H&M Group has released its six-month report. The company’s gross profit for the period 1st December 2022-31st May 2023 increased to SEK 56,224 million (US $ 5,202.94 million). Operating profit amounted to SEK 5,466 million (US $ 505.82 million).
The result for the first half was negatively impacted by high raw materials and freight costs, a strong US dollar, increased energy costs and the effects of winding down the operations in Russia.
Helena Helmersson, CEO, said, “We increased sales in many markets despite reduced purchasing power and unfavourable weather conditions compared with last year. The summer collections have been well received and the third quarter has got off to a good start. The conditions for increased growth as well as profitability continue to develop in a favourable direction.”
High raw materials and freight costs combined with a strong US dollar had a very negative impact on most purchases made for the second quarter when compared with the previous year. The cost of markdowns in relation to sales was flat year on year compared with the corresponding quarter last year.
External factors affecting purchases of goods have gradually improved and pivoted from being negative to being positive compared with the same purchasing period the previous year. For the goods that will be sold in the third quarter, the effect of external factors is therefore expected to be neutral before becoming positive for the rest of the year.
Expansion is taking place with a focus on omnichannel sales. The optimisation of the store portfolio is continuing in parallel, meeting customers’ needs in interaction with the digital channels. For 2023 the plan is to open around 100 new stores. Most of the openings will be in growth markets, while the closures will mainly be in established markets. As of 31st May 2023 the H&M group had 4,399 stores as compared with 4,702 stores in the same period of the previous year.
A new logistics centre for online sales was put into operation in New Delhi, India in the beginning of the year.
