H&M Q1 sales up 9 percent, to expand footprint in new markets

H&M sales including VAT, for the first quarter from December 1, 2015 to February 29, 2016, increased by 9 percent in local currencies. Converted into SEK, sales including VAT increased by 8 percent to 50,624 million Swedish krona (6,214 million dollars). Sales excluding VAT amounted to 43,691 million Swedish krona (5,363 million dollars).

Commenting on the first quarter performance, Karl-Johan Persson, CEO of H&M said, “Our strong expansion continues, we are gaining market share and we are confident that we can grow at a fast pace both through stores and online, in existing as well as in new markets, for many years to come. Another important part of our long-term work on further strengthening the group’s future market position is our ability to offer customers a wider selection of brands with different identities. Our new brands - COS, & Other Stories, Monki, Weekday och Cheap Monday - represent an increasingly important part of the group and we are looking forward to launching more new brands further ahead.”

Financial highlights of the first quarter

Gross profit amounted to 22,699 million Swedish krona (2,787 million dollars). This corresponds to a gross margin of 52. Profit after financial items amounted to 3,327 million Swedish krona (408.4 million dollars). The group’s profit after tax amounted to 2,545 million Swedish krona (312.4 million dollars), corresponding to 1.54 Swedish krona (0.19 dollar) compared to 2.18 Swedish krona (0.27 dollar) per share. The company said that profits in the quarter were negatively affected by substantially higher purchasing costs due to the strengthened US dollar and by increased markdowns.

As of March 31, 2016, H&M offers e-commerce in an additional seven countries: Croatia, Estonia, Ireland, Latvia, Lithuania, Luxembourg and Slovenia. Very soon H&M will launch e-commerce in Japan and later in the year also in Greece, Canada and South Korea. A total of 11 H&M online markets will thus be added in 2016 which means that H&M will offer e-commerce in 34 markets by the end of the year.

March 2016 sales report

The H&M group’s sales including VAT in March 2016 increased by 2 percent in local currencies compared to the corresponding month the previous year.

The company plans a net addition of around 425 new stores for the 2015/2016 financial year. Most of the expansion will take place in existing markets. New Zealand, Cyprus and Puerto Rico are planned to become new H&M markets. The group’s store number 4,000 will open in April, in Mall of India in New Delhi.