Companies

H&M posts solid second quarter

Jun 28, 2024 Sweden

The Sweden-based fashion group has reported a solid performance in the second quarter of 2024. However it has also warned of a drop in sales in June, mainly due to “unstable weather” in some of its key markets

“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, with strong cash flow as well as improved profitability and sales. We are now raising our ambitions further to strengthen the brand, the customer offering and the shopping experience. With a focus on our customers, committed colleagues and a faster pace of investment in the second half of the year we see good conditions for continued profitable, long-term and sustainable growth”, commented Daniel Ervér, CEO of the company.

Second Quarter Results

In the second quarter of fiscal 2024, which ended on the 31^st of May, H&M’s net sales increased by 3% to 59.61 billion Swedish kronor (5.24 billion euros), as compared to the same last year’s period.

The company's gross profit in these three months totalled 33.57 billion Swedish kronor (2.95 billion euros), up by 11% on a comparable basis to the same period in 2023; accordingly, the gross margin rose from 52.7% in the second quarter of the previous year to 56.3%.

Overall, “improved sales, a strengthened gross margin, good operational cost control and the cost and efficiency programme” led to a 49% year-on-year increase in operating profit to 7.1 billion Swedish kronor (624.7 million euros) in the second quarter and a corresponding increase in operating margin to 11.9% from 8.2% in a similar period last year.

In the three months to the end of March, H&M’s net profit rose by an impressive 52% to 4.99 billion Swedish kronor (439.0 million euros), as compared to 3.29 billion Swedish kronor (289.5 million euros) in the second quarter of 2023.

First Half Results

In the first half of the current fiscal year, the group’s net sales increased by 1% year-on-year to 113.3 billion Swedish kronor (9.98 billion euros); in local currencies, net sales were in line with the previous year.

In these six months, H&M’s net profit also grew to 6.2 billion Swedish kronor (545.5 million euros) from 3.82 billion Swedish kronor (336.1 million euros) in the first half of fiscal 2023.

June Outlook

Despite a good performance so far this year, the fashion group has warned that it expects June sales to be down by 6% in local currencies as compared to the same period last year. In addition to strong comparative figures from 2023, H&M stressed the impact of “unstable weather” in many of its main markets at the start of the month. However, “sales recovered as the weather normalised at the end of the month” and “a well-composed inventory has also enabled a later start to sales”.

On another note, H&M added that it is “monitoring developments in the Red Sea and the global freight market” to minimise the impact on product availability, freight costs and stock level.

1 SEK = 0.088 EUR

Image Credits: esgnews.com

Sweden Companies Fashion H&M Quarter Results Results