H&M Profit Tops Estimates as Sales Lag, Shares Jump 8%

Hennes & Mauritz reported fiscal second-quarter revenue of SEK 56.7 billion, falling short of the SEK 57 billion consensus after shoppers curbed discretionary spending. Measured in local currencies, sales ticked up 1%. Operating profit came in at SEK 5.91 billion, narrowly beating analyst expectations and helped by demand for women’s fashion and sportswear, as well as continued cost controls. Chief Executive Daniel Ervér said consumers remain cautious and the company is monitoring trade restrictions, including U.S. tariffs that have made pricing “turbulent.” Despite the subdued top line, Ervér forecast a 3% rise in June sales, citing an anticipated summer pickup. First-half net income nonetheless fell 27.7% to SEK 4.57 billion as higher purchasing and freight costs weighed on margins. Investors focused on the profit beat and the tentative sales rebound: H&M shares rose about 8% in early Stockholm trading. The world’s second-largest listed fashion retailer has 4% fewer stores than a year earlier and continues to face stiff competition from Inditex’s Zara as well as online rivals Shein and Temu while it works to diversify price points and revive growth.