H&M to explain the turnover in the midst of the decline of consumer trust

Saturday 21 June 2025 15:20

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H&M Investors will hope that the High Street fashion chain shows that this is a recovery next week even though there is carefulness among many buyers.

The retailer is expected to report a slight increase in sales for the last quarter in the update on Thursday, June 26 because it continues with its turnaround strategy.

It appeared after the Swedish company reported a weaker sales than the estimated for the first quarter of its financial year in the previous update in March.

H&M sees net sales growing 2 percent to 55.3 billion Sweden Krona (£ 4.24 billion) for three months to 28 February.

However, it was marked that this slowed down to 1 percent in March in the midst of pressure on consumer finances.

Sales growth was also tapped by H&M plans to cut shop plantations and help simplify their operations over the past year.

H&M said it had 40 clean shop closures during this quarter and continued to close the site in recent months.

The new H&M boss began to improve last year

The shop plantation reshuffle is part of a large turnaround plan under Daniel Erver, who was the executive chief last year.

This group, which also has & other stories and cos, is trying to accelerate the new slow growth of this.

However, Adam Cochrane from Deutsche Bank stressed that trade in the last quarter was “impossible to be a turning point”.

He added: “H&M is progressing through its turnover but there will be relatively limited evidence from this in Q2, given the weather conditions that do not help throughout Europe and the impact of negative currency translation.

“Our revenue estimates that are updated by 5BN Sweden Krona showed a decline of 21 percent of the years-to-year, better than 42 percent in Q1 but it is still difficult to provide proof of sustainable turnover.”

Mr. Cochrane added that the buildup in the stock inventory at the end of the first quarter could not be fully canceled in recent months and could cause “further problems” into the second half of this year.

Deutsche Bank estimates that H&M will see slow sales growth to 1.5 percent for the last quarter but indicating this will be a decline of around 5 percent after the currency rate is calculated.

Jefferies Equity Analyst James Grzinic is more pessimistic, pointing to 0.5 percent growth for the quarter.

He said the broker took a “more careful view” for the new H&M trading, after the signs that the Chinese rival platform “lost momentum” in the US.

Meanwhile, fellow rivals Inditex, who have Zara and Pull & Bear, see growth slowing to 6 percent in recent weeks.

By Henry Saker-Clark, PA Business Editor