H&M Group, the Swedish fashion conglomerate, has announced a 3% increase in net sales for the second quarter, totalling SEK 59.6bn (£4.5bn).
- The company’s gross profit jumped by 11% to SEK 33.6bn (£2.6bn) between 1 March and 31 May while operating profit surged by 50%.
- H&M’s operating margin improved significantly to 11.9%, up from 8.2% in the previous year.
- Despite these gains, June sales are projected to decrease by 6% year-on-year, attributed to adverse weather conditions.
- New CEO Daniel Ervér remains committed to achieving an operating margin goal of 10% amid mounting external challenges.
The Swedish fashion giant, H&M Group, has reported a 3% increase in net sales for the second quarter, amounting to SEK 59.6bn (£4.5bn). This growth reflects the company’s strong financial position and shows promise for sustained profitability.
During the period from 1 March to 31 May, H&M recorded a gross profit rise of 11% to SEK 33.6bn (£2.6bn) and a substantial 50% increase in operating profit, reaching SEK 7.1bn (£530m). The operating margin saw an impressive improvement, standing at 11.9%, compared to 8.2% during the same timeframe last year, highlighting the company’s enhanced operational efficiency.
However, the company anticipates a 6% drop in sales for June in local currencies, primarily due to robust comparative figures from the previous year and unfavourable weather in key markets. H&M noted that while adverse weather impacted sales at the start of the month, conditions normalised towards the end, contributing to a recovery in performance. The spring and summer collections have generally been well-received, mitigating some of the sales shortfall.
CEO Daniel Ervér, who took charge on 31 January, expressed satisfaction with the second quarter results, stating, “We achieved our best results for many years in the second quarter, showing once more the H&M group’s strength and robust financial position, with strong cash flow as well as improved profitability and sales.” Despite facing challenges such as inflationary pressures on materials and currency fluctuations, Ervér is optimistic about reaching the 10% operating margin target for the fiscal year 2024. He emphasised a renewed focus on enhancing the brand and improving customer experience as key factors in the company’s strategy for sustainable growth.
H&M Group remains optimistic about future growth despite facing challenges such as fluctuating weather and external economic pressures.
