Fast-fashion retailer H&M group closed 135 stores, but its profits and stock are soaring. Here’s why

The H&M group is entering the fall season with style. On Wednesday, September 24, the retailer released its third-quarter earnings and reported an operating profit of 4.9 billion Swedish krona ($521 million). The H&M group owns brands including H&M, COS, Monki, and Arket.

Its operating profit marked a 40% increase year-over-year (YOY) and beat analysts’ predicted 3.7 billion Swedish krona ($393 million), according to consensus estimates cited by CNBC. 

The figures also marked consecutive quarterly successes for the H&M group, which also beat estimated operating profits in quarter-two. However, the H&M group now predicts that 2025’s quarter-four will yield less positive results due to the “increased impact” of tariffs. 

Stock price rises despite tariff warning

Despite the concerning forecast, investors responded positively to H&M group’s current earnings. Trading on the Stockholm Stock Exchange, the company’s share price (STO:HM-B) jumped 10% through after-hours and into premarket trading Thursday morning. 

Other factors could have contributed to the boost in share prices. The H&M group reported that sales in local currencies had increased by 2% during the quarter.

However, the company notably reduced its store count over the previous nine months. 

As of August 31, the H&M group had 4,118 stores, compared to 4,298 at the same point last year.

The company closed 135, or 4%, of its store locations over the first nine months of the fiscal year, 48 in quarter-three alone.

A majority of the closures were H&M and Monki stores in Europe, Asia, Oceania, and Africa. Only five stores shut down throughout North and South America. 

These closures don’t necessarily point to a planned consolidation. The company pointed to a newly opened store, its first in Brazil, as being “well received.”

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