H&M Earnings Expected to Rise Despite Lower Sales -- Earnings Preview

Dow Jones03-25 17:15

By Dominic Chopping

STOCKHOLM--Swedish fashion retailer Hennes & Mauritz is scheduled to report results for its fiscal first quarter on Thursday. Here is what you need to know:

NET PROFIT FORECAST: H&M is expected to report net profit of 647 million kronor ($69.5 million) for the December-February period, according to a FactSet poll. This compares with 585 million kronor a year earlier.

SALES FORECAST: Sales are expected to fall 8.7% to 50.54 billion kronor, according to FactSet.

Shares have risen 29% over the past 12 months to around 173.60 kronor.

WHAT TO WATCH:

--The company has estimated that sales between December and January decreased 2% in local currencies, mainly due to strong sales during Black Friday week at the end of November, which led to subdued demand in December, cautious delivery planning in the U.S., the timing of the Lunar New Year and weak demand in some major European markets.

--Sales should have accelerated somewhat in February, mainly due to weaker comparisons and the reverse impact of the Lunar New Year timing, Inderes analyst Lucas Mattsson said. Overall, Inderes expects first-quarter sales growth in local currencies to be roughly flat, while a much more negative currency impact driven by a stronger Swedish krona could result in a reported sales decline of around 9%.

--The gross margin could improve to 50.0% in the first quarter from 49.1% a year ago, despite an increasing tariff impact, supported by supply chain efficiencies, lower freight costs and a weaker U.S. dollar, Mattsson said. "We believe that continued strong cost discipline will help improve operating profit to 1.33 billion kronor and slightly increase the operating margin to 2.6% (from 2.2%)."

--Key focus areas will be regional commentary, particularly the U.S., where tariff impacts remain a risk, UBS analyst Sreedhar Mahamkali wrote. The Middle East performance and how management frames gross margin trajectory in the context of broader geopolitical uncertainty will also by eyed, he adds.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

March 25, 2026 05:15 ET (09:15 GMT)

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H&M Earnings Expected to Rise Despite Lower Sales -- Earnings Preview

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