Revenue was flat in local currency terms and profits sank 30 percent in the third fiscal quarter at Hennes & Mauritz Group, with macro pressures and a chilly start to the summer taking their toll.
The Stockholm-based group said Thursday that revenue was 60.89 billion Swedish kronor, or 5.38 billion euros at current exchange. Profit after tax was 2.31 billion Swedish kronor, or 203.7 million euros at current exchange.
Operating profit was down 26 percent to 3.51 billion Swedish kronor, or 309.7 million euros, with adjusted operating margin broadly in line with the corresponding period last year. The company said that sales and administrative expenses increased by 1 percent in the period.
“Despite a challenging start, we are concluding the third quarter with sales on par with last year in local currencies and with good cost control,” said the group CEO Daniel Ervér.
“We are strengthening the H&M brand by investing in products, the shopping experience and marketing, which we are already seeing start to make an impact and which will contribute to increased sales and profitability,” he said.
Hard times are expected to persist, with H&M saying that the operating margin for the full fiscal year is set to be lower than 10 percent. In the third fiscal quarter it was 5.9 percent, down from 7.8 percent in the corresponding period last year.
In the first nine months, it was 7.4 percent, up from 5.9 percent last year.
Ervér described 2024 as a year in which H&M is “laying the foundation for future growth, increasing the pace of improvements in the customer offering, and deprioritizing things that don’t strengthen our brands or contribute to our sales and profitability.”
He noted that consumers’ living costs have remained high during the year, “and at the same time we continue to see turbulence in the world around us. External factors have impacted our sales revenue and purchasing costs more than we expected.”
He said the company was strengthening its flagship H&M brand by investing in products, the shopping experience and marketing and was already seeing that benefits.
“We are confident that our plan will contribute to increased sales and profitability,” he added.
