H&M Group had good news on Friday when it reported fourth-quarter and full-year results for the 12 months to the end of November. It said it was back to pre-pandemic levels and fully focused on growth. with ambitious plans to double sales by the end of the decade.
Quarterly net sales in local currency grew 11% and up 8% in SEK terms at SEK 56.8 billion (€5.4 billion / £4.5 billion / $6 billion). Gross profit increased 14% to SEK 31.3 billion with gross margin increased from 52.1% to 55.2%.
Profit after financials increased 64% to SEK 6 billion with strong numbers “primarily as a result of well-received collections with fuller selling prices, reduced selling prices and good cost control “.
The company said operating profit margin was 11% (up from 7.4%) and net profit increased to SEK 4.6 billion from SEK 2.4 billion.
Meanwhile, for the whole year, net sales in local currency increased by 12%. But converted to SEK, the group’s net revenue grew just 6% to SEK 198.967 billion ($18.9 billion / £15.7 billion / $21.1 billion).
Gross profit increased to SEK 105 billion from SEK 93.5 billion and gross margin increased from 50% to 52.8%. Profit after financial items rose to SEK 14.3 billion from just SEK 2 billion a year earlier and its net profit was SEK 11 billion, up from SEK 1.2 billion the year before.
And between December 1 and the end of this month, local currency sales are expected to grow 20% year-on-year as it is negatively impacted by the new wave of the pandemic. and its consequences in many of the group’s larger markets.
The company added that by 2030 it aims to double sales while at the same time halving its carbon footprint. And profitability is set to exceed 10% over time.
To achieve ambitious climate and growth targets, investments are being ramped up. For 2022, the investment capital is expected to amount to about SEK 10 billion.
This year, it will also launch in six new markets. The first stores will open in Ecuador, Kosovo and North Macedonia, and through franchising in Costa Rica, Guatemala and Cambodia.
Online H&M rollout continues into 2022 with Belarus, Colombia, Kazakhstan, Peru and Ukraine.
Chief Executive Officer Helena Helmersson said: “The H&M team’s strong recovery continues. Customers are showing that they appreciate that we offer them the best combination of fashion, quality, price and sustainability. By quickly taking decisive action, we have succeeded in managing the negative impacts of the pandemic.
“We ended the year on a strong note, with sales back to pre-pandemic levels and with better profitability than a few years ago. Now we’re back to normal. With a solid financial position and good profitability, we can fully focus on growth again.”
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