By Brazil Stock Guide – H&M Hennes & Mauritz AB (HM-B.ST) is accelerating its expansion in growth markets, highlighting Brazil as a strategic priority after posting stronger-than-expected profit results for fiscal 2025. The Swedish apparel group said it has seven new stores contracted to open in Brazil, following the launch of four locations already operating in the country.
The first of the new Brazilian stores is scheduled to open in Rio de Janeiro, reinforcing the company’s brick-and-mortar presence alongside its digital strategy. The move is part of a broader push across Latin America, where H&M has been increasing investment amid shifting global consumer demand.
Beyond Brazil, the retailer said Paraguay will become a new market for the group later this year. H&M also plans to begin online operations in Ukraine during the first quarter, extending its e-commerce footprint in Eastern Europe.
In the fourth fiscal quarter, operating profit rose to 6.36 billion Swedish kronor ($719 million), up from 4.62 billion kronor a year earlier and above market expectations. Sales for the period fell 4.8% to 59.22 billion kronor, slightly below forecasts, but margins improved as the company tightened cost controls.
Gross margin increased to 55.9% from 54.6% a year earlier, supported by a 12% reduction in inventories. H&M attributed the decline in stock levels to a more flexible and efficient supply chain and a higher share of in-season purchasing.
Looking ahead, the company said new logistics centers in Europe are set to come online starting in 2026, aimed at improving product availability across both physical stores and digital channels.
For the start of the new fiscal year, H&M warned that sales between December and January are expected to decline about 2% in local currencies, citing seasonal effects and a strong Black Friday at the end of November. The group also said the impact of tariffs and a stronger Swedish krona is likely to weigh more heavily on margins in the first quarter of 2026.