STOCKHOLM (dpa-AFX) - Swedish clothing retailer Hennes & Mauritz AB, or H&M Group (HNNMY.PK, HMRZF.PK, HEN.L, HM-B.ST) reported Thursday an increase in third-quarter net profit driven by improved operating margins and tariff-related benefits, with slightly higher net sales.
Looking ahead, H&M Group said it expects September 2026 sales to increase by 1% in local currencies year-over-year. The retailer anticipates markdown costs as a percentage of sales in the fourth quarter of 2026 will rise somewhat compared with the corresponding quarter in the previous year.
In the third quarter, net profit attributable to shareholders reached 4.123 billion Swedish kronor, compared with 3.229 billion kronor in the year-ago quarter. Earnings per share climbed to 2.58 kronor from 2.01 kronor previously.
Operating profit surged to 6.037 billion kronor from 4.914 billion kronor last year, expanding the operating margin to 10.6% from 8.6% a year ago. The margin improvement was supported by one-time benefits of approximately 1.6 percentage points stemming from tariffs and goods imports that had elevated the cost of goods sold in earlier quarters.
Net sales rose modestly to 57.189 billion kronor from 57.017 billion kronor in the prior year. In local currencies, sales increased by 1% compared with the previous year, though the company operated around 2% fewer stores at quarter-end versus the same period last year.
The company, which operates in the global fashion and apparel sector, said it is monitoring geopolitical developments in the Middle East and their potential impact on international trade. The retailer noted it maintains flexibility in its supply chain and operates with a low proportion of air freight, positioning it to adjust goods flows in response to changing conditions.
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