- Prachi Singh |
For the nine months to August 31, 2018, sales including VAT at Hennes & Mauritz AB (H&M) increased by 3 percent to 178,817 million Swedish krona (20,242 million dollars), while sales excluding VAT amounted to 153,986 million Swedish krona (17,431 million dollars), also an increase of 3 percent. In local currencies, sales including VAT increased by 1 percent. For the third quarter, the group’s sales including VAT increased by 9 percent to 64,800 million Swedish krona (7,335.6 million dollars), while sales excluding VAT amounted to 55,821 million Swedish krona (6,318 million dollars), an increase of 9 percent. In local currencies, sales including VAT increased by 4 percent.
Commenting on the results and way ahead, Karl-Johan Peon, H&M’s CEO said in a statement: “The rapid changes in the fashion industry are continuing and the H&M group is in an exciting transitional period. Our transformation work has contributed to a gradual improvement in sales development with increased market share in most markets during the third quarter, particularly in Germany, Sweden, Eastern Europe, Russia and China. We are continuing to optimise the store portfolio in order to accommodate customers’ changed shopping patterns in the ongoing shift online. In the year to date this has meant a lower net addition of new stores within the group.”
Review of H&M’s performance
The company said, ongoing transition has contributed to gradually improved sales and increased market share in most markets. The group’s online sales increased by 32 percent during the third quarter.
Profit after financial items, for the nine month period amounted to 11,287 million Swedish krona (1,277.5 million dollars) and the group’s profit after tax amounted to 9,109 million Swedish krona (1,031 million dollars) compared to 12,191 million Swedish krona (1,380 million dollars), corresponding to 5.50 Swedish krona compared to 7.37 Swedish krona per share last year.
Gross profit for the third quarter amounted to 28,091 million Swedish krona (3,181 million dollars, corresponding to a gross margin of 50.3 percent against 51.4 percent last year. Profit after financial items amounted to 4,012 million Swedish krona (454 million dollars) compared to 5,016 million Swedish krona (568 million dollars) last year. The group’s profit after tax amounted to 3,099 million Swedish krona (351 million dollars) against 3,837 million Swedish krona (434.6 million dollars), corresponding to 1.87 Swedish krona compared to 2.32 Swedish krona per share.
The company added that problems that arose during the implementation of new logistics systems in the US, France, Italy and Belgium during the spring resulted in sales in these markets decreasing by 8 percent overall, while overall sales for the other 66 markets increased by 8 percent in local currencies during the quarter.
Other highlights of the period under review, included, successful launch of the new brand, Afound, both in stores and online in Sweden, positive response to H&M seen in Ukraine, announcement concerning launch of COS online in China and on Tmall in autumn 2018. The company further said that Uruguay will become a new H&M store market in autumn 2018.
Picture credit:H&M media centre