H&M Reports 53% Drop in Q1 2025 Net Profit as Profitability Pressures Mount

Despite a modest 3% sales increase, H&M's earnings fell short of expectations due to markdowns, investments, and external challenges.

H&M's Q1 2025 net profit declined by 53% to 579 million kronor, significantly missing the 1.28 billion kronor forecast by analysts.
Gross margin narrowed to 49.1%, down from 51.5% in the same period last year, driven by markdowns and external factors.
Sales grew 3% year-on-year to 55.33 billion kronor, with positive trends in Europe, particularly Germany and Poland, and improved online performance.
The company closed 40 underperforming stores during the quarter as part of its ongoing store optimization strategy.
H&M remains confident in its long-term growth strategy, citing cost controls, digital investments, and improved conditions expected in the coming quarter.