Swedish fashion giant H&M Group has reported strong profit growth in the first half of the year as the ending of lockdowns saw global shoppers flock back to stores.
The group, whose portfolio of brands includes Cos, Weekday, Monki, and Arket, made a profit after tax of 3.9 billion Swedish krona (around 365 million euros) in the first six months of the year, up from SEK 1.7 billion a year earlier.
In the second quarter, profit after tax came in at SEK 3.68 billion compared to SEK 2.77 billion a year earlier.
The jump in profit came as the group’s net sales in the first half increased by 20 percent (or 15 percent in local currencies) to SEK 103.67 billion.
Net sales in Q2 came in at SEK 54.5 billion, representing a growth of 17 percent, or 12 percent in local currencies. Excluding Russia, Belarus and Ukraine, sales increased by 17 percent in local currencies.
H&M cuts back on discounts
Group CEO Helena Helmersson said the strong sales were a result of well-received collections with increased full-price sales and lower markdowns.
She said the results “once again shows the value of having both physical and digital channels which strengthen and complement each other. The integration of the sales channels is therefore ongoing, in parallel with continual initiatives - in particular within tech, the supply chain and sustainability”.
Despite the strong results, Helmersson warned of many challenges ahead associated with inflation and supply chain disruption.
Sales in the month of June are expected to decrease 6 percent year-over-year in local currencies, with paused sales in Russia, Belarus and Ukraine representing 5 percentage points of the decrease.
But the group added that “the June figure should be seen in the light of a very strong comparison base in June 2021, an increase by 24 percent, while July and August increased by 6 percent”.