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H&M reports drop in full year sales and profit

By Prachi Singh

29 Jan 2021

The H&M group’s net sales amounted to 187,031 million Swedish krona in the 2020 financial year. In local currencies, net sales decreased by 18 percent. The company said, sales development was significantly negatively affected by the pandemic, particularly in the second quarter when stores were temporarily closed in most markets; at the most, approximately 80 percent of the group’s stores were closed.

Gross profit amounted to 93,544 million Swedish krona, corresponding to a gross margin of 50 percent. Profit amounted to 2,052 million Swedish krona, while profit after financial items amounted to 1,691 million Swedish krona. The group’s profit after tax amounted to 1,243 million Swedish krona, corresponding to 0.75 Swedish krona per share.

“The H&M group stands strong after all the challenges brought by the pandemic. Thanks to much-appreciated collections, rapid and profitable online growth and strict cost control, the company succeeded in ending the year in profit and in a strong financial position,” said Helena Helmersson, H&M CEO in a statement.

H&M posts 10 percent drop in Q4 sales

In the fourth quarter, the company reported net sales of 52,549 million Swedish krona, corresponding to a 10 percent decrease in local currencies. The company added that a strong recovery at the start of the quarter was significantly slowed when the second wave of the pandemic again led to extensive new restrictions and lockdowns.

Gross profit for the quarter amounted to 27,375 million Swedish krona, which corresponds to a gross margin of 52.1 percent. Profit after financial items amounted to 3,665 million Swedish krona, while profit after financial items amounted to 3,538 million Swedish krona. The group’s profit after tax amounted to 2,485 million Swedish krona, corresponding to 1.50 Swedish krona per share.

As a result of the second wave of the pandemic and the associated restrictions and temporary closure of, at the most, more than 1,800 stores, i.e. 36 percent of the group’s total of around 5,000 stores, net sales decreased by 23 percent in local currencies in the period December 1, 2020 to January 27, 2021 compared with the same period the previous year.

The company further said that online and physical stores are being increasingly integrated, with continued optimisation of the store portfolio. Around 100 new stores are planned to open in 2021, while 350 stores are planned to close in the same period - mainly in established markets.

Picture:H&M media gallery