H&M Reports Strong Third‑Quarter Performance Amid Cost‑Control Gains

Hennes & Mauritz AB (H&M) released its nine‑month financial results for the period ending 31 August 2025 on 25 September 2025. The Swedish retailer, listed on the Stockholm Stock Exchange and trading at 156 SEK as of 23 September, has delivered a mix of modest sales growth and sharper cost discipline, sparking a notable rally in its shares.

Sales Growth and Store Footprint

  • Net sales in local currencies rose by 2 % in the third quarter, a modest increase that still marked an improvement over the same period in 2024.
  • When converted to SEK, the company reported net sales of SEK 57 billion for the nine‑month period.
  • The retailer reported a 4 % reduction in stores by the end of the quarter relative to the same date in the previous year, a structural change that supports the company’s ongoing strategy to streamline its store portfolio.

These figures suggest that H&M’s sales momentum remains steady even as it reduces its physical footprint—a key element of its broader cost‑saving drive.

Cost‑Control and Profitability

H&M’s management highlighted significant improvements in cost control, a narrative echoed by several market commentators:

  • The CEO, Daniel Ervér, emphasized that the company has “stabilised its sales trend and improved cost control,” yet remains “not satisfied” and continues to pursue further efficiencies.
  • Operational reviews identified efficiencies in store operations, logistics, and inventory management that have contributed to the improved cost profile, with expectations that these gains will persist into the fourth quarter.
  • Analyst coverage noted that the company’s profitability exceeded expectations, attributing the outperformance to the decline in operating costs.

These developments have reassured investors that H&M’s leaner operating model is delivering tangible results.

Market Reaction

The market’s response was swift:

  • Shares surged ≈ 9 % to 170.10 SEK early in the session, marking the largest intraday gain since March 2024.
  • The rally was supported by a broader European market that, despite a modest pullback ahead of U.S. inflation data, showed resilience in the face of weaker macro‑economic signals.

Contextual Factors

H&M’s performance comes at a time when European equity markets are cautiously awaiting U.S. macro‑economic releases. While the European indices displayed slight declines in pre‑market trading, H&M’s results helped anchor investor sentiment.

Outlook

  • The company remains cautious about U.S. growth for the fourth quarter, citing rising inflationary pressures.
  • Nonetheless, management is optimistic about the company’s continued ability to generate value through disciplined cost management and a refined store strategy.

Overall, H&M’s latest quarterly results reinforce its position as a resilient player in the specialty retail sector, demonstrating that strategic store reductions and efficient operations can coexist with steady sales growth.