In an unexpectedly positive interim report, the Swedish fashion giant Hennes & Mauritz (H&M) announces significant profit increases for the first quarter of its fiscal year. With an operating result of 2.08 billion Swedish kronor (approximately 181 million euros), H&M was able to significantly exceed the expectations of analysts, who had predicted a profit of 1.3 billion kronor. This result represents an almost tripling compared to the same period last year. The surplus attributable to shareholders doubled to 1.2 billion kronor.

A crucial factor for this success was a strong gross margin, favored by improved supply chain conditions, even though discounts slightly increased compared to the previous year. Thanks to a strict cost-cutting program, administrative and sales expenses also decreased. Daniel Ervér, the new CEO of H&M, stressed that the company's development is heading in the right direction, although slightly higher markdowns should be expected in the current quarter.

Despite the positive results, H&M had to accept a slight decline in sales of two percent to 53.7 billion kronor during the reporting period, especially in North and South America. It is worth noting the reduction in inventory levels by 8 percent, as well as a decrease in the number of stores by 76 to 4,338.

The H&M stock recorded a strong price increase of almost 13 percent to 174.3 Swedish kronor in early trading in the wake of the release of these figures. Analysts from Deutsche Bank and Jefferies praised the retailer's financial results, particularly the unexpectedly strong gross margin and the improved operating profit margin, which brings the ambitious target of a 10 percent profit margin within reach again. This positive development is further supported by a significant acceleration in sales momentum at the start of the spring/summer season.