H&M Hennes & Mauritz AB reinforced its expansion strategy in growth markets by highlighting, in its 2025 annual report, the advancement of operations in Latin America, with a focus on Brazil. After opening four stores in the country, the company already has concrete plans: seven new stores in Brazil, with the first in Rio de Janeiro, are contracted to open, according to the balance sheet.
Still in the expansion plan, H&M stated that Paraguay will become a new market for the company this year and that it will start operating online in Ukraine in the first quarter, according to the report.
In the fourth fiscal quarter, operating profit rose to 6.36 billion Swedish crowns (US$719 million), compared to 4.62 billion (US$522 million) a year earlier, exceeding the expectations of analysts surveyed by FactSet, who projected 5.83 billion crowns (US$659 million). During the period, sales fell 4.8%, to 59.22 billion Swedish crowns (US$6.69 billion), still below the projection of 59.66 billion crowns (US$6.74 billion). Gross margin increased to 55.9%, compared to 54.6% a year earlier.
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The company also highlighted the improvement in inventory management, which fell 12% in the period, supported by “a more efficient and flexible supply chain” and greater volume of purchases within the station itself.
According to the report, new logistics centers in Europe will begin operating in 2026, with the aim of improving the availability of products both in digital channels and in physical stores.
For the start of the new financial year, H&M warned that sales between December and January should decline 2% in local currencies, citing the effect of a strong Black Friday at the end of November and seasonal factors. The company also pointed out that the impact of tariffs and the strengthening of the Swedish krona on margins is likely to be more negative in the first quarter of 2026.
