Josh White Sharecast News
30 Jan, 2025 11:05 30 Jan, 2025 11:02

H&M reports stronger-than-expected fourth quarter

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Sharecast graphic / Josh White

H&M reported stronger-than-expected fourth-quarter earnings on Thursday, signaling progress in its ongoing turnaround strategy.

The Swedish fast fashion giant posted an operating profit of SEK 4.6bn (£335.68m) for the three months through November, surpassing analysts' forecasts of SEK 4.3bn.

Its operating margin rose to 7.4%, reflecting improved cost efficiency and better inventory management.

For the full year, H&M recorded net sales of SEK 234.48bn - a 1% increase.

Operating profit climbed 28% to SEK 17.3bn, while net profit after tax rose 33% to SEK 11.5bn.

The company attributed the gains to stronger online sales, well-received women's fashion collections, and effective cost control.

Gross profit for the year increased 4% to SEK 125bn, with a gross margin of 53.4%.

Fourth-quarter net sales grew 3% in local currencies to SEK 62.1bn.

The retailer noted that early autumn sales were strong, though a later Black Friday pushed some revenue recognition into December.

In the first two months of its new financial year, from December to January, its sales rose 4% in local currencies.

Chief executive officer Daniel Ervér, who took the helm a year ago, said the company was focussed on strengthening its core business.

“After one year as CEO, I’m confident that we are on the right track,” he said.

“We have set a clear direction focusing fully on our core business - improving what makes the biggest difference for the customer and removing what doesn’t.”

H&M opened 88 new stores in 2024 and said it was continuing to optimise its 4,200-store portfolio.

Efforts to enhance product offerings, accelerate supply chain processes, and integrate online and in-store channels were key priorities, the board said.

It added that it aimed to maintain its investment levels while reinforcing its digital presence and brand positioning in key fashion markets.

At 1202 CET (1102 GMT), shares in Hennes & Mauritz were down 4.64% in Stockholm at SEK 146.75.

Reporting by Josh White for Sharecast.com.

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