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Hennes & Mauritz six-month report

Published 19 June 2014

Hennes & Mauritz (H & M) has announced its six-month report.

First half-year (1 December 2013 -- 31 May 2014)

  • The H&M Group's sales including VAT increased in local currencies by 14 percent during the first six months of the financial year. Converted into SEK, sales excluding VAT amounted to SEK 69,970 m (60,027), an increase of 17 percent.
  • Profit after financial items amounted to SEK 11,129 m (9,359), an increase of 19 percent. The group's profit after tax increased to SEK 8,458 m (7,113), corresponding to SEK 5.11 (4.30) per share.

Second quarter (1 March 2014 -- 31 May 2014)

  • Well-received spring collections resulted in strong sales and increased market share. The H&M Group's sales including VAT increased in local currencies by 16 percent during the second quarter. Converted into SEK, sales excluding VAT amounted to SEK 37,827 m (31,635), an increase of 20 percent.
  • Gross profit amounted to SEK 23,010 m (19,337), an increase of 19 percent. This corresponds to a gross margin of 60.8 percent (61.1).
  • Profit after financial items amounted to SEK 7,643 m (6,125), an increase of 25 percent. The group's profit after tax increased to SEK 5,809 m (4,655), corresponding to SEK 3.51 (2.81) per share, an increase of 25 percent.
  • H&M's first store in Australia has had a fantastic reception since opening at the beginning of April.
  • H&M's online sales in France, which were launched in March, have got off to a very good start.
  • Strong sales development for the other brands in the H&M Group: COS, & Other Stories, Monki, Weekday, Cheap Monday and H&M Home.

Sales in June have so far got off to a good start.
An extended shoe range will be launched in early autumn 2014.
Strong expansion in 2014, with approximately 375 new stores net in total.

- The Philippines and India will become new H&M countries in autumn 2014.

- Three large new online markets in autumn 2014: Spain, Italy and China.

H&M plans to open 8 - 10 new online markets in 2015.

Comments by Karl-Johan Persson, CEO

"We have had a good second quarter with a strong increase in both sales and profits and increased market share. Well-received collections and continued strong expansion led to a sales increase of 20 percent in SEK and 16 percent in local currencies. The strong sales development together with good cost control contributed to an increase in operating profits of 26 percent.

All our brands - H&M, COS, & Other Stories, Monki, Weekday, Cheap Monday and H&M Home - enjoyed good sales development during the second quarter. We are very pleased that H&M Sport, which we are broadening further, continued to gain market share within the sports segment.

We are continuing to broaden our current offering within H&M. Already this autumn, we will launch an extended and improved shoe range for women, men, teenagers and children. The new shoe concept will offer a variety of models in different price categories, all at H&M prices. The range will be launched in selected H&M stores in nine countries and in our online markets. This is a part of our long-term investments which also includes investments in online, IT and our new brands.

We are seeing some of our long-term investments starting to generate revenues such as & Other Stories and our online store in the US and in France. However, we will continue with our long-term investments in order to build an even stronger H&M and to continue with our multi-channel strategy. This autumn, for example, we will open our online store in Spain and Italy, and later on this year also in China, which will be very exciting. Next year we plan to open 8 to 10 new H&M online markets. We will come back later with more information on which markets these will be.

Our first H&M store in Australia has had a very good response since opening in April. It is a flagship store in Melbourne at the best location, in the landmark General Post Office building. It was fantastic to experience the atmosphere on the opening day along with thousands of enthusiastic customers. During the autumn the Philippines and India will become new H&M-countries, something we are very much looking forward to.

H&M is a leading company within sustainability; we feel a great responsibility for these matters and we are striving to bring about improvements for people and the environment in the countries where we operate. We are proud of what we have accomplished so far, even if there is still much to do. We believe that our work with sustainability is also becoming more and more visible to our customers and other stakeholders. To read more about this, please look into the "H&M Conscious Actions Sustainability Report 2013", which was published during the quarter at hm.com."



Source: Company Press Release