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H&M Group

Three key strategic areas, Long-term growth

Liberating fashion for the many
H&M Group’s purpose

Three key strategic areas

H&M Group sold SEK 228 billion of fashion in 2025 through about 4,100 stores and online, with sales up 2% in local currencies and an operating margin of 8.1%, below its long-term target of more than 10%. Its business idea is fashion and quality at the best price in a sustainable way, and its strategy rests on three key areas: an elevated product offering, an improved shopping experience, and development of its brands.

An elevated product offering

Products centred on fashion and quality.

  1. 1Trends and insightCatch trends and customer insight quickly, with simpler internal structures and closer work with suppliers.
  2. 2Nearshoring and RFIDMake more products closer to customers, and use RFID tags, to meet demand faster.
  3. 3Buying in seasonRaise the share of purchasing done in season, to meet demand for fashion and quality at the best price more quickly.

September 2026Gross margin rose to 54.0% in the third quarter of 2026, from 52.9%, including about 1.6 points of one-time effects from tariffs.

September 2026The operating margin over twelve months reached 9.0% in August 2026, from 7.2%, which H&M puts down to purchasing, cost control, and more efficient operations.

H&M Group aims for at least 10% sales growth a year and an operating margin above 10%

Its third long-term target is to cut its greenhouse gas emissions by 56% by 2030, against 2019, in its own operations and across its value chain. It reports on all three each year.

Sales growth: at least 10% a year, in local currencies

246810
Target 10
220250First nine months of 2026

Operating margin: more than 10%

246810
Target 10
8.120259Twelve months to August 2026

Cut in greenhouse gas emissions: by 2030, 56% against 2019

1020304050
Target 56
41Own operations, 202534.6Value chain, 2025

91% of the materials in H&M Group’s products in 2025 were recycled or sustainably sourced

Its target is 100% by 2030. Recycled materials alone made up 32%, ahead of a target of 30% for 2025.

  • 32%Recycled
  • 59%Other sustainably sourced
  • 9%Other materials

RecycledSustainably sourcedOther

Each stitch is 1% of the materials. The share of other sustainably sourced materials is worked out from the two shares H&M reports.

  1. Put the targets where the plan can be checked.

    H&M Group has three long-term targets and reports against all three every year: sales growth of at least 10% a year, an operating margin above 10%, and a 56% cut in greenhouse gas emissions by 2030. In 2025 sales grew 2% and the margin was 8.1%, and it set both beside the targets. We recommend publishing the few numbers a strategy will be judged on, and showing the gap each year, because a target nobody reports against stops steering anything.

  2. Separate what you do from what helps you do it.

    H&M names three key strategic areas, product, shopping experience, and brands, and four shared enablers beneath them: people and leadership, AI and data, integrated sustainability, and resource efficiency. We recommend keeping enablers out of the list of pillars, so that the pillars stay about what customers notice.

  3. Shrink the estate to grow the business.

    H&M Group had 152 fewer stores at the end of 2025 than a year before and kept closing stores in 2026, while it upgraded others and moved more sales online. We recommend treating stores, branches, or offices as a portfolio to manage, closing some to make the rest better, rather than counting more locations as success.

Sources

  1. 1. H & M Hennes & Mauritz AB (2026). Annual and Sustainability Report 2025. Annual report, March 2026. hmgroup.com
  2. 2. H & M Hennes & Mauritz AB (2026). Nine-month report 2026. Quarterly report, September 2026. hmgroup.com

Headwater is not connected with H & M Hennes & Mauritz AB. H&M, COS, Weekday, Monki, & Other Stories, ARKET, and Sellpy are trade marks of their owners. Updated 5 October 2026.

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