H&M Group
Swedish fast-fashion retailer running H&M, COS, and Weekday through 4,000+ stores worldwide.
On the record
Checkpoint: H&M Q3 FY2026 earnings report, the next test of whether sales stabilize or keep sliding
The call
H&M is shrinking on purpose to stay profitable while Zara pulls ahead and Shein and Temu undercut it on price, with the Persson family's grip over the stock as the biggest wildcard for anyone holding it.
H&M owns thousands of stores and brands across the world and has been around for a century, which keeps it profitable and hard to knock out completely. But it is getting smaller on purpose: closing stores, cutting staff, and losing sales to Zara, which is faster and better at making money, and to Shein, which sells cheaper clothes online much faster. The biggest risk is that the controlling family might take the company private at a low price, which would wipe out stock gains for employees and could happen in the next two years.
Why
01
AI pressure: Shein and Temu's AI-driven trend-spotting and dynamic pricing engines. Shein and Temu use AI to spot trends and reprice by the hour, moving faster than H&M's design and buying cycle. Could AI do the core job? Unlikely.
02
Bigger players: Inditex (Zara). Zara keeps growing sales and margin faster than H&M, and the gap between the two has widened for several years running. Could a giant copy it? Yes, easily.
03
What protects it. A century of supplier relationships, 4,000+ stores across price tiers, and a controlling family willing to keep buying shares through weakness.
What would change this call
H&M's September 2026 quarterly report shows local-currency same-store sales turning positive. Would show the multi-year contraction and Inditex gap are stabilizing.
H2 2026 results reveal whether the EU's July 2026 €3 parcel fee dented Shein/Temu price competitiveness. Would show if tariff policy blunts the low-cost rivals pressuring H&M's mass segment.
Persson family (Ramsbury Invest) announces a formal take-private bid or delisting proposal. Would confirm the family is moving to exit public markets, risking a low-price shareholder cash-out.
H2 2026 results reveal whether the EU's July 2026 €3 parcel fee dented Shein/Temu price competitiveness. Would show if tariff policy blunts the low-cost rivals pressuring H&M's mass segment.
Persson family (Ramsbury Invest) announces a formal take-private bid or delisting proposal. Would confirm the family is moving to exit public markets, risking a low-price shareholder cash-out.
Key numbers
- H1 FY2026 sales down 1% in local currency
- Store count 4,038, down 600+ from 2022 peak
- Persson family holds 84.5% of voting rights
Named risks
- Persson family take-private overhang could force employee equity cash-out at a trough price.
- Western Europe sales fell 3% local currency in Q2 FY2026, core market weakness.
- Restructuring and closures (Ghlin DC, Spain, NYC) drive labor disputes and negative press.
- Tariff and cotton cost pressure could break the 54-55% normalized gross margin band.
- UK mixed-sex changing room controversy creates reputational and regulatory exposure.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| Inditex/Zara | gaining on | Inditex FY2024 sales €38.6bn vs H&M ~$22bn, widening gap noted 2025-01-29 |
| Shein | losing to | H&M joined EU lobbying against Shein's price/speed pressure, Feb 2026 |
| Temu | losing to | Prompted EU €3 low-value parcel fee response effective 2026-07-01 |
Questions people ask
- Is H&M Group profitable in 2026?
- Yes. FY2025 (ended Nov 30, 2025) net profit was SEK 12bn on SEK 228bn sales. H1 FY2026 net sales were SEK 104.4bn, down 1% in local currency, but gross margin rose to 53.8% from 52.3%, and Q2 FY2026 operating margin improved to 12.0% from 10.4%.
- Is H&M shrinking its store network?
- Yes. H&M had 4,038 stores as of May 31, 2026, down 128 year over year and over 600 stores since the 2022 peak of 4,702. Management planned roughly 170 closures versus 90 openings for 2026, per the June 24, 2026 six-month report.
- Who owns H&M Group?
- The founding Persson family controls H&M through holding company Ramsbury Invest AB, owning 67.4% of shares and 84.5% of voting rights as of May 31, 2026. The family has spent over SEK 63bn since 2016 raising its stake, including buying about $47m of shares in one week in May 2026.
- Could H&M go private?
- Possibly. DNB Carnegie analyst Niklas Ekman said in June 2025 a Persson-family buyout could happen 'as early as two years' out, given the family's rising 67.4% economic and 84.5% voting stake as of May 2026 and continued open-market buying during share-price weakness.
- Is H&M losing to Zara and Inditex?
- Analysts describe a widening gap: Inditex posted €38.6bn in FY2024 sales versus H&M's roughly $22bn, per a January 29, 2025 analysis. H&M's Q2 FY2026 sales fell 3.4% year over year while its Western Europe sales dropped 3% in local currency.
- Could AI replace H&M's business?
- Not directly. H&M's physical retail and supply chain, 4,038 stores and decades-old supplier network, are largely AI-proof. H&M itself uses AI via a Google Cloud data platform (since June 2022) and an AI 'digital twin' model campaign (March 2025), but the bigger threat is rivals' AI-driven demand-sensing production.
Timeline
- 2026-07-23H&M announces 76 NYC corporate layoffs via WARN notice, effective Sept 4, 2026
- 2026-07-01EU €3 flat fee on low-value parcels takes effect, targeting Shein and Temu
- 2026-06-29CFO Adam Karlsson describes 54-55% as H&M's normalized gross margin band
- 2026-06-24H&M publishes H1 FY2026 six-month report: sales down 1% local currency
- 2026-06-12Roughly a quarter of H&M's Greater China corporate team laid off
- 2026-05-31Q2 FY2026 results: store count 4,038, down 600+ since 2022 peak
- 2026-05-28Ghlin, Belgium distribution center closure cuts 440 jobs; Spain redundancies reduced
- 2026-05-22Ramsbury Invest buys about $47m of H&M shares in one week
- 2026-02-09H&M joins Inditex, Mango, Tendam, Primark lobbying EU against Shein and Temu
- 2025-06-06Analyst says Persson family buyout possible within about two years
Head to head
Revision history
24 July 2026
First assessed. Losing its protection. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Wikipedia H&M Group table (2026-07-23)
- H&M Six-month report 2026 (2026-06-24)
- HNNMY Q2 Earnings Call Highlights (2026-06-29)
- H&M net sales declines to Skr54.82bn in Q2 (2026-06-26)
- H&M Hennes & Mauritz Number of Employees 2026 (2026-06-29)
- Shareholders (2026-06-08)
- H&M billionaire quietly moves brand toward private ownership (2025-06-09)
- why the Persson family is buying back its own shares on a massive scale (2026-05-22)
- Top 10 Fast Fashion Companies in 2026 Ranking (2026-05-22)
- H&M's Middle Was Its Whole Strategy (2025-01-29)
- H&M Careers United States (2026-06-22)
- H&M Group navigates European labour disputes and restructuring (2026-05-28)