In the first quarter the H&M group’s net sales in SEK increased by 12 percent to 54,872 million Swedish krona. In local currencies the increase was 3 percent.
Excluding Russia, Belarus and Ukraine, the company said, the increase was 16 percent in SEK and 7 percent in local currencies.
Operating profit amounted to 725 million Swedish krona compared to 458 million Swedish krona, corresponding to an operating margin of 1.3 percent, boosted by consolidating the earnings of its Sellpy second-hand platform.
“The H&M group continues to stand 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,” said Helena Helmersson, CEO of H&M in a statement.
H&M’s consolidates second-hand platform Sellpy into the group
Sellpy, a European second-hand platform, the company added, is being consolidated into the H&M group from the first quarter.
“Ten years ago we began investing in Sellpy, which in a short time has become one of Europe’s largest second-hand platforms. Now we are consolidating the company into the group, which visualises its value and generates a remeasurement effect of around 1 billion Swedish krona in the quarter. We have more than 25 other promising companies in our portfolio such as Renewcell, TreeToTextile and Smartex, to name just a few,” added Helmersson.
Sales for portfolio brands in the first quarter increased by 19 percent in SEK and by 11 percent in local currencies. Stock-in-trade decreased by 16 percent currency-adjusted compared with the previous year.
Gross margin for the quarter was 47.2 percent compared to 49.3 percent in the same quarter last year. Result after tax was 540 million Swedish krona, corresponding to 0.33 Swedish krona per share.
H&M expects March sales to increase by 4 percent
For the period from March 1 to March 31, 2023 sales in local currencies are expected to increase by 4 percent compared with the same period last year.
The company said that the start of the spring season has been delayed in many important markets as a result of cold weather. The spring collections have been well received where the weather has warmed up.
Commenting on the outlook, Helmersson said: “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.”
At the annual general meeting to be held on May 4, 2023, the board’s proposed ordinary dividend of 6.50 Swedish krona per share, to be paid in two instalments and the authorisation allowing it to buy back the group’s own B shares in the period up to the 2024 annual general meeting for a maximum of 3 billion Swedish krona, will be discussed.