Category: 3. Business

This partnership now forms the backbone of our seamless operations, enabling us to meet the demands in all markets within stipulated lead times, while simultaneously maintaining quality and optimising costs.

This integrated approach has helped us streamline our supply chain processes, stay on top of demand and reduce much of the hassle associated with having multiple logistics partners.

Hello, and welcome to TechScape. If you need me after this newsletter publishes, I will be busy poring over photos from Jeff Bezos and Lauren Sanchez’s wedding, the gaudiest and most star-studded affair to disrupt technology news this year. I found it a tacky and spectacular affair. Everyone who was anyone was there, except for Charlize Theron, who, unprompted, said on Monday: “I think we might be the only people who did not get an invite to the Bezos wedding. But that’s OK, because they suck and we’re cool.”

AI companies start winning the copyright fight

Last week, tech companies notched several victories in the fight over their use of copyrighted text to create artificial intelligence products.

Anthropic: A US judge has ruled that Anthropic, maker of the Claude chatbot, use of books to train its artificial intelligence system – without permission of the authors – did not breach copyright law. Judge William Alsup compared the Anthropic model’s use of books to a “reader aspiring to be a writer.”

And the next day, Meta: The US district judge Vince Chhabria, in San Francisco, said in his decision on the Meta case that the authors had not presented enough evidence that the technology company’s AI would cause “market dilution” by flooding the market with work similar to theirs.

The same day that Meta received its favorable ruling, a group of writers sued Microsoft, alleging copyright infringement in the creation of that company’s Megatron text generator. Judging by the rulings in favor of Meta and Anthropic, the authors are facing an uphill battle.

These three cases are skirmishes in the wider legal war over copyrighted media, which rages on. Three weeks ago, Disney and NBC Universal sued Midjourney, alleging that the company’s namesake AI image generator and forthcoming video generator made illegal use of the studios’ iconic characters like Darth Vader and the Simpson family. The world’s biggest record labels – Sony, Universal, and Warner – have sued two companies that make AI-powered music generators, Suno and Udio. On the textual front, the New York Times’ suit against OpenAI and Microsoft is ongoing.

The lawsuits over AI-generated text were filed first, and, as their rulings emerge, the next question in the copyright fight is whether decisions about one type of media will apply to the next.

“The specific media involved in the lawsuit – written works versus images versus videos versus audio – will certainly change the fair use analysis in each case,” said John Strand, a trademark and copyright attorney with the law firm Wolf Greenfield. “The impact on the market for the copyrighted works is becoming a key factor in the fair use analysis, and the market for books is different than that for movies.”

To Strand, the cases over images seem more favorable to copyright holders, as the AI models are allegedly producing identical images to the copyrighted ones in the training data.

A bizarre and damning fact was revealed in the Anthropic ruling, too: the company had pirated and stored some 7m books to create a training database for its AI. To remediate its wrongdoing, the company bought physical copies and scanned them, digitizing the text. Now the owner of 7 million physical books that no longer held any utility, Anthropic destroyed them. The company bought the books, diced them up, scanned the text, and threw them away, Ars Technica reports. There are less destructive ways to digitize books, but they are slower. The AI industry is here to move fast and break things.

Anthropic laying waste to millions of books presents a crude literalization of the ravenous consumption of content necessary for AI companies to create their products.

AI and the environment: bad news

An update on last week’s stories: Trump’s phone

Two stories I wrote about last week saw significant updates in the ensuing days.

The website for Trump’s gold phone, “T1”, has dropped its “Made in America” pledge in favor of “proudly American” and “brought to life in America”, per the Verge.

Trump seems to have followed the example of Apple, which skirts the issue of origin but still emphasizes the American-ness of iPhones by engraving them with “Designed in California.” What is unsaid: Assembled in China or India, and sourced from many other countries. It seems Trump and his family have opted for a similar evasive tagline, though it’s been thrown into much starker relief by their original promise.

The third descriptor that now appears on Trump’s phone site, “American-Proud Design”, seems most obviously cued by Apple.

The tagline “Made in the USA” carries legal weight. Companies have faced lawsuits over just how many of their products’ parts were produced in the US, and the US’ main trade regulator has established standards by which to judge the actions behind the slogan. It would be extremely difficult for a smartphone’s manufacturing history to measure up to those benchmarks, by the vast majority of expert estimations.

Though Trump intends to repatriate manufacturing in the US with his sweeping tariffs, he seems to be learning just what other phone companies already know. It is complicated and limiting to make a phone solely in the US, and doing so forces severe constraints on the final product.

Read last week’s newsletter about the gold Trump phone.

… and online age checks

Last week, I wrote about Pornhub’s smutty return to France after a law requiring online age verification was suspended there. This week, the US supreme court ruled in favor of an age-check law passed in Texas. Pornhub has blocked access to anyone in Texas in protest for the better part of two years, as it did in France for three weeks. Clarence Thomas summed up the court’s reasoning:

“HB 1181 simply requires adults to verify their age before they can access speech that is obscene to children,” Clarence Thomas wrote in the court’s 6-3 majority opinion. “The statute advances the state’s important interest in shielding children from sexually explicit content. And, it is appropriately tailored because it permits users to verify their ages through the established methods of providing government-issued identification and sharing transactional data.”

Elena Kagan dissented alongside the court’s two other liberal justices.

The ruling affirms not only Texas’s law but the statutes of nearly two dozen states that have implemented online age checks. The tide worldwide seems to be shifting away from allowing freer access to pornography as part of a person’s right to free expression and more towards curtailing

Experts believe the malleable definition of obscenity – the Texas law requires an age check for any site whose content is more than a third sexual material – will be weaponized against online information on sexual health, abortion or LGBTQ identity, all in the name of child protection.

“It’s an unfortunate day for the supporters of an open internet,” said GS Hans, professor at Cornell Law School. “The court has made a radical shift in free speech jurisprudence in this case, though it doesn’t characterize its decision that way. By upholding the limits on minors’ access to obscenity – a notoriously difficult category to define – that also creates limits on adult access, we can expect to see states take a heavier hand in regulating content.”

I’ll be closely watching what happens in July when Pornhub willingly implements age checks in compliance with the Online Services Act.

Read more: UK study shows 8% of children aged eight to 14 have viewed online pornography

Read more AI news

This week in AI: new WhatsApp summaries and Nobel winners’ genomic model

New features are a dime a dozen, but even a small tweak to the most popular messaging app in the world may amount to a major shift. WhatsApp will begin showing you AI-generated summaries of your unread messages, per the Verge.

Apple tried message summaries. They did not work. The company pulled them. For a firm famed for its calculated and controlled releases, the retraction of the summaries was a humiliation. The difference between Apple and Meta, though, is that Meta has consistently released AI products for multiple years now.

In other AI news, I am rarely captivated by new technologies, but a recent release by Google’s DeepMind AI laboratory seems promising for healthcare. Google DeepMind has released AlphaGenome, an AI meant to “comprehensively and accurately predicts how single variants or mutations in human DNA sequences impact a wide range of biological processes regulating genes,” per a press release. The creators of AlphaGenome previously won the Nobel prize in chemistry for AlphaFold, a software that predicts the structures of proteins.

A major question that hovers over Crispr, another Nobel-winning innovation, is what changes in a person when a genetic sequence is modified. AlphaGenome seems poised to assist in solving that mystery.

The wider TechScape

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Invest long, borrow short and leverage up as much as possible. That is the way to make money in finance. It is how banks have always made their living. But we also know very well that this story can end in panic-stricken runs for the exit and financial crises. That is what happened in the great financial crisis (GFC) of 2007-09. Since then, as the Bank for International Settlements explains in its latest Annual Economic Report, the financial system has changed a great deal. But this central characteristic has not.

Moreover, notes Hyun Song Shin, economic adviser to the BIS, “despite the fragmentation of the real economy, the monetary and financial system is now more tightly connected than ever”. If this sounds like an accident waiting to happen, you are quite right. Central banks must be prepared to ride to the rescue.

The story the BIS tells is an intriguing one. Thus, the aftermath of the GFC did not make the system fundamentally different. It just changed who was involved. In the run-up to the crisis, the dominant form of lending was to the private sector, particularly in the form of mortgages. Afterwards, lending to the private sector levelled off, while credit to governments exploded. The pandemic accelerated that tendency.

That was not surprising: if people want to save and lend, someone else has to borrow and spend. That is macroeconomics 101. In addition to the change in direction came a change in intermediaries: in place of the big banks have come global portfolio managers. (See charts.)

As a result, cross-border bond holdings have increased enormously. What matters here are changes in gross, not net, holdings. The latter are relevant to long-term sustainability of macroeconomic patterns of saving and spending. The former are more relevant to financial stability, because they drive (and are driven by) changes in financial leverage, notably cross-border leverage. Moreover, notes Shin, “the largest increases in portfolio holdings have been between advanced economies, especially between the US and Europe”. The emerging economies are relatively less involved in this lending.

How then does this new cross-border financial system work? It has two fundamental characteristics: the leading roles of foreign currency swaps and non-bank financial intermediaries.

The biggest part of this cross-border lending consists of the purchase of dollar bonds, particularly US Treasuries. The foreign institutions buying these bonds, such as pension funds, insurance companies and hedge funds, end up with a dollar asset and a domestic currency liability. Currency hedging is essential. The banking sector plays a key role, by enabling the market for foreign exchange swaps, which provide these hedges. Moreover, a forex swap is a “collateralised borrowing operation”. Yet these do not appear on balance sheets.

According to the BIS, outstanding forex swaps (including forwards and currency swaps) reached $111tn at the end of 2024, with forex swaps and forwards accounting for some two-thirds of that amount. This is vastly more than cross-border bank claims ($40tn) and international bonds ($29tn). Moreover, the market’s largest and fastest-growing part consists of contracts with non-dealer institutions. Finally, some 90 per cent of forex swaps have the dollar on one side of the transaction and over three-quarters have a maturity of less than one year.

As the BIS notes, this highly non-transparent set of cross-border funding arrangements also affects the transmission of monetary policy. One of the propositions it makes is that the greater role of non-bank financial intermediaries, notably hedge funds “may have contributed to more correlated financial conditions across countries”. Some of this is quite subtle. Given the large-scale foreign ownership of US bonds, for example, conditions in the owners’ home markets can be transmitted to the US. Again, exchange rate movements that affect the dollar value of holdings of emerging market debts can trigger adjustments in their domestic prices.

What are the risks in this new system of finance? As has been noted, banks are active in the market for forex swaps. They also provide much of the repo financing for hedge funds speculating actively in the bond market. Moreover, according to the BIS, over 70 per cent of the bilateral repo financing from banks is at zero haircut. As a result, lenders have very little control over the leverage of the hedge funds active in these markets. Not least, non-US banks are active in providing dollar funding for firms engaged in these markets.

What does all this imply? Well, we now have tightly integrated financial systems, especially among high-income countries, even as the countries are moving apart, politically and in terms of their trade relations. Moreover, much of the funding is in dollars on relatively short maturities. It is easy to imagine conditions in which funding dries up, perhaps in response to large movements in bond yields or some other shock. As happened in the GFC and the pandemic, the Federal Reserve would have to step in as lender of last resort, both directly and via swap lines to other central banks, notably those in Europe. We assume that the Fed would indeed come to the rescue. But can that be taken for granted, especially after Jay Powell is replaced next year?

The system the BIS elucidates has much of the fragility of traditional banking, but even less transparency. We have a vast number of unregulated businesses taking highly leveraged positions, funded on a short-term basis, to invest in long-term assets whose market values may vary substantially even if their capital values are ultimately safe. This system demands an active lender of last resort and a willingness to sustain deep international co-operation in a crisis. It should work. But will it?

martin.wolf@ft.com

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• Gold prices climb as US fiscal concerns over Trump’s proposed tax bill support bullion gains.
• Fed Chair Powell comments on monetary policy at the ECB Forum, maintaining a data-dependent stance.
• XAU/USD trades near $3,350 after US ISM and JOTS data beat estimates, raising expectations for a September rate cut.

Gold prices are rallying on Tuesday as traders digest remarks from policymakers currently gathered at the European Central Bank (ECB) forum in Portugal.

Focus has been on comments from Federal Reserve Chairman Jerome Powell, who has been facing increasing pressure from US President Donald Trump to reduce interest rates in July.

Despite Fed Chair Powell’s hawkish comments and better-than-expected US economic data, which have helped limit US Dollar losses, XAU/USD continues to trade around $3,350 at the time of writing.

Fed Powell’s comments included, “As long as the US economy is in solid shape, we think that the prudent thing to do is to wait and learn more and see what those effects might be.”

So far, Powell has adhered to the cautious script, but investors are aware that this could shift quickly if the data dictates otherwise.

Additionally, Powell stated that “It’s going to depend on the data, and we are going meeting by meeting,” Powell said. “I wouldn’t take any meeting off the table or put it directly on the table. It’s going to depend on how the data evolve.”

These comments suggest that the Fed is not rushing to cut rates, increasing the potential for a September cut. With the US ISM Manufacturing and JOLTs data beating expectations, a resilient US data remains supportive of a more data-dependent Fed, limiting US Dollar losses.

Global policymakers gather at the ECB forum, a key event for Gold

The focus on Tuesday was on the European Central Bank (ECB) Forum on Central Banking, currently underway in Sintra, Portugal. This rare convergence of the world’s top central bankers offers a critical opportunity for markets to assess the direction of global monetary policy.

ECB President Christine Lagarde, Bank of Japan (BoJ) Governor Kazuo Ueda, Bank of England Governor Andrew Bailey, and Federal Reserve Chair Jerome Powell are currently speaking on monetary policy.

The joint appearance is more than symbolic. Previous Forums have triggered coordinated messaging or revealed stark divergences in policy outlooks that have moved major asset classes, including Gold, currencies, and bonds.

With central banks navigating a delicate balance between inflation control and slowing growth, any nuance in today’s remarks could set the tone for the third quarter. 

Gold daily digest market movers: XAU/USD rallies on monetary, fiscal, tariff concerns

• The ISM Manufacturing PMI is expected to print at 48.8 for June. The June data came in above expectations at 49, rising from 48.5 in May. 
• Job Openings and Labor Turnover Survey (JOLTS), where economists had expected around 7.3 million open positions as of May 31. Instead, the latest report revealed that job vacancies rose by 7.769 million, reflecting a resilient US labour market.
• President Donald Trump’s escalating criticism of Powell, including another sharply worded post on Truth Social on Monday, has raised concerns about the Fed’s independence. 
• Trump’s post read, “Jerome – You are, as usual, ‘too late.’ You have cost the USA a fortune – and continue to do so – you should lower the rate by a lot!” 
• The rhetoric has fueled speculation that Powell may either shift his tone or face replacement. 
• That prospect has pressured real yields lower and driven fresh demand for Gold as a hedge against policy uncertainty and US Dollar weakness. 
• President Trump issued a handwritten note with his signature to Fed Powell on Monday. The letter said that “Hundreds of billions of dollars are being lost! No inflation”. 
• Many now expect a shift toward looser monetary policy, which is putting downward pressure on real yields and making Gold more attractive.
• At the same time, the Trump administration’s proposed “Big Beautiful Bill,” with its estimated $3.3 trillion impact on the deficit, is sparking fears over long-term fiscal health. 
• The bill has drawn fire from across the political spectrum, including from Elon Musk and several Democratic leaders, who warn it could lead to inflation and a weaker US Dollar. Such a backdrop often prompts investors to turn to Gold as a hedge against instability and currency depreciation. The Senate is currently pushing to have the bill approved by Friday.
• With a July 9 tariff deadline fast approaching, the US is focusing on smaller, step-by-step trade deals rather than sweeping agreements, aiming to avoid triggering new tariffs. 
• While partial progress has been made with countries like the UK and China, talks with Japan and the European Union are still unsettled. The EU has shown openness to a blanket 10% tariff but is pushing for exceptions in sensitive sectors such as semiconductors and pharmaceuticals. 
• Meanwhile, President Trump has taken aim at Japan’s trade approach, especially on rice, warning that new tariffs may be imposed if no deal is reached in time.
• Trump expressed his frustration on Monday following a dispute over Japan’s reluctance to import rice from the US, which resulted in the US President stating that Japan has been “spoiled with respect to the United States of America.”
• All of this contributes to an environment where Gold looks relatively safe. Add to that the possibility of technical breakouts and increased buying interest, and it’s no surprise prices are pushing higher.

Gold technical analysis: XAU/USD bounces off trendline support, opening the potential for a retest of $3,400

After falling to trendline support from the January low on Monday, failure to gain traction below $3,250 allowed bulls to regain control of the imminent trend. With the 50-day Simple Moving Average (SMA) currently providing support for the yellow metal at $3,320, XAU/USD is now threatening a break of the 20-day SMA at $3,351. The 23.6% Fibonacci retracement of the April low-high move provides an additional barrier of resistance near $3,371.

The Relative Strength Index (RSI) is currently at 52, rising back above the neutral zone and pointing higher. This suggests a modest bullish bias. With the Gold price threatening the 20-day SMA, a clear break of $3,351 and a move above $3,371 could see prices retest the major psychological level of $3,400.

Gold (XAU/USD) daily chart

If bullish momentum fades and prices slip below $3,300, the 38.2% Fibo level could come into play at $3,292, with a deeper pullback driving Gold to the midpoint of the April move at $3,328.

Lenovo has been named a Champion in the inaugural Global Channel Leadership Matrix cementing its position as a worldwide leader in partner engagement, innovation, and sustainable channel growth.

Canalys, part of Omdia, recognized seven technology vendors  recognized seven technology vendors with Champion status for demonstrating outstanding performance and leadership in global channel ecosystems, including Lenovo alongside AWS, Dell, HPE, NetApp, Palo Alto Networks, and Schneider Electric.

This first global Matrix consolidates regional rankings from Asia Pacific, Europe Middle East and Africa, and North America into a single, worldwide assessment of 24 leading IT vendors. Vendors were required to meet robust thresholds in global revenue and channel mix, demonstrating strategic scale and commitment to partner-led go-to-market models.

Sustained Partner Excellence

Lenovo’s consistent leadership in delivering profitable growth for partners through its globally integrated Lenovo 360 framework has unified the company’s portfolio and people across devices, infrastructure, services, and solutions. With more than ~80% of Lenovo’s commercial business conducted through partners, this recognition marks a pivotal moment in the evolution of Lenovo’s channel-centric model.

“Lenovo’s strong revenue growth over the past 12 months reflects its commitment to a partner-first go-to-market strategy, with over 90% of global revenue generated through the channel and significant expansion in infrastructure and solutions, now accounting for 46% of sales,” said Alastair Edwards, Chief Analyst, Canalys (part of Omdia). “Its focus on sustainability, innovative partner programs like Lenovo 360 Circle, and tailored enablement for verticals such as AI and Education, as well as routes to market like MSPs, further solidify its leadership and momentum in the channel.”

“Being named a global Champion by Canalys is a tremendous honor and validation of our partner-centric mindset,” said Pascal Bourguet, Lenovo’s Global Channel Chief. “We’ve made long-term investments in enabling partner success, from tools that simplify selling and boost profitability to sustainability-focused initiatives like Lenovo 360 Circle. This award reflects the commitment of our global channel teams and the trust of our partners.”

Enabling the Channel of the Future

The recognition comes at a time when channel ecosystems are adapting to rapid shifts in AI, hybrid work, and sustainability priorities. Canalys recognized Champions for forward-looking strategies and partner-centric models focused on co-selling, co-development, and co-delivery.

Through Lenovo 360, partners benefit from a unified platform to build and deliver solutions across customer lifecycles, with added accelerators for as-a-service offerings and sustainability-led innovation. Since its inception, the Lenovo 360 framework has greatly simplified and reduced complexity of partner incentive programs by 63%, delivered more than 57,000 certifications and 12,000 partner accreditations through ‘learn and earn’ training opportunities, and enabled more than 54 ready-to-deploy solutions for partners across 50 markets through the Lenovo 360 Solutions Hub.

Looking ahead, Lenovo is investing in AI-driven growth across the channel with initiatives like Lenovo 360 for AI, featuring a dedicated AI curriculum and tools to help partners build and scale AI practices.

Methodology

The Canalys Channel Leadership Matrix is a comprehensive assessment framework that evaluates the channel performance of 24 IT vendors across all major technologies and regions meeting minimum revenue and channel share thresholds. It is based on their contribution to the global partner ecosystem’s success.

This evaluation relies on two primary inputs:

• Analyst Assessment: Expert scoring of vendors’ channel vision, program execution, M&A activity, portfolio competitiveness, and channel initiatives
• Ecosystem Feedback: Direct input from the partner community through interviews and ratings focused on enablement, sales engagement, and partner experience metrics

Marks & Spencer’s online business should be running “fully” within the next four weeks, its boss has said, as the retailer recovers from a damaging cyber-attack.

The hack forced the retailer to pause customer orders through its website for almost seven weeks, before resuming them last month. However, its click-and-collect services remain suspended, and the full range of clothing and homeware is not available to buy online.

Stuart Machin, the M&S chief executive, told its annual general meeting in London: “I have previously highlighted that it would take all of June and all of July, maybe into August [to resume all of its operations].”

Machin added: “Within the next four weeks we are hoping for the whole of online to be fully on.” Then the company’s focus will be on replenishing its Castle Donington warehouse in the East Midlands, the main distribution centre for its clothing and homeware.

“We’re hoping that by August we will have the vast majority of this behind us and people can see the true M&S,” Machin told shareholders.

He added: “During the incident we chose to shut things down because we didn’t want the risk of things going wrong.”

In the aftermath of the cyber-attack that brought chaos to the department store chain, M&S lost ground to fashion rivals such as Next, Zara and H&M, and has estimated a £300m hit to profits this year.

When asked about M&S losing market share to competitors, Archie Norman, the company’s chair, said this was “at the forefront of our minds”, adding: “We are going to have to win them [customers] back in the autumn.”

Machin said the retailer would use its Sparks loyalty card to try to re-engage customers, for example by offering the usual birthday treat retrospectively to customers whose birthdays had been missed.

He had been in stores every weekend and had tried to reply to as many customers as possible in writing, he added. He also admitted that M&S should improve its customer service.

Machin received £7.1m for the last financial year – which ended weeks before the hack – up nearly 40% on the £5.1m he took home a year earlier, the company said last month.

M&S was also asked whether bonuses for its bosses would be reduced after the cyber-attack. Norman said: “All of our pay is performance-related so of course the financial effect of the incident will be reflected in the bonus.”

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The company’s share price is trading about 13% lower than in mid-April, before the hack.

The Hargreaves Lansdown analyst Susannah Streeter said: “There will be high hopes that M&S can put this unfortunate chapter behind it, and the early signs are that there is pent-up demand, particularly for its summer styles, with many of the popular products sold out online.

“Its strong set of annual results showed the retailer was in a resilient position before the cyber-attackers infiltrated systems. Sales growth in the fashion and home and beauty division reflected improved customer perceptions of value, quality and style. Demand for M&S food remains robust, with increased volumes driving growth.”

All resolutions were passed by shareholders at the hybrid meeting, which was held in person in London as well as online, apart from one brought by campaign group ShareAction. The resolution was not supported by the board but received the backing of 30.7% of investors. It asked M&S to disclose information about its approach to pay for contracted staff, as well as a cost-benefit analysis of setting the real living wage across its workforce.

The company said all its employees were “paid the living wage or above and we attach great importance to ensuring that subcontracted employees are appropriately paid and treated as part of the M&S family”.

Press release

1 July, 2025

Second quarter (1 March 2025 – 31 May 2025)

• Sales in local currencies increased by 1 percent in the second quarter, with 4 percent fewer stores at the end of the quarter compared with the same point in time last year. Excluding these closures, sales increased by 3 percent. Converted into SEK, net sales amounted to SEK 56,714 m (59,605). Net sales in SEK were negatively affected by a currency translation effect of around 6 percentage points due to the strengthened Swedish krona.
• Gross profit amounted to SEK 31,425 m (33,569), which corresponds to a gross margin of 55.4 percent (56.3). The gross margin was negatively affected mainly by external factors such as a more expensive US dollar and high freight costs, which increased the cost of purchasing for the second quarter, but also by the company’s investments in the customer offering. The external factors that had a negative impact on purchasing in the first half of the year are turning positive for the second half of the year.
• Selling and administrative expenses amounted to SEK 25,489 m (26,446). In local currencies these expenses increased by 2 percent.
• Operating profit amounted to SEK 5,914 m (7,098), corresponding to an operating margin of 10.4 percent (11.9). The decrease in operating profit was mainly attributable to the lower gross margin and negative currency translation effects.
• The result after tax amounted to SEK 3,962 m (5,064¹), corresponding to SEK 2.48 (3.15¹) per share.
• Cash flow from operating activities amounted to SEK 8,528 m (12,600). Cash and cash equivalents plus undrawn credit facilities were SEK 35,828 m (42,572).
• The composition of the stock-in-trade is good. During the quarter the stock-in-trade developed in a positive direction with a significantly lower growth rate of 1 percent compared to the first quarter’s increase of 11 percent in local currencies. At the end of the second quarter the volume of goods was lower than at the same point in time last year. Higher purchasing costs explain the increase in stock-in-trade compared with the previous year.

First half-year (1 December 2024 – 31 May 2025)

• In local currencies net sales increased by 1 percent in the first half of the year. Converted into SEK, the H&M group’s net sales amounted to SEK 112,047 m (113,274).
• Gross profit amounted to SEK 58,594 m (61,224). This corresponds to a gross margin of 52.3 percent (54.0).
• Selling and administrative expenses amounted to SEK 51,427 m (52,010). In local currencies these expenses increased by 1 percent compared with the previous year.
• Operating profit amounted to SEK 7,117 m (9,175), corresponding to an operating margin of 6.4 percent (8.1). The decrease in operating profit was attributable in full to the lower gross margin, which was negatively affected by external factors such as a more expensive US dollar and higher freight costs, but also by markdowns and investments in the customer offering.
• The result after tax amounted to SEK 4,541 m (6,295¹), corresponding to SEK 2.85 (3.91¹) per share.
• Cash flow from operating profit amounted to SEK 12,729 m (16,567).
   
• The H&M group’s sales in the month of June 2025 are expected to increase by 3 percent in local currencies compared with the same month the previous year. The sales increase of 3 percent is impacted by a negative calendar effect of around one percentage point.
• Environmental organisation Stand.earth rated the H&M group as the best company in the fashion industry for the group’s work to phase out fossil fuels. The H&M group gained the highest overall score among leading brands in the fashion industry for its climate efforts.
• The annual general meeting on 7 May 2025 resolved to authorise the board to decide on buybacks of the company’s own class B shares in the period up to the 2026 annual general meeting for the purpose of adjusting the company’s capital structure and enabling purchases of shares for the company’s share-based incentive program. The board of directors has made the decision to buy back the company’s own class B shares to ensure the delivery of class B shares to the participants in the company’s long-term incentive program (LTIP). The cumulative number of shares that can be purchased is 1,100,000 shares, for a maximum cumulative amount of SEK 175 m.
• H&M is opening its first stores and online in Brazil, a country with a population of more than 200 million, early in the second half of 2025.

“Our plan, with its focus on the product offering, the shopping experience and brand, is again confirmed by the progress we see. The positive development in important areas such as online, H&M womenswear and H&M Move, as well as continued focus on good cost control, will contribute to a profitable sales development,” says Daniel Ervér, CEO.

1. See note 5.

Comments by Daniel Ervér, CEO
 
Our plan, with its focus on the product offering, the shopping experience and brand, is again confirmed by the progress we see. The positive development in important areas such as online, H&M womens-wear and H&M Move, as well as continued focus on good cost control, will contribute to a profitable sales development.

Sales in local currencies increased by 1 percent in the second quarter, with 4 percent fewer stores at the end of the quarter compared with the same point in time the previous year. Excluding these closures, sales increased by 3 percent. Moreover, the quarter is to be seen in light of the fact that the second quarter of 2024 was a strong quarter with a sales increase of 3 percent.

The quarter’s result was negatively affected by higher purchasing prices as a result of a more expensive US dollar and higher freight costs, but also by the fact that we have continued to invest in the customer offering. Investments made to strengthen our customer offering and give customers even more value for money. The negative external factors that increased the costs of purchasing for the first half of the year are turning positive for the second half of the year.

Our plan, with its focus on the product offering, the shopping experience and the H&M brand, is confirmed by the progress we see in key parts of the business. With the customer offering at the centre, we have further strengthened the organisation’s focus on product and customer experience. The improvements implemented in online, H&M womenswear and H&M Move, together with increased product availability and closer collaboration with our suppliers, have continued to bring positive results. Portfolio brands also grew in the quarter and COS has developed particularly well. Some measures have a faster impact than others, but the direction is clear and during the year we continue to implement improvements in other parts of the business.

Our upgraded digital store is now rolled out and the response from customers is positive. In our omni-model we continue to integrate our physical and digital sales channels that complement and strengthen each other. We also continue to expand in growth markets. We look forward to opening both online and physical stores in Brazil in the second half of the year, and taking H&M’s business concept – fashion and quality at the best price in a sustainable way – to a country that has a population of more than 200 million and a great interest in fashion.

The integration of sustainability into our daily operations continues to deliver results. The climate and environmental organisation Stand.earth ranks H&M as number one among 42 fashion companies in terms of reducing climate impact. 

In uncertain times with cautious consumers we monitor macroeconomic and geopolitical developments closely and continuously adapt both the customer offering and the business to meet our customers’ needs in the best way. We continue to strengthen the product offering and the experience both online and in our stores. With a clear plan, a strong financial position, good cost control and committed employees, we see good opportunities for long-term, sustainable and profitable growth.
 

Communication in conjunction with the six-month report
 
The six-month report, i.e., 1 December 2024 – 31 May 2025, will be published at 08:00 CEST on 26 June 2025, followed by a combined press and telephone conference at 09:00 CEST for the financial market and media, hosted by CEO Daniel Ervér, CFO Adam Karlsson and Head of IR Joseph Ahlberg. A presentation of the report followed by a Q & A session will be held in English.

Location: H&M’s head office in Stockholm, Mäster Samuelsgatan 49, 3rd floor, Ljusgården. The event will be broadcasted online and questions can also be asked by telephone. For log in details please register: https://app.webinar.net/vwELGVnGex6 
 
To book interviews for media in conjunction with the full-year report on 26 June 2025, please contact: Anna Frosch Nordin, Head of Media Relations, telephone +46 73 432 93 14, anna.froschnordin@hm.com.

Please note that the combined press and telephone conference starts at 09:00 CEST. Also note that there will not be a separate telephone conference in the afternoon CEST.

Contact

H & M Hennes & Mauritz AB (publ)
SE-106 38 Stockholm
Phone: +46 8 796 55 00, e-mail: info@hm.com
Registered office: Stockholm, Reg. No. 556042-7220

For more information about the H&M group visit hmgroup.com.

Information in this interim report is that which H & M Hennes & Mauritz AB (publ) is required to disclose under the EU Market Abuse Regulation (EU) No 596/2014. The information was submitted for publication by the abovementioned persons at 08:00 (CEST) on 26 June 2025. This interim report and other information about the H&M group are available at hmgroup.com.
 
H & M HENNES & MAURITZ AB (PUBL) was founded in Sweden in 1947 and is listed on Nasdaq Stockholm. H&M’s business idea is to offer fashion and quality at the best price in a sustainable way. The group’s brands are H&M (including H&M HOME, H&M Move and H&M Beauty), COS, Weekday (including Cheap Monday and Monki), & Other Stories, ARKET, Singular Society and Sellpy. The group also includes several ventures. For further information, visit hmgroup.com.