H&M (Hennes & Mauritz) said that in the first quarter ended Feb. 28 net sales rose a reported 3 percent to SEK 55.333 billion (€5.10bn).
For Swedish fashion retailer H&M the top line inceased by 2 perent in local currencies with 3 percent fewer stores compared with the same period last year.
In March, H&M group’s sales are expected to increase by 1 percent in local currencies compared with the same month the previous year, the company said said.
Gross profit fell to SEK 27.169 billion (€2.51bn) from SEK 27.655 billion, resulting in a margin of 49.1 percent against 51.5 percent. The margin drop reflected negative external factors, increased markdowns and investments in the customer offering. The Swedish krona strengthened in the quarter, resulting in an adverse impact from currency remeasurement effects.
“We estimate that the overall negative effect of these factors will already be significantly smaller in the second quarter than in the first quarter,” the company said.
H&M said it was deepening its collaboration with strategic suppliers, with possible additional positive effects.
“At present, the conditions are in place for these efforts to have a positive overall effect in the second half of the year compared with the previous year, with the customer offering being strengthened at the same time,” it added.
In the first quarter, the operating profit fell to SEK 1.203 billion (€1.11bn) from SEK 2.077 billion, corresponding to an operating margin of 2.2 percent against 3.9 percent. Net profit slumped to SEK 579 million (€53.4m) from SEK 1.231 billion.
The stock-in-trade amounted to SEK 41.008 billion (€3.78bn), an increase of 9 percent on a reported basis and 11 percent on a currency-adjusted basis.
The brokerage RBC Capital Markets noted that H&M’s first-quarter results were softer than expected due to a lower-than-anticipated gross margin. There may be some concerns regarding H&M’s inventory position, it added.
