Swedish fashion giant H&M posted a dip in operating profit for the second quarter of 2025, signalling the ongoing strain of currency fluctuations, supply chain costs, and cautious global consumer sentiment.
The company’s operating profit fell to approximately $624 million, with margins impacted by a stronger US dollar, elevated freight costs, and continued investment in customer experience. After-tax profits also declined, down from last year’s figures, reflecting broader macroeconomic pressures across international markets.
Despite the downturn, H&M remains cautiously optimistic. Sales in local currencies were up 1% year-over-year, even though the company operated 4% fewer stores. Stripping out closures, sales rose 3%, supported by growth in categories like H&M Womenswear, H&M Move, and online platforms.
CEO Daniel Ervér reinforced confidence in the brand’s long-term strategy, highlighting improvements in cost control, product innovation, and omni-channel retailing. Notably, H&M is preparing for a major market entry into Brazil, signaling ambition in both physical retail and e-commerce.
H&M’s sustainability integration has also drawn positive attention, earning recognition from environmental bodies. The company remains focused on operational discipline while navigating a volatile geopolitical and economic environment.
As June sales are expected to grow by 3% in local currencies, H&M’s next phase appears to hinge on strategic agility, digital acceleration, and international market expansion.
Strategic Insight by 365247 Media
As fashion retail adjusts to a new era of cautious spending and cost volatility, H&M’s performance underscores a key challenge: balancing innovation and cost-efficiency in a high-inflation, multi-currency world. Their move into Brazil is more than geographic—it’s symbolic of a global pivot to dynamic, high-growth economies where digital + physical retail can scale together.
