Hennes & Mauritz AB (H&M) releases the Interim Report for the nine month of fiscal year (1st Dec 2011 – 31st Aug 2012).
Nine Month
- The H&M Group’s sales including VAT increased by 11 percent in local currencies and in SEK and amounted to SEK 103,018 m (92,619) in the first nine months of the financial year. Sales in comparable units increased by 2 percent. Sales excluding VAT increased by 12 percent to SEK 88,297 m (79,047).
- Profit after financial items increased by 11 percent and amounted to SEK 15,649 m (14,140). Group profit after tax was SEK 11,580 m (10,464), corresponding to SEK 7.00 (6.32) per share.
The Third Quarter
- The H&M Group’s sales including VAT increased by 10 percent in local currencies in the third quarter. Sales in comparable units were unchanged. Converted into SEK, sales excluding VAT amounted to SEK 28,806 m (26,912), an increase of 7 percent.
- Gross profit amounted to SEK 16,771 m (15,766), corresponding to a gross margin of 58.2 percent (58.6).
- Profit after financial items increased to SEK 4,895 m (4,850). Group profit after tax was SEK 3,622 m (3,589), corresponding to SEK 2.19 (2.17) per share.
- Sales and profits in the third quarter have been affected by large negative currency translation effects. This has led to a negative impact of approximately SEK 200 m on profits after financial items compared to the third quarter 2011.
- H&M is ramping up the pace of expansion. The expansion plan for the financial year 2012 has been increased to around 300 new stores net from 275 previously planned.
- H&M’s first stores in Latvia and Malaysia were very well received at the openings in September.
- Sales in the period 1 – 25 September 2012 increased by 14 percent in local currencies compared to the same period last year (calendar adjusted).
- Chile will become H&M’s first market south of the equator when the first H&M store opens in Santiago de Chile during the first half of 2013.
- Lithuania will become a new H&M market in autumn 2013 when the first H&M stores open in Vilnius.
Comments by Karl-Johan Persson, CEO
“H&M continued to gain market share and increased sales by 10 percent in local currencies in the quarter which proves that we have an attractive offering that is appreciated by customers worldwide.
“Conditions in the fashion retail industry continued to be challenging in many markets – both as regards the weather and the macro-economic climate. The profit increase in the third quarter was damped by large negative currency translation effects. But viewed over the nine-month period, profit after financial items increased by 11 percent to more than SEK 15.6 billion.
"We are continuing our long-term work by constantly making our customer offering even stronger and at the same time building for the future with many new initiatives such as & Other Stories, a new fashion brand that will be launched in separate stores and online during spring 2013.
“The new brand is aimed at women with an interest in fashion who want to create their own personal style, and focuses on the total look. & Other Stories will offer a broad range of shoes, bags, jewellery, beauty products, lingerie and clothes – everything in carefully selected qualities with great attention to details.
"We see significant opportunities for continued growth both in stores and online. We are ramping up the rate of expansion for full-year 2012 to 300 new stores net from the previously planned 275. We are looking forward to taking our first step into the southern hemisphere next year by opening our first store in South America, which will be a flagship store in Santiago de Chile.
“The online market is increasingly growing, with particularly strong growth in mobile shopping via smartphones and tablets. To accommodate this rapid development, from as early as the beginning of next year we will also offer a completely mobile adapted H&M shop online in H&M’s existing eight online markets.
“Meantime, we have intensified preparations for the rollout of H&M shop online to other markets in the Group. These investments – and as we need more time for the launch of our online shop for the US – mean that the launch of H&M shop online in the US has been moved to summer 2013.”
