H&M soars in first quarter
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H&M says global sales in its first quarter – to February 28 – soared 15 per cent year-on-year on a local currency basis.
CEO Karl-Johan Persson says the increase reflected well-received collections for all brands in the group, which boosted market share.
Sales excluding VAT totalled US$4.73 billion.
Gross profit increased by 26 per cent to $2.6 billion, which corresponds to a gross margin of 55.2 per cent, compared with 54.9 per cent the previous year.
In the first quarter, H&M opened its first store in Taipei, Taiwan, and in the next three months will make its debut in Macau where it has two stores planned, along with entering Peru for the first time. In the second half of the year it will add Africa and India to its global footprint.
The company said in a statement that sales in the first three weeks of the second quarter rose nine per cent in local currencies.
“The year has got off to a very good start and we have great faith in our offering. Although the strong US dollar will affect our sourcing costs going forward, we will make sure that we always have the best customer offering in each individual market,” said Persson.
Questions & Answers
Q.What were H&M's total sales excluding VAT in the first quarter?
What were H&M's total sales excluding VAT in the first quarter?
Sales for the first quarter, excluding VAT, amounted to US$4.73 billion. This figure reflects the strong performance reported by the company, with global sales soaring by 15 per cent year-on-year in local currency.
Q.How did the gross profit margin compare to the previous year?
How did the gross profit margin compare to the previous year?
The gross profit margin for the first quarter increased to 55.2 per cent. This was an improvement from the 54.9 per cent reported in the same period the previous year, showing enhanced profitability.
Q.Which new markets will H&M be entering later this year?
Which new markets will H&M be entering later this year?
In the second half of the year, H&M plans to expand its global footprint by entering both Africa and India. These new markets will be added to its operations, following earlier debuts in other regions.
Q.What is the company's outlook on sourcing costs for the coming period?
What is the company's outlook on sourcing costs for the coming period?
The company expects that the strong US dollar will affect its sourcing costs going forward. However, CEO Karl-Johan Persson stated that they will ensure the best customer offering in each market despite this challenge.
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