Savings push pays off for H&M

By the Editorial Team · Friday, September 25, 2026

H&M reported a 1 percent sales increase and a rise in operating profit to 6.04 billion Swedish kronor for the third quarter, driven by cost-cutting and improved operational efficiency despite supply chain challenges. This performance positions the retailer to better navigate inflationary pressures and stiff competition from both low-cost online brands and luxury fashion groups.

Hennes & Mauritz (H&M) reported improved quarterly earnings, reflecting the positive impact of cost-cutting and operational efficiency measures amid ongoing challenges in the retail environment. The Swedish fast-fashion retailer’s third-quarter results, covering June through August, highlighted modest sales growth alongside increased profitability.

For the quarter, H&M’s sales rose by 1 percent in local currencies, slightly exceeding a UBS forecast of 0.7 percent. The company attributed the growth to the favorable reception of its northern summer collections, despite persistent disruptions in European logistics and global supply chains. Sales for September, marking the start of the fourth quarter, were also expected to increase by 1 percent in local currencies compared to the previous year.

H&M has been undertaking a series of strategic adjustments aimed at streamlining its operations and better aligning inventory with customer demand. These include reducing dependence on Asian supply chains to accelerate delivery times, limiting overstock to reduce the need for discounting, and launching new distribution centers in Europe. The retailer is also optimizing its physical store network and investing in digital infrastructure to enhance the customer experience.

Chief Executive Daniel Everseid noted that the company’s inventory composition heading into the autumn season was well balanced to meet customer needs. However, he acknowledged significant challenges stemming from the broader economic environment. Rising energy prices linked to conflict in the Middle East have increased inflationary pressures, tightening consumer spending power. Additionally, H&M faces intense competition from low-cost online platforms such as Shein and Temu, as well as from higher-end rivals like the Zara owner Inditex.

“During a period when consumers are impacted by high living costs, we are gradually reinforcing our customer offering with appealing products, engaging shopping experiences, and strong brands,” Everseid said.

The company reported an operating profit of 6.04 billion Swedish kronor (approximately $866 million) for the quarter, up from 4.91 billion kronor in the same period last year. Reported sales increased modestly by 0.3 percent to 57.19 billion kronor, surpassing analysts' estimates of 5.52 billion kronor in operating profit on sales of 57.09 billion kronor.

Meanwhile, in the luxury sector, France’s Arnault family is moving to simplify the corporate structure controlling LVMH. The holding company Christian Dior is set to be delisted, with Financiere Agache, controlled by Bernard Arnault, assuming direct control of LVMH. Upon completion, this reorganisation will consolidate control of LVMH within a single entity, which will hold 49.76 percent of the share capital and 65.55 percent of the voting rights in the luxury conglomerate.

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