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The global fashion business journal

24 Jun 201914:12

H&M sales up 5.2% but profit shrinks for the third year in a row

The net profit of the group stood at 12.65 billion Swedish krona (1.21 billion euros), 21.8% less than in the previous fiscal year.

31 Jan 2019 — 09:00
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H&M grows by 5.2% but becomes less profitable for the third consecutive year

 

 

 

H&M continues growing but, at the same time, reduces its profitability for the fourth year in a row. The Swedish fashion retail giant closed the last fiscal year (on November 30), with a revenue of 210.4 billion Swedish kroner (20.27 billion euros), 5.2% more than last year. However, the margin, the gross and net profit continue to shrink.

 

The fiscal year 2018 is the fourth year in a row in which H&M has been losing profitability despite continuing to increase its sales. Specifically, the company reduced its profit after taxes by 21.8%, to 12.65 billion Swedish krona (1.21 billion euros), while the operating profit stood at 15.49 billion crowns (1.49 billion euros), 24.7% less.

 

It is the third year a row in which, although sales have increased, earnings of H&M went down. The company’s gross margin also fell, from 54% in 2017 to 52.7% in 2018.

The Swedish company, which closed the year with a network of 4,968 points of sale and 123,283 workers around the world, had a liability of 32.23 billion SEK (3.10 billion euros) on November 30, compared to 21.43 billion SEK from the same period in the previous year.

 

Sales from the online channel boosted H&M’s growth in 2018, which reached 30 billion Swedish krona, 22% more. Online sales already represent 14.5% of H&Ms revenue, compared to 12.5% in 2017.

 

The H&M group, who also owns Cos, Weekday,  Monky, &Other Stories, Arket and Afound, said that “it has been a challenging year for the H&M group and for the sector, but after that difficult first half, there are signs that the efforts for the transformation of the company are beginning to take effect,” said Karl-Johan Persson, CEO of the group.

 

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