Swedish fashion giant H&M announced on Thursday that its operating profit rose to 6.04 billion Swedish crowns ($608.6 million) in the June‑August quarter, surpassing the 5.14 billion‑crown average forecast from an LSEG analyst poll. The increase follows a year‑earlier profit of 4.91 billion crowns.

Chief Executive Daniel Erver credited tighter cost controls, more efficient sourcing and improvements in purchasing as the drivers of the stronger result. “Improvements within purchasing, cost control and operation efficiency contributed to a more profitable business,” Erver said in a statement.

Margin expansion and sales outlook

Gross‑profit margin widened to 54.0% in the quarter, up from 52.9% a year earlier, aided by one‑off positive effects from tariffs. Analysts had expected a margin of 53.4%.

Sales grew 1% in local‑currency terms during the quarter, modestly ahead of expectations for sluggish growth. Erver noted that while sales moved in a positive direction, the company sees further potential to increase sales going forward.

Strategic moves

H&M said it is increasing the share of clothing it purchases in‑season to react faster to fashion trends, shifting consumer tastes and unpredictable weather patterns. The retailer also expects September sales to rise by about 1% in local currencies.

Erver, who took the helm in January 2024 with a mandate to boost profitability and strengthen the brand, faces ongoing competition from fast‑fashion rivals such as Shein and Inditex’s Zara. Investors are watching for signs that his turnaround plan can sustain growth.

Separately, the billionaire family that founded H&M is quietly increasing its stake in the company, fueling speculation that a private‑equity takeover could be on the horizon.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.