While the final quarter (Q4) ending November recorded a weak sales rate plunging below analyst predictions, the new year brought with a improved performance in December and January.
Q4 sales reached US $ 5.65 billion, a 3 per cent increase in local currencies but below expectations. However, sales rose 4 per cent in the first two months of the new fiscal year.
Gross profit for Q4 increased to US $ 3.47 billion from US $ 3.44 billion, with gross margin rising to 54.6 per cent from 53.7 per cent. Operating profit increased to US $ 471 million from US $ 442 million, with an operating margin of 7.4 per cent, up from 6.9 per cent. Operating profit was impacted by approximately US $ 20.3 million in wind-down costs for Monki stores and other one-off items. Profit after tax nearly doubled to US $ 313 million from US $ 159 million.
For the full year ending November, net sales fell slightly to US $ 23.8 billion from US $ 24 billion. In local currencies, net sales increased by 1 per cent. Gross profit increased by 4 per cent to US $ 12.7 billion, with gross margin rising to 53.4 per cent from 51.2 per cent. Operating profit increased to US $ 1.76 billion, a 28 per cent increase excluding results from associated companies and joint ventures. Net profit rose 33 per cent to US $ 1.18 billion.
CEO Daniel Ervér expressed confidence in the company’s direction, stating that they are focused on improving the core business and removing inefficiencies. He acknowledged that there is more work to be done but that the company has a strong plan for long-term growth.
He also noted the growth in gross margin and operating profit, despite wind-down costs and increased investments. Strong online sales, improved product presentation, well-received womenswear collections, and effective cost control contributed to the positive quarterly development.
He emphasised significant improvements made in 2024, particularly to the H&M product offering, with an initial focus on womenswear. The company also accelerated improvements to its supply chain, increasing flexibility and product availability.
