H&M profit surges on popular autumn collections; tariff concerns temper outlook
Swedish fashion retailer H&M reported a stronger-than-expected jump in third-quarter profit as shoppers embraced its autumn collections, although the company warned that rising tariffs could weigh on margins in the current quarter.
The company’s operating profit for June-August rose to 4.91 billion crowns ($523 million) from 3.51 billion a year earlier, surpassing analyst expectations of 3.68 billion crowns. The gain was supported by a 2% increase in local-currency sales, a stronger product mix, and tighter cost control. Shares jumped 10% in mid-morning trade, lifting the year-to-date gain to 16%, News.Az reports, citing Reuters.
CEO Daniel Erver, who took charge in January 2024, has been steering H&M toward trendier, fashion-conscious collections to compete with fast-fashion rivals like Shein and Zara. The company also reported a 9% drop in inventory levels, reflecting stronger full-price sales rather than end-of-season discounts.
H&M cautioned that tariffs on imports, particularly from the U.S., could pressure margins in the September-November quarter. The retailer is exploring sourcing closer to the U.S., its second-largest market, to mitigate the impact. Despite global uncertainties and higher living costs, H&M continues to show resilience in attracting shoppers with its in-season offerings.
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