Sweden-based fashion retailer H&M has announced the financial results for the first quarter of the financial year ended February 28, 2018. It reported a sharp 60 per cent decline in pre-tax profit as compared to the same period a year ago. Poor sales and higher markdowns collectively hit the retailer in the first quarter.
The clothing brand reported a net profit of SEK 1.37 billion in the reporting quarter as compared to SEK 2.46 billion in the corresponding quarter of last year.
During the quarter under review, H&M reported sales including VAT at SEK 53,554 million while sales excluding VAT amounted to SEK 46,181 million. Gross profit during the quarter amounted to SEK 23,040 million as against SEK 24,466 million.
The retailer is, however, hopeful that sales from online and new businesses will grow by more than 25 per cent during 2018.
This year, H&M will roll-out its e-stores in Saudi Arabia and United Arab Emirates via a franchise route. The beginning of e-stores in these countries will make H&M available online in 47 markets across the globe. The reporting quarter has already witnessed the launch of H&M’s online store in India.
It will also launch Afound, an off-price marketplace offering products from well-known and popular fashion and lifestyle brands, this year.
“2018 is a transition year for H&M. During this year, the company accelerated transformation so that we can take advantage of the opportunities generated by rapid digitalisation,” commented Karl-Johan Persson, CEO.
H&M is also planning to open 220 new stores, majority of them will be H&M stores and 90 will be its newer spin-offs including & Other Stories, Cos and Monki.
The world’s second-biggest clothing chain currently employs 171,000 people worldwide in its 4,700+ stores in 69 countries.
