Fast-fashion giant H&M reveals 2nd quarter profits and it’s better than expected

H&M reported a slightly stronger second-quarter profit, which was an encouraging sign for CEO Daniel Erver's efforts to attract more shoppers with trendier clothes. The company's shares rose 4% as investors focused on the profit rather than the slight decline in sales. Erver emphasized that his focus is on profitability rather than solely sales growth. H&M expected sales in June to rise 3% in local currencies, an improvement from the 6% fall in the same period last year. The company's collections have been well-received by customers, with gingham and check patterned dresses and accessories being particularly popular. However, Erver noted that consumer sentiment has dropped in the US due to the tariffs situation, and competitors have started raising prices as a result. H&M is focused on keeping prices competitive, as consumers are particularly price-sensitive given the economic uncertainty. The company's sales were 56.7 billion Swedish crowns, down from 59.6 billion a year ago, but its operating profit was 5.91 billion crowns, beating analysts' forecasts. Erver flagged more discounting in the next quarter, citing highly competitive summer markdowns across the market. Despite this, H&M is searching for growth in new markets with a growing middle class, with plans to open stores in Brazil, El Salvador, Venezuela, and Paraguay.