Source: Inderes & Bloomberg 2026.09.16, 22 analysts

H&M will publish its Q3 report on Thursday, September 24. We expect the company's top line to grow only 1% in local currencies, reflecting ongoing challenges in brand traction and still challenging market environment. We anticipate profitability to remain stable, although we see previous gross margin tailwinds fading and operating expenses increasing. Our key watchpoints for the upcoming report will be September sales and the margin outlook.

Top line still searching for traction

In conjunction with its Q2 report, H&M guided for flat year-on-year local currency sales growth in June (+3% in June 2025, including a negative calendar effect of ~1 percentage point). For the rest of the quarter, the company faces easier comparables of roughly 1-2 percentage points in July and August. Combined with store optimization and a modest improvement in consumer confidence, we estimate Q3 revenue growth of roughly 1% in local currencies. While this points to a sequential improvement, we expect it to be fairly slow, and the strategic initiatives the company has launched across product offering, omnichannel experience, and brand relevance have yet to translate into meaningful sales growth.

Margin tailwinds fading

On gross margin, we forecast an improvement of 0.6 percentage points, from 52.9% in Q3'25 to 53.5% in Q3'26. While we still expect some support from supply-chain efficiencies linked to H&M's efforts to consolidate volumes with fewer, more efficient suppliers, we expect this effect to gradually fade from Q3'26 as the benefits mature and enter comparison figures. We expect external factors to be neutral, in line with guidance. A continued tailwind from transactional currency effects is being partly offset by tariff costs and sequential freight cost pressure. Note that our gross margin forecast does not assume any potential tariff refunds, which would represent a one-off COGS benefit. In our view, this could benefit the company in Q3/Q4, though the timing of any receipts remains unclear at this stage.

On OPEX, we believe H&M has demonstrated solid operating cost control in recent periods through store portfolio optimization, inventory productivity, and more efficient marketing investment. From Q3, however, the company will face a tighter comparison base on costs, alongside some upward OPEX pressure from the phasing of technology investments, in line with guidance. We also expect some OPEX deleverage from FX, as the SEK represents a greater share of H&M's operating costs than of its sales. As a result, we expect EBIT to be roughly flat year-on-year at 4,915 MSEK, corresponding to an EBIT margin of 8.6%.

September sales update and margin drivers in focus

While H&M does not provide financial guidance, it will likely report September sales figures, which we believe will be a key focus for investors. H&M reported flat sales in September last year against a tough comparison figure (+11%). With continued warm temperatures, we see a risk of autumn clothing demand shifting into the latter part of the quarter. We do not model current trading, but we expect around 1.5% growth in local currencies for Q4 as a whole.

We will also pay close attention to management's commentary on the margin outlook. Our key watchpoints include markdown trends, the impact of external factors such as freight and raw materials, and the ongoing rollout of technology investments.