H&M reports a sales increase

The Sweden-based group reported a net sales growth of 12% in the three months to the 28th of February, as compared to the same period of last year, but March sales were below expectations

“The H&M group continues tostand strong with a robust financial position, stable cash flow and a well-balanced inventory. The start of the year shows that we have taken further steps towards the goal of achieving an operating margin of 10 percent already next year”, commented Helena Helmersson, CEO of H&M.

First Quarter Results

In the first quarter of fiscal 2023, which ended on the 28^thof February, the fashion group’snet salesincreased by 12%, or 3% in local currencies, totalling 54.87 billion Swedish kronor (4.85 billion euros), on a comparable basis to the same period last year. H&M pointed out thatexcluding the impact of Russia, Belarus and Ukraine, its net sales grew by 16% or 7% in local currencies.

The company also reported agross marginof 47.2% in the first three months of the current fiscal year, as compared to the gross margin of 49.3% recorded in a similar quarter of the prior year. “High raw materials and freight costs combined with a strong US dollarhad a very negative impact on purchases made in the first quarter when compared with the previous year”, added H&M in the statement.

Moreover, from December 2022 to February 2023, the group’soperating profitamounted to 725 million Swedish kronor (64.1 million euros), which corresponds to anoperating marginof 1.3%, on a comparable basis to the operating profit and margin of 458 million Swedish kronor (40.5 million euros) and 0.9%, respectively, registered in the first quarter of the prior fiscal year.

In the first quarter of the current financial year, H&M’sprofitamounted to 540 million Swedish kronor (47.7 million euros), as compared to theprofit of 217 million Swedish kronor (19.2 million euros) reached in the same period of fiscal 2022.

March Outlook

The Sweden-based fashion groupis expecting sales in local currencies to growby 4% in March, year-over-year, highlighting that “the start of the spring season has been delayed in many important markets as a result of cold weather, but spring collections have been well received where the weather has warmed up”.