H&M reports profit and turnover increase in 2019
30 Jan 2020
Net sales at H&M Hennes & Mauritz AB increased by 9 percent to 61,694 million Swedish krona (6,399 million dollars) in the fourth quarter, while in local currencies net sales increased by 5 percent. The company said in a statement that net sales in the financial year 2018/2019 increased by 11 percent and amounted to 232,755 million Swedish krona (24,138 million dollars), while in local currencies the increase was 6 percent. Gross profit increased to 33,287 million Swedish krona (3,452 million dollars) in the fourth quarter, corresponding to a gross margin of 54 percent, while for the financial year, gross profit increased to 122,453 million Swedish krona (12,699 million dollars), corresponding to a gross margin of 52.6 percent. Profit after financial items increased by 24 percent to 5,403 million Swedish krona (560.3 million dollars) in the fourth quarter, while for the full-year, increase was 11 percent to 17,391 million Swedish krona (1,803.6 million dollars).
Commenting on the full year results, Karl-Johan Persson, the group’s CEO said, “The H&M group’s transformation work continues to bear fruit. Increased full-price sales and decreased markdowns contributed to an improvement in profit for the full year and in the fourth quarter, when we achieved a 25 percent increase in operating profit. In India sales increased by 33 percent in local currency, in Poland by 21 percent, in Mexico by 18 percent and in Russia by 12 percent. In Sweden sales increased by 7 percent, while sales in the US and UK increased by 6 and 3 percent respectively. For 2020 we plan to open around 200 new stores, while around 175 stores will be closed.”
H&M expands online and offline reach during 2019
Online sales increased by 24 percent in SEK in the financial year and by 18 percent in local currencies. New Business increased sales in the financial year by 17 percent in SEK and by 16 percent in local currencies compared with the previous year. Net sales in the period from December 1, 2019 to January 28, 2020 increased by 5 percent in local currencies compared to the corresponding period the previous year.
In 2019 H&M and H&M Home opened online in Mexico, and H&M via franchise in Indonesia, Thailand and Egypt making H&M’s online store available in 51 markets and in addition, H&M was also launched on India through ecommerce platform Myntra. Cos, Monki, Weekday, & Other Stories and Arket opened online in Norway, & Other Stories also opened on Tmall in China and Afound opened online in the Netherlands. New store markets in 2019 for H&M were Bosnia-Herzegovina, Belarus and – via a franchise partner – Tunisia. In 2019 Iceland became a new store market for Cos, Weekday and Monki. Weekday, & Other Stories and Arket opened their first stores in Luxembourg. Cos also opened in Lithuania and Slovakia, while Monki also opened in Poland as well as via franchise in the United Arab Emirates. Weekday also opened in Poland and Switzerland and & Other Stories in Latvia.
The company said that net addition of new stores for full-year 2019 was 108, rather than 175 as communicated at the beginning of the year. For the 2020 financial year around 200 new stores are planned to open including franchise stores and there will be around 175 closures, making a net addition of around 25 stores. The majority of the openings will be in South America, Asia (excluding China) and in Russia and Eastern Europe, while the consolidations will take place mainly in Europe, the US and China. Australia is scheduled to become a new H&M online market in the second half of 2020. H&M will also be launched on the ecommerce platform SSG.COM in South Korea during 2020. An agreement has been signed with a new franchise partner in Central America. The first H&M store is planned to open in Panama at the end of 2020. The H&M group’s growth target is to increase sales in local currencies by 10–15 percent per year with continued high profitability remains a long-term target.
In the financial year 2018/2019, the H&M group opened 281 stores including franchise and closed173 stores, making a net increase of 108 stores. The group had a total of 5,076 stores as of November 30, 2019, of which 272 were operated by franchise partners.
The company’s board of directors has decided to propose an unchanged dividend of 9.75 Swedish krona (1.01 dollars) per share to the annual general meeting on May 7, 2020, corresponding to 120 percent of the group’s profit after tax. The first payment of 4.90 Swedish krona will be made in May and the second payment of 4.85 Swedish krona will be made in November 2020.
Picture:H&M media gallery