.

Outlook and guidance

• Gross margin expected to remain within the normalized 54%-55% range, with external factors neutral for Q3 but some transport cost pressure.

• SG&A costs targeted to grow at a low single-digit rate for the full year, including tech infrastructure investments.

• Cost of markdowns as a share of sales expected to remain similar to last year.

• Store portfolio optimization to have a slightly positive sales effect for full-year 2026.

• Continued investment in digital infrastructure and omnichannel expansion.