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Consumers walk in front of H&M shop in Galeria Krakowska shopping mall in central Krakow, Poland on March 13, 2025. The country keeps its interest rates high as anyway high inflation is expected to rise again which affects the Polish economy. (Photo by Dominika Zarzycka/NurPhoto via Getty Images)
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H&M on Thursday posted weaker-than-expected sales in the fiscal first quarter in a slow start to the year as depressed demand continues to weigh on the world's second-largest clothing retailer.
Sales at the Swedish fashion giant rose 2% in local currencies to 55.33 billion Swedish krona ($5.5 billion) year-on-year in the three-month period to Feb. 28, slightly below the 55.86 billion forecast by LSEG analysts.
Operating profit totaled 1.2 billion in the first quarter, versus 1.9 billion Swedish krona expected.
The retailer attributed the weaker operating profit to "negative external factors, increased markdowns and investments in the customer offering," which impacted gross margins.
The company noted, however, that such factors were "estimated to already be significantly smaller in the second quarter."
"Operating profit and profitability were impacted by temporarily challenging development of the gross margin," CEO Daniel Ervér said in a statement.
"Our main priorities are a strengthened product offering, a more inspiring shopping experience and a stronger brand. Through this we create the conditions for long-term, profitable and sustainable growth," he added.
This is a breaking news story and will be updated shortly.
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