Swedish fashion retailer H&M said on Thursday that operating profit for its fiscal first quarter rose to 1.51 billion Swedish crowns, up from 1.20 billion in the comparable year-earlier period. The company flagged this as the third consecutive quarter of higher operating profit and noted the result exceeded the average forecast of 1.39 billion in an LSEG analyst poll.
The quarter in question, which encompasses the key Christmas shopping period, saw organic sales decline by 1% compared with the prior year. H&M also reported that local-currency sales during the first two months of the quarter were down 2%.
Looking forward within the quarter, the group said it expects sales in March to increase by 1% in local currencies. The company provided the U.S. dollar conversion rate used in reporting: $1 = 9.3424 Swedish crowns.
Context and performance metrics
H&M’s reported operating profit of 1.51 billion crowns reflects continued improvement in headline earnings through three consecutive quarters. The figure outperformed the mean analyst estimate of 1.39 billion recorded in the referenced poll.
Despite the profit rise, underlying sales trends showed a modest contraction on an organic basis for the quarter as a whole and a slightly larger decline when isolating the first two months of the period, prior to the company’s March sales projection.
Implications for markets and sectors
The results and the sales guidance primarily impact the retail and consumer discretionary sectors, with potential relevance for investors tracking European apparel names and broader retail earnings momentum. Currency translation is also a reporting consideration, given the explicit exchange rate disclosed.
Summary takeaway
H&M delivered an operating profit that beat consensus while reporting a modest decline in organic sales. The company expects a slight recovery in March sales on a local-currency basis. The combination of profit growth and near-term sales weakness frames the current results as mixed but tilted toward positive on operating profitability.