H&M reports third-quarter operating profit above expectations

Hennes & Mauritz AB (H&M) reported third-quarter operating profit that exceeded analyst expectations. The Swedish fashion retailer posted an operating profit of 6.04 billion Swedish krona (approximately 535.5 million euros) for the three months ending in August, surpassing the consensus forecast of 5.27 billion krona.

Revenue for the quarter reached $5.98 billion, exceeding the estimated $5.84 billion. While sales grew by only 1% in local currencies, the company benefited from improved margins, cost-saving measures, and tariff benefits in the US. Despite the profit growth, H&M shares saw a decline in Stockholm following warnings of upcoming challenges.

The company anticipates pressure on procurement costs in the fourth fiscal quarter and expects increased promotional activity ahead of Black Friday. Analysts noted that future profit growth will depend heavily on revenue acceleration as the company navigates rising transport costs and a cost-of-living crisis that has led consumers to limit discretionary spending.