By Sales Figures
Hennes & Mauritz (H&M), the popular Swedish fashion retailer, has just released its results for the fiscal third quarter. The company reported a 6% increase in sales compared to the previous year, amounting to 60.9 billion kronor ($5.54 billion). While net sales remained relatively flat in local currencies during the period ending on August 31st.
Impressive Net Profit Growth
H&M’s net profit for the third quarter amounted to SEK3.33 billion, a significant improvement from the SEK531 million recorded the previous year. Analysts had estimated a net profit of SEK3.23 billion. It’s worth noting that last year’s earnings were impacted by a one-time cost of SEK2.1 billion related to the winding down of its Russian operations.
Key Observations
Margin Boost
H&M showcased an impressive operating margin of 7.8% in the third quarter, a substantial increase from the 1.6% reported last year. The company attributed this positive outcome to its margin, cost and efficiency program, as well as its effective operational cost control.
Favorable External Factors
Throughout the year, external factors affecting the purchase of goods have gradually improved. As a result, H&M expects a positive impact on its fourth-quarter sales, considering the favorable external factors compared to the previous year.
H&M’s strong performance in the fiscal third quarter signals its continued growth and ability to adapt to changing market conditions. With increased sales and net profit figures, the company remains well-positioned in the fashion industry.
H&M Reports Sales Decline and Targets Cost Savings
H&M, the popular fashion retailer, has announced that it expects a 10% decrease in sales in September due to the unusually hot weather, causing customers to delay their purchases of autumn clothing. Additionally, the company’s decision to exit the Russian market this year has also impacted its sales. The discontinued operations in Russia alone account for four percentage points of the decrease.
Looking ahead, H&M has set ambitious targets, aiming for SEK2 billion in annual cost savings and a 10% operating margin by 2024. CEO Helena Helmersson expressed confidence in the ongoing cost and efficiency program, highlighting its potential impact in the coming quarters. She emphasized that their customer-centric approach, improved cash flow, and increased inventory efficiency will contribute to achieving the operating margin goal.
While H&M plans to open approximately 100 new stores by 2023, it also anticipates closing around 200 stores. The majority of store openings will focus on growth markets, while closures will primarily occur in established markets. As of August 31, the H&M group operated a total of 4,375 stores.
Overall, H&M acknowledges the challenges it faces but remains determined to achieve its targets by implementing strategic measures and adapting to evolving market conditions.
Comments