H&M reports healthy rise in profits at the end of nine months

REPORT_ Announcing its results for the nine months from December

1, 2013 to August 31, 2014, Hennes & Mauritz Group (H&M) sales including VAT increased in local currencies by 15 percent. Converted into SEK, sales excluding VAT amounted to 108,775 million Swedish Krona (15,126 million dollars), an increase of 18 percent. Profit after financial items increased 19 percent. The Group’s profit after tax increased to 13,754 million Swedish Krona (1,912.4 million dollars), corresponding to 8.31 Swedish Krona (1.16 dollars) per share.

Commenting on the positive developments Karl-Johan Persson, CEO of H&M said, “We have continued to gain market share thanks to strong sales development for all our brands. We see this as proof of well-received collections. Combined with our expansion, this led to a sales increase of 21 percent in SEK in the quarter. Also the good growth in profits continued with an increase in operating profit of 20 percent - while we at the same time are in a very intensive investment phase to build an even stronger H&M.”

For the third quarter from June 1, 2014to August 31, 2014, H&M Group’s sales including VAT increased in local currencies by 16 percent. Converted into SEK, sales excluding VAT amounted to 38,805 million Swedish Krona (5,396.4 million dollars), an increase of 21 percent. Gross profit increased 20 percent, corresponding to a gross margin of 58.3 percent. Profit after financial items represented a rise of 20 percent. The Group’s profit after tax also increased by 20 percent, corresponding to 3.20 Swedish Krona (0.44 dollars) per share.

H&M’s online sales in Italy and Spain, which were launched in August, have got off to a very good start. Continued strong sales development was witnessed for the other brands in the H&M Group including COS, & Other Stories, Monki, Weekday, Cheap Monday and H&M Home.

Sales in the month of September increased by 7 percent in local currencies compared to the same period last year. Sales in September have so far been affected by the unusually warm weather in most markets. H&M’s online store in China, which was launched already in September, has got off to a positive start.

Company has planned strong expansion in 2014, with approximately 375 new stores in total. The Philippines will become a new H&M market in October 2014. H&M’s opening in India, planned for autumn 2014, has been postponed until 2015. In 2015 H&M will also open in South Africa, Peru, Taiwan and Macau. H&M plans to open 8 – 10 new online markets in 2015.