H&M Group, the renowned Swedish fashion giant, reports a positive trend in its financial performance for the second quarter, yet faces challenges ahead.
- Net sales have increased by 3% year on year, equating to SEK 59.6 billion (£4.5 billion) between March and May.
- Operating profit shows a significant surge of 50%, reaching SEK 7.1 billion (£530 million), with an operating margin of 11.9%.
- A downturn is anticipated in June sales due to adverse weather conditions and strong previous year comparisons.
- CEO Daniel Ervér remains optimistic about long-term growth despite external economic pressures.
The renowned Swedish fashion giant, H&M Group, has reported a rise in net sales by 3% for the second quarter, bringing their total to SEK 59.6 billion (£4.5 billion) for the period between March and May. Despite this positive trend, the company anticipates a 6% decline in sales for June, attributing these expectations to unfavourable weather conditions in key markets and vigorous comparative figures from the previous year.
The group has demonstrated robust financial health, with gross profit jumping by 11% to reach SEK 33.6 billion (£2.6 billion), and operating profit increasing by an impressive 50% to SEK 7.1 billion (£530 million). The operating margin has improved to 11.9%, compared to 8.2% in the previous year, underscoring the organisation’s effective cost management strategies during this period.
Despite the anticipated dip in June sales, H&M remains positive, noting that sales showed recovery as weather conditions stabilised by the end of the month. The spring and summer collections have been well-received, boosting morale and providing a cushion against the short-term sales dip.
CEO Daniel Ervér, who took over leadership in January, expressed pride in the financial results, stating, “We achieved our best results for many years in the second quarter, showing once more the H&M group’s strength and robust financial position.” He affirmed the organisation’s commitment to strengthening the brand and enhancing the customer experience, with plans for accelerated investment in the latter half of the year.
Looking forward, H&M aims to maintain a 10% operating margin for the fiscal year of 2024, although the company acknowledges the difficulties posed by external factors, including currency fluctuations and material costs. Ervér remains optimistic, highlighting the company’s strong cash flow and the dedication of its workforce, which he believes will anchor continued profitable and sustainable growth.
H&M Group shows resilience with promising growth figures despite external challenges impacting short-term sales.
