Hennes & Mauritz (HM) Q3 2026 earnings summary

Executive summary

• Achieved a 10.6% operating margin in Q3, up from 8.6% in Q3 2025, with net sales up 1% in local currencies and profitability driven by cost control, operational efficiency, and a one-off tariff effect.

• Strategic focus remains on product, experience, and brand, with ongoing investments in sourcing, technology, digital infrastructure, and organizational agility.

• Store optimization and digital enhancements, including RFID, self-checkouts, and omnichannel expansion, are improving customer experience and store productivity.

• Summer collections performed well, but logistics disruptions and supply chain issues impacted sales.

Financial highlights

• Q3 net sales: SEK 57,189m (up 1% in local currencies year-over-year); Q3 gross margin: 54.0% (up from 52.9%); Q3 operating profit: SEK 6,037m (operating margin 10.6%, up from 8.6%).

• Rolling 12-month gross margin: 54.4%; operating margin: 9.0%; EPS up 23% year-over-year; ROCE at 18%.

• Cash flow from operating activities up 17% to SEK 26,524m for nine months; net cash position SEK 5,309m.

• Inventory value increased by SEK 1.4 billion year-over-year, mainly due to goods in transit and European logistics consolidation.

• Selling and administrative expenses decreased by 1% in Q3 in both SEK and local currencies.

Outlook and guidance

• September sales expected to grow by 1% year-over-year in local currencies.

• Q4 gross margin to face headwinds from higher transportation costs, increased markdowns, and longer campaign periods.

• Full-year SG&A growth guidance narrowed to the lower end of the previously guided range; CapEx expected at the lower end of the guided range, with a back-heavy activation profile in Q4.

• ERP rollout and related SG&A impacts will continue into 2027 and 2028.

• Ongoing store portfolio optimization and digital expansion expected to yield slightly positive sales effect for full-year 2026.