Is H&M profitable in 2026?

Yes. H&M posted FY2025 net profit of SEK 12bn on SEK 228bn (~$24.5bn) net sales as of 2025-11-30. Q2 FY2026 adjusted operating margin was 12.0%, though operating profit missed consensus (SEK 5.91bn vs SEK 6.38bn expected) as of 2026-06-25 due to restructuring charges.

The founding Persson family controls H&M through Ramsbury Invest, holding 67.39% of total shares and 84.49% of voting rights as of 2026-05-31, up from about 35.5% in 2016 after spending over SEK 63 billion (~$6.6bn) buying stock.

Is H&M losing market share to Shein?

Yes. Third-party tracking showed H&M's global fast-fashion share fell 0.6 points in 2025 while Shein gained 1.1 points. In Germany, Shein overtook Zalando as top wallet-share brand in online fashion by mid-2026, at 41.4% versus Zalando's 37.0% as of 2026-06-30.

Could AI replace H&M's workforce or business model?

Not entirely. H&M rolled out AI-generated 'digital twin' models with Swedish firm Uncut from March to July 2025, covering 30 real models, which cuts photography costs but hasn't shown top-line financial impact. Its 4,000+ physical stores and supplier network remain largely untouched by AI as of mid-2026.

Is it risky to join H&M right now given layoffs?

There is real restructuring risk. H&M closed over 600 stores since 2022, including 128 between May 2025 and May 2026, and average FTE headcount fell from 101,103 in FY2023 to 94,744 in FY2025, with a Belgium distribution center closing in autumn 2026 cutting about 440 jobs.

Who is H&M's biggest competitor?

Inditex (Zara) remains the dominant incumbent, generating roughly 70-72% of Inditex's 2025 sales (~€28bn) from Zara alone and losing only 0.3 share points in 2025 versus H&M's 0.6. Shein is the faster-growing threat, gaining 1.1 points of global fast-fashion share in 2025.

Consumer brands · Sweden

H&M

hm.com ↗

Swedish fast-fashion retailer selling cheap trend clothing through stores and online worldwide.

Protection under test

Assessed 23 July 2026 · Evidence as of 23 July 2026

Something worth protecting exists and is being tested right now.

On the recordSince 23 July 2026 · Checkable from September 2026 · Every call on the record Checkpoint: Q3 FY2026 earnings report

The call

H&M is shrinking its way to stability while Shein and Zara both grow faster, with a digital overhaul still unproven and due only in late 2026.

H&M owns thousands of stores worldwide and makes money, but it is losing customers to Zara, which moves faster and keeps better profit, and to Shein, which sells clothes so cheap that it pulls money away from H&M's wallet. The stores and supplier connections H&M has built up are real advantages, but they are not enough to stop the shift, especially since H&M's promised digital overhaul is not yet finished. The key thing to watch is whether Shein continues taking market share in places like Germany; if it does and H&M's sales fall faster than they have been, the company will have to cut costs deeper and may never catch up.

Why

AI pressure: None apparent. AI is not eating H&M directly, but Shein and Zara both use AI-driven demand forecasting to move faster than H&M can. Could AI do the core job? Only partly.

Bigger players: Shein and Inditex/Zara. Shein grew fast-fashion share by 1.1 points in 2025 while H&M lost 0.6, and Zara lost only 0.3, both outrunning H&M on price and speed. Could a giant copy it? Yes, easily.

What protects it. A profitable global store and supplier network worth SEK 228bn in sales, plus Persson family control that buys time to restructure without panic.

What would change this call

H&M's Q3 FY2026 earnings report (expected September 2026) shows Western Europe like-for-like sales trend. Would show whether the sales decline is stabilizing or deepening.
Future German online wallet-share reports track Shein's percentage against H&M and Zalando. Would show whether Shein's share gains continue, plateau, or reverse.
H&M's planned H2 2026 digital-infrastructure rollout for demand-planning ships and reports results. Would show whether the digital turnaround executes on schedule or slips further.

Key numbers

Shein 41.4% vs Zalando 37.0% German wallet share (2026-06-30)
H&M lost 0.6 pts fast-fashion share in 2025 (2025-12-31)
600+ stores closed since 2022, 128 in past year (2026-05-31)

Named risks

Continued market-share erosion to Shein and Zara without a stabilizing catalyst. Severity: high
Execution risk from ongoing store closures, headcount cuts and European labor disputes. Severity: medium
Operating profit misses versus consensus tied to restructuring charges. Severity: medium
Ownership uncertainty from Persson family's rising stake and take-private speculation. Severity: low
Legal exposure from patent-infringement claims (e.g., Alpha Modus, reported Dec 2025). Severity: low

Rivals, as read in July 2026

Rival	Direction	Evidence
Inditex/Zara	gaining on	Zara lost only 0.3 share points in 2025 vs H&M's 0.6 point loss, per 2025-12-17 tracking
Shein	gaining on	Gained 1.1 global share points in 2025 and topped Zalando 41.4% vs 37.0% in Germany by 2026-06-30
Zalando	contesting	Both losing German online wallet share to Shein as of mid-2026, competing for same value shoppers
Temu	contesting	Litigation with Shein over copyright (London High Court, 2026) reflects broader ultra-fast-fashion pressure
Uniqlo	gaining on	Reported growing faster than H&M/Zara in India during FY24, per industry commentary

Questions people ask

Is H&M profitable in 2026?: Yes. H&M posted FY2025 net profit of SEK 12bn on SEK 228bn (~$24.5bn) net sales as of 2025-11-30. Q2 FY2026 adjusted operating margin was 12.0%, though operating profit missed consensus (SEK 5.91bn vs SEK 6.38bn expected) as of 2026-06-25 due to restructuring charges.
Who owns H&M?: The founding Persson family controls H&M through Ramsbury Invest, holding 67.39% of total shares and 84.49% of voting rights as of 2026-05-31, up from about 35.5% in 2016 after spending over SEK 63 billion (~$6.6bn) buying stock.
Is H&M losing market share to Shein?: Yes. Third-party tracking showed H&M's global fast-fashion share fell 0.6 points in 2025 while Shein gained 1.1 points. In Germany, Shein overtook Zalando as top wallet-share brand in online fashion by mid-2026, at 41.4% versus Zalando's 37.0% as of 2026-06-30.
Could AI replace H&M's workforce or business model?: Not entirely. H&M rolled out AI-generated 'digital twin' models with Swedish firm Uncut from March to July 2025, covering 30 real models, which cuts photography costs but hasn't shown top-line financial impact. Its 4,000+ physical stores and supplier network remain largely untouched by AI as of mid-2026.
Is it risky to join H&M right now given layoffs?: There is real restructuring risk. H&M closed over 600 stores since 2022, including 128 between May 2025 and May 2026, and average FTE headcount fell from 101,103 in FY2023 to 94,744 in FY2025, with a Belgium distribution center closing in autumn 2026 cutting about 440 jobs.
Who is H&M's biggest competitor?: Inditex (Zara) remains the dominant incumbent, generating roughly 70-72% of Inditex's 2025 sales (~€28bn) from Zara alone and losing only 0.3 share points in 2025 versus H&M's 0.6. Shein is the faster-growing threat, gaining 1.1 points of global fast-fashion share in 2025.

Timeline

2026-07-14Shein overtakes Zalando as top wallet-share brand in German online fashion, 41.4% vs 37.0%
2026-06-29Report confirms H&M closed 600+ stores since 2022, footprint down to ~4,038-4,101
2026-06-25H&M Q2/H1 FY2026 report: sales flat to down 1% local currency, adjusted operating margin 12.0%
2026-05-31Persson family holds 67.39% of shares, 84.49% of voting rights
2026-05-28Ghlin, Belgium distribution center closure and Spain redundancy deal reported
2026-05-01Diego Teijeiro Ruiz, ex-Inditex, joins H&M as Chief Information Officer
2025-12-17H&M global fast-fashion share falls 0.6 points in 2025 as Shein gains 1.1 points
2025-07-02H&M publicly launches AI-generated digital twin models with Uncut
2024-01-31Daniel Ervér becomes President and CEO, succeeding Helena Helmersson

Revision history

23 July 2026

First assessed. Protection under test. The text above is fixed as of this date and is not edited afterwards.

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