H&M Group reports a modest 3% increase in net sales for Q2, with a total revenue of SEK 59.6bn (£4.5bn).
- Despite an 11% rise in gross profit, June sales are expected to decline by 6% due to challenging weather conditions.
- Operating profit showed remarkable growth, rising by 50% to SEK 7.1bn (£530m), with an improved operating margin of 11.9%.
- The company remains focused on achieving a 10% operating margin for the fiscal year, despite adverse external factors.
- CEO Daniel Ervér expresses optimism about strengthening the brand and sustaining long-term growth.
The H&M Group, a prominent player in the Swedish fashion industry, has reported a 3% increase in net sales year-on-year for the second quarter, bringing total revenue to SEK 59.6 billion (£4.5 billion). This increment represents a noteworthy achievement amid challenging market conditions.
Despite achieving an 11% increase in gross profit to SEK 33.6 billion (£2.6 billion) and a significant 50% growth in operating profit to SEK 7.1 billion (£530 million), the company expects a 6% decline in sales for June. This anticipated decrease is attributed to unfavourable weather conditions, which affected sales in several of the company’s major markets.
The operating margin for the second quarter improved to 11.9%, compared to 8.2% from the previous year, demonstrating the company’s efforts to enhance profitability. However, the aspiration to achieve a 10% operating margin for the 2024 financial year faces challenges due to external factors, such as material costs and currency fluctuations, which might have a negative impact in the latter part of the year.
Daniel Ervér, the recently appointed CEO, emphasised that the H&M Group’s second-quarter performance underscored its financial robustness. He stated, “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.”
Looking towards the future, Ervér indicated the company’s commitment to strengthening the brand and enhancing the customer experience. By focusing on customer satisfaction, employee dedication, and increased investment pace in the latter half of the year, H&M sees potential for continued profitable and sustainable growth.
H&M Group remains optimistic about its trajectory, focusing on sustained growth despite market uncertainties.