From December 2020 – 31 August 2021, fashion giant H&M group’s net sales in local currencies increased by 13 percent compared with the corresponding period last year. Converted into SEK the group’s net sales amounted to SEK 142,154 million (134,482). The COVID-19 pandemic led to reduced footfall as a result of continued restrictions and store closures. At the most, around 1,800 stores were temporarily closed.
H&M’s profit after financial items increased to SEK 8,297 million (-1,613). The group’s profit after tax amounted to SEK 6,389 million (-1,242), corresponding to SEK 3.86 (-0.75) per share. Whereas, cash flow from operating activities increased to SEK 37,210 million (15,995).
Financial net cash increased to SEK 24,874 m (-5,853). Cash and cash equivalents plus undrawn credit facilities amounted to SEK 55,408 m (41,413).
Sales in third quarter (June to August 2021)
The H&M group’s net sales in local currencies increased by 14 percent in the third quarter 2021 compared with the corresponding period last year. Converted into SEK net sales increased to SEK 55,585 m (50,870). At the start of the quarter around 180 stores were temporarily closed and at the end around 100 stores remained closed.
The group’s online sales increased by 22 percent in local currencies and 17 percent in SEK. Store sales have started to recover as restrictions have been eased in many markets.
Similarly, gross profit increased by 19 percent to SEK 29,559 m (24,851). This corresponds to a gross margin of 53.2 percent (48.9). And profit after financial items increased by 158 percent to SEK 6,093 m (2,365).
The Board of Directors is proposing that a cash dividend of SEK 6.50 per share is paid in November 2021. This is based on significantly improved profitability, a strong financial position with financial net cash of SEK 24,874 m, more stable market conditions and a good outlook. There has been no resolution on a dividend since spring 2019. A dividend proposal in January 2020 was withdrawn in March 2020 due to the pandemic.
The new autumn collections have been well received. Sales in September 2021 were slightly higher than in the corresponding month the previous year in local currencies, even though demand was not able to be fully met because of disruption and delays in product flow. Currently around 50 stores are temporarily closed.
H&M online will launch in Chile in autumn 2021 and in Peru, Colombia and Uruguay in the first half of 2022.
Five new H&M markets will launch in 2022. Ecuador, North Macedonia and Kosovo, and via franchise in Costa Rica and Cambodia.
“The H&M group’s increase in profit for the quarter is mainly a result of well-received collections with more full-price sales, lower markdowns and good cost control. With our continued transformation and our well-positioned customer offering we are optimistic that we will see long-term, profitable and sustainable growth for the H&M group,” says Helena Helmersson, CEO, H&M.
“To further strengthen our competitiveness the group continues to work to constantly improve both the customer offering and the customer experience in response to customers’ increased expectations, such as being able to shop in a smooth and convenient way – when, where and how they choose,” Helmersson added.
“The pandemic and its consequences are not yet over and we are humbled by the many challenges in the world around us that affect our business, which call for a high level of flexibility and drive. We have quickly adapted by prioritising cash flow, cost control and flexibility. With our continued transformation and our well-positioned customer offering – to meet customers’ ever-increasing expectations of good value and sustainable fashion – we are optimistic that we will see long-term, profitable and sustainable growth for the H&M group,” Helmersson concluded.