Hennes & Mauritz AB Reports Strong Q4 2024/2025 Results Amid Cost‑Control Gains and Store Rationalisation

H&M, the Swedish specialty‑retail giant, announced on 29 January 2026 that its fourth‑quarter operating profit rose sharply by 38 % to 6.36 billion SEK, driven largely by disciplined cost management and a leaner store footprint. The company reported net sales of 59.221 billion SEK in local currencies, up 2 % on the same period last year, while the conversion to SEK reflected a 7‑percentage‑point erosion from the strengthened krona.

Operating Performance

  • Operating profit: 6.364 billion SEK (up 38 %); operating margin of 10.7 %.
  • Gross profit: 33.084 billion SEK, yielding a gross margin of 55.9 %.
  • Selling and administrative expenses: 26.698 billion SEK, down 9 % after currency effects, a 3 % decline in local‑currency terms.

These figures underscore the company’s success in tightening its cost base, improving the quality of its product offering, and streamlining inventory management.

Store and Cash‑Flow Highlights

H&M continues to execute a strategic store‑reduction programme, reporting four fewer stores at the quarter’s end compared with the same point last year—an approximately 4 % reduction in physical retail footprint.

Cash flow from operating activities rose to 8.406 billion SEK, reflecting stronger working‑capital efficiency. Inventory (stock‑in‑trade) fell by 12 % to 35.427 billion SEK, signalling a healthier mix of goods on hand.

Earnings Per Share and Dividend Guidance

The company’s profit after tax reached 4.332 billion SEK, translating to SEK 2.72 per share (vs. SEK 1.861 in the prior year). H&M confirmed its dividend at SEK 6.90 per share, up from SEK 6.80 previously.

Currency Impact and Future Outlook

While the krona’s appreciation weakened local‑currency sales by roughly 3 %, H&M’s earnings still grew, demonstrating resilience to external exchange pressures. Looking ahead, management anticipates a modest 2 % decline in local‑currency sales for the period from early December to late January of the new fiscal year, signalling a cautious stance as the company continues to realign its operations.

Analyst Consensus

Modular Finance’s consensus estimates for the fourth quarter project an operating profit of 5.580 billion SEK—slightly lower than the actual result but still a notable improvement over the 4.624 billion SEK recorded in the previous year. The consensus also forecasts a net sales figure of 62.193 billion SEK in local currencies, consistent with the reported 59.451 billion SEK, and a gross profit of 33.942 billion SEK, aligning with the company’s published 33.084 billion SEK after currency adjustments.

Strategic Implications

H&M’s ability to lift profitability while trimming store numbers and managing inventory levels signals a mature, disciplined approach to retail in an increasingly digital marketplace. The firm’s focus on cost control, alongside its investment in customer‑centric merchandising, positions it to navigate ongoing macroeconomic headwinds, including currency volatility and shifting consumer behaviour.

In sum, Hennes & Mauritz AB’s latest financial disclosure highlights a company that is tightening its operations, generating stronger margins, and maintaining shareholder returns—all while preparing for a more streamlined, efficient retail model in the coming fiscal year.