Swedish fashion group H&M has recorded a 40 per cent increase in its operating profit to US$523 million, with its operating margin up from 5.9 per cent to 8.6 per cent in the third quarter of this year.

The company said the improvement was driven by enhanced customer offerings, improved gross margin, and improved cost control.

The company’s gross profit was US$3.19 billion and its gross margin was 52.9 per cent, up from 51.1 per cent year-on-year.

Although the company had 4 per cent fewer stores, its sales in local currencies increased by 2 per cent compared to the same period last year.

H&M’s net sales dropped from US$6.24 billion to US$6.03 billion, negatively affected by a currency translation effect on the SEK.

“In an environment of ongoing uncertainty with cautious consumers, all of us within the H&M group are consistently focusing on our customer offering – always giving the best value for money,” said CEO Daniel Erver.

“Our strong culture, together with good cost control and flexibility, allows us to continue building a stable foundation for long-term, profitable, and sustainable growth in an increasingly complex environment, while taking additional important steps towards our ambitious sustainability goals.

H&M opened its first physical store and online store in Brazil in August, along with a new flagship in Paris’ Le Marais, with a curated offering and a new interior design concept for that location.

The brand rolled out its upgraded digital store earlier this year and is focused on updating a large part of its stores globally by improving layouts, presentation, and tech to enhance customer experience.