Results at a glance
- Period
- FY2026Q3
- Revenue
- SEK 57.2B (57,189 MSEK)
- Net income
- SEK 4.1B (4,123 MSEK)
- Net margin
- 7.2%
From the Hm Open LedgerView the live ledgerIssuer filing (FY2026Q3)
H&M sold SEK 57,189 million of clothing in the three months to 31 August 2026, 0.3% more than a year earlier, and turned it into an operating profit of SEK 6,037 million, up 23%. The operating margin was 10.6% against 8.6% a year earlier. The nine-month report says in the same sentence that about 1.6 percentage points of that margin are one-time effects from tariffs and goods imports. Take them out and operating profit grew about 4%, on a gross margin that fell. Both versions of the quarter are true. Only one of them repeats.
The Headline Numbers
H&M's financial year runs from 1 December to 30 November, so the third quarter of 2026 is June through August. The report prints the quarter beside the nine-month column, and everything below is the standalone quarter. The interim report is reviewed by the company's auditor, not audited.
| Metric | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
| Net sales | SEK 57,189M | SEK 57,017M | +0.3% |
| Cost of goods sold | SEK 26,322M | SEK 26,874M | −2.1% |
| Gross profit | SEK 30,867M | SEK 30,143M | +2.4% |
| Gross margin | 54.0% | 52.9% | +1.1 pts |
| Selling and administrative expenses | SEK 24,832M | SEK 25,167M | −1.3% |
| Operating profit | SEK 6,037M | SEK 4,914M | +22.9% |
| Operating margin | 10.6% | 8.6% | +2.0 pts |
| Net financial items | SEK −574M | SEK −592M | −3.0% |
| Tax | SEK 1,365M | SEK 1,110M | +23.0% |
| Profit for the period | SEK 4,098M | SEK 3,212M | +27.6% |
| Net income (attributable to shareholders) | SEK 4,123M | SEK 3,229M | +27.7% |
| Earnings per share | SEK 2.58 | SEK 2.01 | +28.4% |
| Cash flow from operating activities | SEK 11,908M | SEK 9,985M | +19.3% |
| Stores at period end | 4,023 | 4,118 | −2.3% |
Two profit lines appear because H&M has a small non-controlling interest that lost SEK 25 million in the quarter. Profit for the period is SEK 4,098 million. The shareholders' share, which is what earnings per share is built on and what our ledger records as net income, is SEK 4,123 million.
Sales were flat and every line under them moved in the right direction. Cost of goods sold fell 2.1%, selling and administrative expenses fell 1.3%, and the difference went straight to operating profit, which rose SEK 1,123 million. In local currencies sales grew 1%, with about 2% fewer stores than a year earlier, and the report puts the currency translation drag at "just under 1 percentage point due to the strengthened Swedish krona".
Now the same table with the one-time effect removed. The report gives the effect as margin points and does not print a krona amount. It does print the nine-month operating profit excluding one-time items, SEK 13,206 million, and the six-month report prints the first-half figure excluding one-time costs, SEK 8,104 million. The difference, SEK 5,102 million, is the third quarter without the effect, and SEK 6,037 million less SEK 5,102 million is SEK 935 million. That is 1.6% of sales, which agrees with the report's own wording. These are our arithmetic on published figures, and we label them that way everywhere they appear.
| Q3 2026 | As reported | Excluding the one-time effect | Q3 2025 |
|---|---|---|---|
| Gross profit | SEK 30,867M | SEK 29,932M | SEK 30,143M |
| Gross margin | 54.0% | 52.3% | 52.9% |
| Operating profit | SEK 6,037M | SEK 5,102M | SEK 4,914M |
| Operating margin | 10.6% | 8.9% | 8.6% |
| Operating profit growth | +22.9% | +3.8% | n/a |
Of the SEK 1,123 million increase in operating profit, SEK 935 million is the one-time effect. The other SEK 188 million is the business: selling and administrative expenses fell SEK 335 million, the result from associated companies swung from a SEK 62 million loss to a SEK 2 million gain, and underlying gross profit fell SEK 211 million.
Revenue Deep Dive
H&M reports sales by six regions.
| Region | Q3 2026 | Q3 2025 | Change in SEK | Change in local currencies |
|---|---|---|---|---|
| Western Europe | SEK 19,414M | SEK 19,863M | −2% | −1% |
| North and South America | SEK 12,457M | SEK 12,085M | +3% | +1% |
| Southern Europe | SEK 7,764M | SEK 7,946M | −2% | +1% |
| Asia, Oceania and Africa | SEK 6,528M | SEK 6,450M | +1% | +4% |
| The Nordics | SEK 5,595M | SEK 5,248M | +7% | +6% |
| Eastern Europe | SEK 5,431M | SEK 5,425M | 0% | +1% |
| Total | SEK 57,189M | SEK 57,017M | 0% | +1% |
Five of six regions grew in local currencies. The one that did not is the largest. Western Europe is 34% of sales and fell 1%, and Europe is where the report locates a problem of the company's own making: sales "were affected by, among other things, continued disruptions in the logistics network in Europe and in the global supply chain". H&M is consolidating its European warehouses, and the report describes "temporary effects from the consolidation work in the European logistics network". The Nordics, the home market and under a tenth of sales, grew 6%.
The store count explains part of the flat total. H&M ended the quarter with 4,023 stores, 95 fewer than a year earlier, after closing every Monki store in 2025. Just over 30% of sales are online. The smaller brands, which the report calls portfolio brands, grew 3% in local currencies in the quarter and 4% excluding Monki.
The demand language in the report is measured, and it says so itself. The chief executive's comments open with: "Although sales developed in a positive direction during the quarter, we see further potential to increase sales going forward." The strongest sentence is about one season: "Our summer collections were well received and contributed to better sales development, particularly towards the end of the quarter." The outlook attached to it is a single month. September sales "are expected to increase by 1 percent in local currencies". A company that expected demand to carry the autumn would say more than that.
The ledger line that tests a demand claim in fashion retail is inventory. Stock-in-trade was SEK 39,355 million on 31 August, 4% above a year earlier in kronor and 9% above in constant currency, against sales that grew 1%. It is 17.8% of trailing twelve-month sales against 16.4% a year ago. The report's explanation is "the increased value of goods in transit, which is due to disruption in global supply chains", and it adds that "the composition of the stock-in-trade is good". Accounts payable rose with it, from SEK 22,163 million to SEK 26,212 million. Goods on ships are not unsold goods on shelves, so that explanation is plausible. It is also the kind of statement only the next gross margin can confirm.
On expansion the report is concrete and modest: the first two H&M stores in Paraguay opened in the quarter, Malta and Azerbaijan follow in the fourth quarter, and Argentina in 2027 through a franchise partner. Against that, the plan for 2026 is about 90 openings and about 170 closures. H&M is rearranging its footprint. It is not growing it.
The Margin Story
| Margin | FY2022 | FY2023 | FY2024 | FY2025 | Q3 2025 | Q3 2026 |
|---|---|---|---|---|---|---|
| Gross margin | 50.7% | 51.2% | 53.4% | 53.4% | 52.9% | 54.0% |
| Selling and administrative expenses / sales | 47.5% | 45.5% | 46.0% | 45.2% | 44.1% | 43.4% |
| Operating margin | 3.2% | 6.2% | 7.4% | 8.1% | 8.6% | 10.6% |
| Net margin (attributable) | 1.6% | 3.7% | 5.0% | 5.3% | 5.7% | 7.2% |
Read the gross margin row first. It rose from 50.7% in fiscal 2022 to 53.4% in fiscal 2024 and then stopped. The third quarter's 54.0% looks like the next step up, and it is not one: without the one-time effect the quarter's gross margin is 52.3%, below last year's 52.9%.
The report explains both halves of that. On this year: "External factors had a slightly negative effect on purchasing costs in the quarter – mainly driven by increased freight costs. Costs for markdowns were in line with the previous year." On last year: the same quarter "was positively affected by exchange rate gains" on intragroup balances, which were neutral this time. So the underlying decline is partly a tough comparison. It is still a decline, and the fourth-quarter guidance points the same way. The overall effect of external factors on goods sold in the fourth quarter "is assessed to be somewhat negative", and the cost of markdowns "is expected to increase somewhat".
There is no pricing language in the report. Nothing says prices rose and nothing says they will. The phrase H&M uses for its offer is "fashion and quality at the best price", which is a promise to customers and the opposite of a pricing claim. A retailer whose gross margin gains come from purchasing and freight, and whose markdowns are flat to rising, is not raising prices.
The real improvement is one row down. Selling and administrative expenses fell to 43.4% of sales from 44.1%, and they have fallen in absolute kronor: SEK 24,832 million against SEK 25,167 million. The report credits "purchasing, cost control and more efficient operations". The results presentation is more cautious about what comes next, with "somewhat increased cost pressure for remainder of the year". The second quarter also carried SEK 679 million of one-time restructuring costs, which the six-month report prints, and which is why the nine-month figure excluding one-time items nets two opposite effects.
The One Big Question: How Much of the 10.6% Is Repeatable?
The report describes the effect as "one-time effects of approximately 1.6 percentage points from tariffs and goods imports that had increased the cost of goods sold in previous quarters". Read literally, costs that were charged to earlier quarters came back in this one. The report does not say how, and it does not call the amount a refund. The six-month report's note on events after the closing date gives the only other clue: the company "has initiated a structured process to align with the steps set out in the applicable laws and regulatory frameworks concerning tariffs in the U.S."
Three things follow for anyone reading the trend.
First, the quarter flatters itself and understates its predecessors by the same amount. The costs were real when they were booked. If SEK 935 million of cost of goods sold belonged to no quarter after all, earlier gross margins were lower than the underlying business earned. A year ago the nine-month report for 2025 warned that "tariff costs are expected to have an increased impact" on the fourth quarter's gross margin.
Second, the run rate is the trailing figure, and it is good. The operating margin for the last twelve months is 9.0% against 7.2% a year earlier, the report says, and the trailing gross margin is 54.4% against 53.0%. Both include the one-time effect, which is about 0.4 points of trailing sales by our arithmetic. Without it the trailing operating margin is still clearly the highest in the ledger.
Third, there is the distance to the sector leader. This is H&M beside Inditex, each on its last full fiscal year and each in its own currency, so only the ratios compare:
| Last full fiscal year | H&M (to 30 November 2025) | Inditex (to 31 January 2026) |
|---|---|---|
| Net sales | SEK 228,285M | EUR 39,864M |
| Sales growth | −2.6% | +3.2% |
| Gross margin | 53.4% | 58.3% |
| Operating margin | 8.1% | 20.1% |
| Net margin (attributable) | 5.3% | 15.6% |
| Inventory / sales | 15.5% | 8.2% |
The gross margins are five points apart. The operating margins are twelve points apart. Most of the gap between the two companies is therefore below gross profit, in what it costs to run the stores and the organisation, and that is exactly the line H&M is improving. The other row that matters is the last one. H&M carries almost twice as much stock per krona of sales as Inditex does per euro, and that is the structural reason markdowns appear in every H&M outlook paragraph. The report's own answer is "gradually increasing the proportion of in-season purchasing", which is a description of the Inditex model.
At 8.9% without the one-time effect, the third quarter's operating margin is above every full year in H&M's ledger and less than half of what Inditex earned in its last one.
Tracking a SEK 228 Billion Retailer in Plain Text
H&M sold SEK 228,285 million of goods in its last full financial year. Putting those statements into double-entry form forces every krona to land in an account, and it makes a one-time item impossible to leave unlabeled. The conventions are the ones we use for every company in this series: how we model every company. This is the first ledger in the library kept in Swedish kronor, in a unit we call MSEK. Nothing is converted.
This is the third-quarter income statement as it sits in the ledger, with the comments shortened. Income is negative and expenses are positive, the Beancount sign convention, and the last posting is net income.
; Check: −57,189 + 27,257 + −935 + 22,302 + 2,530 + −2 + 574 + −25 + 1,365 + 4,123 = 0 ✓
2026-08-31 * "H & M Hennes & Mauritz AB" "FY2026Q3 Income Statement"
Income:Revenue -57189 MSEK ; net sales
Expenses:CostOfRevenue 27257 MSEK ; cost of goods sold before the one-time effect: the published 26,322 plus the 935 isolated below
Expenses:CostOfRevenue -935 MSEK ; one-time effect from tariffs and goods imports — by subtraction of published figures: 6,037 − (13,206 − 8,104)
Expenses:SellingGeneralAdministrative 22302 MSEK ; selling expenses
Expenses:SellingGeneralAdministrative 2530 MSEK ; administrative expenses
Expenses:OtherNet -2 MSEK ; result from investments in associated companies and joint ventures — income, a credit
Expenses:OtherNet 574 MSEK ; net financial items
Expenses:OtherNet -25 MSEK ; non-controlling interest's share of profit, a loss of 25
Expenses:IncomeTax 1365 MSEK ; tax
Equity:Adjustments 4123 MSEK ; profit attributable to the shareholders of H & M Hennes & Mauritz ABThe two cost of goods sold postings sum to SEK 26,322 million, the figure the report prints. The split between them, the 935, is the only income-statement amount in the ledger that the company did not print as such. Every other income-statement posting in all six periods is transcribed from a statement, and the file's banner shows the subtraction and the pages it comes from. We would rather carry one labeled, derived posting than let a reader mistake a 10.6% margin for the run rate.
The balance-sheet lines that carry the quarter's open question are stock and what is owed for it:
2025-11-30 balance Assets:Current:Inventory 35427 MSEK ; stock-in-trade
2026-08-31 balance Assets:Current:Inventory 39355 MSEK ; stock-in-trade
2025-11-30 balance Liabilities:Current:AccountsPayable -20826 MSEK ; accounts payable
2026-08-31 balance Liabilities:Current:AccountsPayable -26212 MSEK ; accounts payable (operating working capital table, p. 10)Stock rose SEK 3,928 million in nine months and accounts payable rose SEK 5,386 million. That is what goods in transit look like in a ledger: inventory the company owns and has not yet paid for or put on a shelf. It is also why cash flow from operating activities could rise 17% over nine months in which stock absorbed SEK 3,581 million of cash: operating liabilities released SEK 3,468 million.
The second story is equity. Total equity fell from SEK 42,947 million at 30 November 2025 to SEK 39,559 million at 31 August 2026, in nine months that earned SEK 8,765 million. The statement of changes in equity shows why: a dividend of SEK 11,344 million and SEK 1,064 million of share repurchases. Only half the dividend had been paid by the end of August. The cash flow statement shows SEK 5,672 million paid, and a footnote to the parent company's balance sheet shows the same amount still "to be paid", inside current liabilities. Inditex's half-year balance sheet has the same shape for the same reason: its period end also falls between two dividend instalments.
The interim balance sheet is published in summary, with one equity line and a footnote that splits it between shareholders and the non-controlling interest. The ledger holds the shareholders' SEK 39,489 million in a single account, Equity:UndisaggregatedParent, for this period and asserts the component accounts at zero with a comment instead of estimating a split. The annual report restores them.
The Multi-Year Arc
| Financial year (ends 30 November) | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Net sales | SEK 198,967M | SEK 223,553M | SEK 236,035M | SEK 234,478M | SEK 228,285M |
| Sales growth | n/a | +12.4% | +5.6% | −0.7% | −2.6% |
| Gross margin | 52.8% | 50.7% | 51.2% | 53.4% | 53.4% |
| Operating margin | 7.7% | 3.2% | 6.2% | 7.4% | 8.1% |
| Net income (attributable) | SEK 11,010M | SEK 3,566M | SEK 8,752M | SEK 11,621M | SEK 12,158M |
| Net margin | 5.5% | 1.6% | 3.7% | 5.0% | 5.3% |
| Stock-in-trade | SEK 37,306M | SEK 42,495M | SEK 37,358M | SEK 40,348M | SEK 35,427M |
| Stock-in-trade / sales | 18.7% | 19.0% | 15.8% | 17.2% | 15.5% |
| Total equity | SEK 60,018M | SEK 50,757M | SEK 47,601M | SEK 46,211M | SEK 42,947M |
The five years are a collapse and a repair. Fiscal 2022 is the trough: gross margin fell two points, and the year carried SEK 2,591 million of one-time costs for winding down the Russian operations and for a cost and efficiency programme, which the following year's report quantifies. The operating margin fell to 3.2%. Three years later it is 8.1%, above where it started.
What did not come back is growth. Sales in kronor have fallen two years running, and fiscal 2025's SEK 228,285 million is 15% above fiscal 2021. Net income of SEK 12,158 million is 10% above fiscal 2021. The recovery is a margin recovery on a business that is no larger.
The last row is the capital policy. Equity fell every year, from SEK 60,018 million to SEK 42,947 million. In the four years after fiscal 2021 the statements of changes in equity record SEK 42,626 million of dividends and SEK 7,317 million of share repurchases against SEK 36,097 million of profit attributable to shareholders. That lifts return on equity, which the nine-month report puts at 33.3% for the trailing twelve months, and it leaves the equity to assets ratio at 21.8% on a balance sheet where right-of-use assets are SEK 52,124 million of SEK 181,053 million.
The Verdict: Bull vs. Bear
Bull Case
- Operating profit for the nine months is SEK 13,462 million against SEK 12,031 million, and SEK 13,206 million excluding one-time items in both directions, a 10% increase on sales that fell 4% in kronor.
- Selling and administrative expenses fell in absolute terms in the quarter, by SEK 335 million, and are 43.4% of sales against 47.5% in fiscal 2022.
- Cash flow from operating activities was SEK 26,524 million in nine months, up 17%, against SEK 5,550 million of investment. The group reports a net cash position of SEK 5,309 million excluding lease liabilities.
- The trailing twelve-month operating margin is 9.0%, the highest in the ledger, and remains so without the one-time effect.
- Five of six regions grew in local currencies with about 2% fewer stores.
Bear Case
- About SEK 935 million of the quarter's SEK 6,037 million operating profit is a one-time effect, by our arithmetic on the report's figures. Without it operating profit grew 3.8% and the gross margin fell from 52.9% to 52.3%.
- Sales grew 1% in local currencies and the September guide is 1%. The report's demand language covers one summer collection and does not claim more.
- The report contains no pricing language, no claim that demand exceeds supply and no claim of an industry upturn. The supply language it does contain is about H&M's own delayed goods.
- Stock-in-trade is up 9% in constant currency against 1% sales growth, and the fourth-quarter outlook is for higher markdowns and higher freight costs.
- Equity fell 28% between fiscal 2021 and fiscal 2025, and interest-bearing liabilities excluding leases have risen to SEK 21,196 million from SEK 17,106 million a year ago. The payout has run ahead of the earnings.
Our Take
The third quarter is a cost story with a windfall on top, and the cost story is the part worth owning. H&M cut selling and administrative expenses from 47.5% of sales in fiscal 2022 to 45.2% in fiscal 2025, and in the third quarter it was still taking kronor out of the base. That is real and it is in the ledger in every period. The 10.6% margin is not. We think the honest number for the quarter is 8.9%, and the honest description is a retailer that has rebuilt its margin to where it was before 2022 without rebuilding its sales. The next step is harder, because it has to come from the top line or from inventory. Watch the fourth-quarter gross margin against last year's and the stock-in-trade at 30 November. If the goods in transit turn into full-price sales, stock falls back toward 16% of sales and the underlying gross margin holds. If they turn into markdowns, the one-time effect will have hidden the first quarter of a decline.
